Appraisal of 228 Main St, Kalispell, MT-Revised 120120APPRAISAL REPORT OF:
228 SOUTH MAIN STREET
KALISPELL, MONTANA
PREPARED FOR:
Ms. Katharine King, MPA, CEcD,
Assistant Director of Community Economic Development
City of Kalispell
201 1st Avenue East
Kalispell, Montana 59901
MARKET VALUE AS OF:
November 4, 2020
PREPARED BY:
Elliott M. Clark, MAI &
Christopher D. Cark
Clark Real Estate Appraisal
704-C East 13th Street, #509
Whitefish, Montana 59937
(406) 862-8151
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 2
704-C East 13th Street, #509
Whitefish, Montana 59937
LETTER OF TRANSMITTAL
November 30, 2020
Ms. Katharine King, MPA, CEcD
Assistant Director of Community Economic Development
City of Kalispell
201 1st Avenue East
Kalispell, Montana 59901
Re: Appraisal Report of Real Property at 228 South Main Street, Kalispell, Montana
Dear Ms. King:
In compliance with your request Elliott M. Clark, MAI and Christopher D. Clark with Clark Real
Estate Appraisal viewed the above referenced property on November 4, 2020. Information regarding
zoning was researched and trends in real estate activity in the immediate and greater subject market
areas were analyzed. The property viewing, research, and analyses were conducted in order to prepare
the attached narrative appraisal report. The value for the fee simple interest in the subject real
property as of the property viewing date, in “as is” condition, is concluded in this report.
,
As of the publish date of this appraisal report, the U.S. economy was exhibiting a high level of
volatility caused by the worldwide COVID-19 pandemic. The long-term impacts on the US
economy are not known. The majority of the market data included in this report, including
some of comparable data utilized predates this market volatility. The value concluded in this
report is based upon data available as of the report publish date of November 30, 2020, and
future impacts to the value conclusion herein in relation to the COVID-19 pandemic are
unknown.
There are three approaches to value in the appraisal of real property. They are the Cost, Sales
Comparison, and Income Approaches. All three approaches and their applicability will be discussed
in greater detail in the Scope of the Appraisal section of this report.
The value concluded in this report for the subject property was made after thorough study of available
market data and other data felt to be pertinent to this appraisal. The attached appraisal report exhibits
the factual data found and reasoning used in forming our opinion of value. The value conclusion is
based on the assumptions that all necessary governmental approvals have been obtained and will be
maintained and that the property owners will exhibit sound management and sales practices.
Telephone (406) 862-8151 www.clarkappraisal.us FAX (406) 612-2000
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 3
We were not provided with soil studies for the subject site. We assume that the soils are capable
of supporting construction like that in the neighborhood without unusual soil preparation. We are
also unaware of the presence of any hazardous material, groundwater contamination, or toxic
materials that may be on or in the subject or in the proposed subject improvements. Should any of
these conditions be present, the value concluded in this report could be affected.
We certify that, to the best of our knowledge and belief, the statements and opinions contained in
this appraisal report are full, true, and correct. We certify that we have no interest in the subject
property and that neither the employment to make this appraisal nor the compensation is contingent
upon the value for the property concluded in this report. We specifically certify that we are
competent (geographically and with regard to the property type) to complete this appraisal report.
This appraisal assignment was not made nor was the appraisal rendered on the basis of a requested
minimum valuation or specific valuation.
This appraisal is subject to the attached Certification of Appraisal and Statement of Limiting
Conditions. We further certify that this appraisal was made in conformity with the requirements
of the Code of Professional Ethics of the Appraisal Institute and the Uniform Standards of
Professional Appraisal Practice of the Appraisal Foundation (USPAP).
Respectfully submitted,
Elliott M. Clark, MAI
Montana Certified General Real Estate Appraiser
REA-RAG-LIC-683
Christopher D. Clark
Montana Licensed Real Estate Appraiser
REA-RAL-LIC-841
Telephone (406) 862-8151 www.clarkappraisal.us FAX (406) 612-2000
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 4
TABLE OF CONTENTS
LETTER OF TRANSMITTAL ................................................................................................................. 2
SUMMARY OF SALIENT DATA AND CONCLUSIONS .................................................................... 5
CERTIFICATION OF APPRAISAL ........................................................................................................ 6
GENERAL ASSUMPTIONS AND LIMITING CONDITIONS ............................................................ 8
SCOPE OF WORK FOR THE APPRAISAL ........................................................................................ 10
IDENTIFICATION OF THE SUBJECT PROPERTY......................................................................... 12
DATE OF PROPERTY VIEWING ........................................................................................................ 12
PROPERTY RIGHTS APPRAISED ...................................................................................................... 12
PURPOSE OF THE APPRAISAL .......................................................................................................... 12
INTENDED USE & INTENDED USER OF THE APPRAISAL ......................................................... 13
DEFINITION OF MARKET VALUE .................................................................................................... 13
HISTORY OF SUBJECT PROPERTY & STATEMENT OF OWNERSHIP ................................... 14
PROPERTY DESCRIPTION .................................................................................................................. 15
A. SITE DESCRIPTION ......................................................................................................................................... 15
B. STREET ACCESS, VISIBILITY, & PARKING ................................................................................................ 18
C. DESCRIPTION IMPROVEMENTS ................................................................................................................... 19
D. EASEMENTS, BUFFERS, & RESTRICTIONS ................................................................................................ 20
E. TOPOGRAPHY, VEGETATION, FLOOD ZONE, SOIL CONDITIONS, & ENVIRONMENTAL
CONSIDERATIONS ............................................................................................................................................... 21
F. UTILITIES .......................................................................................................................................................... 22
G. PUBLIC SAFETY & SERVICES ....................................................................................................................... 22
H. ZONING REGULATIONS ................................................................................................................................. 22
I. ASSESSMENTS/PROPERTY TAXES ............................................................................................................... 26
J. PROPERTY SUITABILITY ................................................................................................................................ 26
SUBJECT PHOTOGRAPHS................................................................................................................... 27
SUBJECT MARKET ANALYSIS .......................................................................................................... 30
COVID-19/RECENT MARKET VOLATILITY ANALYSIS ................................................................................ 33
HIGHEST AND BEST USE .................................................................................................................... 38
THE APPRAISAL PROCESS ................................................................................................................. 40
SALES COMPARISON APPROACH .................................................................................................... 41
RECONCILIATION OF VALUE INDICATIONS ............................................................................... 51
QUALIFICATIONS OF THE APPRAISERS ....................................................................................... 52
APPRAISERS LICENSES ....................................................................................................................... 56
ADDENDUM ............................................................................................................................................. 57
NATIONAL ECONOMIC DATA ........................................................................................................................... 58
STATE ECONOMIC DATA ................................................................................................................................... 58
FLATHEAD COUNTY DATA ............................................................................................................................... 61
CITY OF KALISPELL DATA ................................................................................................................................ 66
PROFESSIONAL SERVICES AGREEMENT & SCOPE OF WORK ................................................................... 71
MOST RECENTLY RECORDED DEED ............................................................................................................... 76
HISTORICAL CHANGES IN CPI-U ...................................................................................................................... 78
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SUMMARY OF SALIENT DATA AND CONCLUSIONS
IDENTIFICATION OF CLIENT/INTENDED USE
Client/Intended User
City of Kalispell/Client
Purpose/Intended Use
Property Owner
Conclude Market Value/To Assist the Client with Decisions
Regarding Potential Disposition of the Subject Property
City of Kalispell
Potential Purchaser Not Applicable
SUBJECT PROPERTY
Property Address
228 South Main Street, Kalispell, Montana
Site Size 17,500 Square Feet or 0.402 Acres
Description of Improvements See Property Description
Assessor Number(s) 000E000406
Census Tract 30-029-0010.00
Flood Zone Area of Minimal Flood Risk, FEMA Map Panel 30029C1805J dated
November 4, 2015
Zoning B-4, Central Business
HIGHEST AND BEST USE(S)
Property As If Vacant
Construction of a Multi-Story, Mixed Use, Commercial Building
Property As Is Demolition of Existing Improvements and Construction of a Multi-
Story, Mixed Use, Commercial Building
DATES, VALUE CONCLUSION(S) AND ASSIGNMENT CONDITION(S)
Report Date
November 30, 2020
Inspection Date November 4, 2020
Effective Date of Value(s) November 4, 2020
Property Rights Appraised Fee Simple
Market Value
$270,000
Extraordinary Assumption(s) None
Hypothetical Condition(s) None
EXPOSURE TIMES
The appraised value concluded in this report is based upon 3 to 6 month exposure time. Support for the concluded
exposure time is addressed in the Subject Market Analysis portion of this report.
APPRAISER INFORMATION
Appraiser(s) Elliott M. Clark, MAI & Christopher D. Clark
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CERTIFICATION OF APPRAISAL
We certify that, to the best of our knowledge and belief,
The statements of fact 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 our unbiased professional analyses, opinions,
and conclusions.
Elliott M. Clark, MAI and Christopher D. Clark have no present or prospective interest in
the property that is the subject of this report and no personal interest with respect to the
parties involved.
We have performed no services, as appraisers or in any other capacity, regarding the
property that is the subject of this report within the three-year period immediately
preceding acceptance of this assignment.
We have no bias with respect to the property that is the subject of this report or to the
parties involved with this assignment.
Our engagement in this assignment was not contingent upon developing or reporting
predetermined results.
The compensation for completing this assignment is not contingent upon the development
or reporting of a predetermined value or direction in value that favors the cause of the
client, the amount of the value opinion, the attainment of stipulated results, or the
occurrence of a subsequent event directly related to the intended use of this appraisal.
Our analyses, opinions, and conclusions were developed, and this report has been prepared,
in conformity with the requirements of the Uniform Standards of Professional Appraisal
Practice.
Elliott M. Clark, MAI and Christopher D. Clark, of Clark Real Estate Appraisal, both
personally viewed the subject property. See Scope of Work for the Appraisal for details.
No one provided significant real property appraisal assistance to the persons signing this
certification.
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The reported analyses, opinions and conclusions were developed, and this report has been
prepared, in conformity with the Code of Professional Ethics and Standards of Professional
Appraisal Practice of the Appraisal Institute.
The use of this report is subject to the requirements of the Appraisal Institute relating to
review by its duly authorized representatives.
As of the date of this report Elliott M. Clark, MAI has completed the continuing education
requirements of the Appraisal Institute.
___________________________________
Dated Signed: November 30, 2020 Date Signed: November 30, 2020
Elliott M. Clark, MAI Christopher D. Clark
MT REA-RAG-LIC-683 MT REA-RAL-LIC-841
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GENERAL ASSUMPTIONS AND LIMITING CONDITIONS
The appraisal is subject to the following conditions and to such other specific and limiting
conditions as are set forth in the appraisal report.
1. The legal description(s) from the most recently recorded deed(s) or plat(s) are assumed to be
correct.
2. The appraisers assume no responsibility for matters legal in character, nor do they render any
opinion as to the title, which is assumed to be marketable. All existing liens, encumbrances
and assessments have been disregarded and the property is appraised, as though free and clear,
under responsible ownership and competent management.
3. Any sketches in this report indicate approximate dimensions and are included to assist the
reader in visualizing the property.
4. The appraisers have not made a survey, engineering studies or soil analysis of the property
and assume no responsibility in connection with such matters or for engineering, which might
be required to discover such factors.
5. Unless otherwise noted herein, it is assumed that there are no encroachments, zoning, or use
restriction violations associated with the subject property.
6. Information, estimates and opinions contained in this report are obtained from sources
considered reliable and believed to be true and correct; however, no liability for them can be
assumed by the appraisers.
7. The appraisers are not required to give testimony or attendance in court by reason of this
appraisal, with reference to the property in question, unless arrangements have been made
previously.
8. The division of the land and improvements (if applicable) as valued herein is applicable only
under the program of utilization shown. These separate valuations are invalidated by any other
application.
9. On all appraisals, subject to satisfactory completion, repairs or alterations, the appraisal report
and value conclusion(s) are contingent upon completion of the improvements in a
workmanlike manner.
10. Disclosure of the contents of this appraisal report is governed by the By-Laws and Regulations
of the Appraisal Institute. Except as hereinafter provided, the party for whom this appraisal
report was prepared may distribute copies of this report, in its entirety, to such third parties as
may be selected by the party for whom this appraisal report was prepared; however, selected
portions of this appraisal report shall not be given to third parties without prior written consent
of the signatories of this appraisal report. Further, neither all nor any part of this appraisal
report shall be disseminated to the general public by the use of advertising media, public
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 9
relations media, sales media or other media for public communication without the prior
written consent of the signatory of this appraisal report.
11. The Americans with Disabilities Act (ADA) became effective January 26, 1992. The
appraisers have not made a specific compliance survey and analysis of the subject property to
determine whether or not it is in conformity with the various detailed requirements of the
ADA. It is possible that a compliance survey of the property together with a detailed analysis
of the requirements of the ADA could reveal that the property is not in compliance with one
or more of the requirements of the act. If so, this fact could have a negative effect upon the
values of the property. Since the appraisers have no direct evidence relating to this issue, we
did not consider possible noncompliance with the requirements of ADA in concluding the
values of the property.
12. The appraisers are not experts at the identification of environmental hazards. This assignment
does not cover the presence or absence of such substances. Any visually detected or obviously
known environmental problems affecting the property will be reported and their impact on
the values will be discussed.
13. This appraisal assignment was not made nor was the appraisal rendered on the basis of a
requested minimum valuation or specific valuation.
14. The appraisers are not building inspectors and this report does not constitute a building
inspection for the subject property. Any obvious defects are noted (if applicable); however,
this report is not to be relied upon for detection of unseen defects for the subject property.
15. This appraisal was prepared for the client and the intended user named in this report. The
analysis and conclusions included in the report are based upon a specific Scope of Work
determined by the client and the appraisers and are not valid for any other purpose or for any
additional users other than noted in this report.
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SCOPE OF WORK FOR THE APPRAISAL
The subject property consists of a 17,500 square foot site with asphalt paving at 228 Main Street
in the City of Kalispell, Flathead County, Montana. We were asked to provide our opinion of the
market value of the subject property in As Is condition. The fee simple interest is concluded for
the subject property in this report.
The scope of the appraisal requires compliance with the Uniform Standards of Professional
Appraisal Practice promulgated by the Appraisal Standards Board of the Appraisal Foundation
and the Guide Notes to the Standards of Professional Appraisal Practice adopted by the Appraisal
Institute. The standards contain binding requirements and specific guidelines that deal with the
procedures to be followed in developing an appraisal, analysis, or opinion. The Uniform Standards
set the requirements to communicate the appraiser’s analyses, opinions and conclusions in a
manner that will be meaningful and not misleading in the marketplace.
Scope of Property Viewing
Elliott M. Clark, MAI and Christopher D. Clark of Clark Real Estate Appraisal viewed the subject
property November 4, 2020.
Scope of Research
The history of ownership, historical property uses, and current intended uses were researched via Ms.
Katharine King, the area MLS, and public record.
Area trends in development were researched based upon information from the City of Kalispell;
Flathead County; inspections of surrounding properties by the appraisers; interviews with area
developers, property owners and property managers; and research regarding current and projected
demographics in the immediate and greater subject market area.
Comparable market data was obtained through a combination of public record, area realtors;
developers; area property owners; and local, statewide, and national sales databases. Every effort was
made to verify all comparable data with a party involved in the transaction.
Highest & Best Use
Our opinion of the highest and best use for the subject property was developed using the research
collected relative to the subject property, area development trends and demographics. The information
collected is considered comprehensive and provides a credible basis for a carefully considered
analysis. The appraisal process presented was based upon the highest and best use conclusion for the
subject property.
Extraordinary Assumption(s)
An Extraordinary Assumption is defined in 2020-2021 version of the Uniform Standards of
Professional Appraisal Practice (USPAP) published by the Appraisal Standards Board to be “an
assumption, directly related to a specific assignment, as of the effective date of the assignment results
which, if found to be false, could alter the appraiser’s opinions or conclusions.”
There are no Extraordinary Assumptions associated with this appraisal report.
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Hypothetical Conditions
A Hypothetical Condition is defined in 2020-2021 version of the Uniform Standards of Professional
Appraisal Practice (USPAP) published by the Appraisal Standards Board to be “a condition, directly
related to a specific assignment, which is contrary to what is known by the appraiser to exist on the
effective date of the assignment results but is used for purpose of analysis.”
There are no Hypothetical Conditions associated with this appraisal report.
Appraisal Process
There are three recognized approaches in the valuation of real property. They are the Cost, Sales
Comparison, and Income Approaches. The subject property includes asphalt paving but is best
described as a vacant site. The Sales Comparison Approach is the most credible methodology for the
valuation of vacant land (or for properties when the land value is the most significant component of
the value). The Sales Comparison Approach was the only approach developed to determine the value
for the subject property.
Environmental
The appraisers are not experts regarding the detection and measurement of hazardous substances,
unstable soils, or freshwater wetlands. Therefore, this assignment does not cover the presence or
absence of such substances as discussed in the Limiting Conditions section of this report. However,
any visual or obviously known problems affecting the property will be reported and their impact
on the values will be discussed.
General Data Sources
Individuals and offices consulted in order to complete this appraisal include the following:
Various Departments of the City of Kalispell;
Various Departments of Flathead County;
Montana Department of Revenue;
Montana Regional MLS & Co-Star;
Various Area Real Estate Agents, Real Estate Appraisers, Property
Managers, Property Owners, Tenants, and Builders (Noted as
appropriate in this report.)
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IDENTIFICATION OF THE SUBJECT PROPERTY
The subject property is located at 228 Main Street in the city limits of Kalispell, Flathead County,
Montana. The subject assessor number is included in the Summary of Salient Data and
Conclusions section of this report. The legal description for the subject property is included in
Property Description section of this report.
DATE OF PROPERTY VIEWING
November 4, 2020
EFFECTIVE DATE OF MARKET VALUE
November 4, 2020
PROPERTY RIGHTS APPRAISED
The fee simple interest in the subject property in “as is” condition is valued in this report. The fee
simple interest is full, complete, and unencumbered ownership subject only to the governmental
rights of taxation, police power, eminent domain, and escheat. This is the greatest right and title,
which an individual can hold in real property.
PURPOSE OF THE APPRAISAL
The purpose of this appraisal is to conclude an opinion of the market value for the subject property in
“as is” condition as of November 4, 2020.
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INTENDED USE & INTENDED USER OF THE APPRAISAL
It is understood that the intended use of this appraisal is to assist the City of Kalispell with decisions
regarding potential disposition of the subject property. This report was prepared for the City of Kalispell,
the client, and is their exclusive property. No third parties can rely upon this report without the express
written consent from both the appraisers and the client.
DEFINITION OF MARKET VALUE
Market value is defined in the following manner:
"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."1
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 US 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.
1 Office of the Comptroller of the Currency - Comptroller's Manual for National Banks, March 1990, 12CFR, parts 34.
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HISTORY OF SUBJECT PROPERTY & STATEMENT OF OWNERSHIP
Statement of Ownership
The subject property is owned by the City of Kalispell. The property most recently transferred
from Valley Bank of Kalispell to the City of Kalispell via a Grant Deed recorded with the Flathead
County Clerk and Recorder’s Office on May 19, 1999. The consideration is not known by the
appraisers.
We did not locate any transfers of the subject property within the three years prior to the report
effective date.
Use History
According to Ms. Katharine King, with the City of Kalispell, and our research of public record,
the subject property has been utilized as a surface parking lot since 1999 or longer.
Marketing/Sales History
We did not locate evidence that the subject property had been marketed for sale during the three
years prior to the report effective date.
Leasing Activity
It is assumed for report purposes that if any of the parking spaces on the subject property are leased
that the leases are on a month-to-month basis.
Analysis of Most Recent Sales Price or Contract Price and Appraised Value
Not applicable.
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PROPERTY DESCRIPTION
The subject property is located at 228 South Main Street, in the city of Kalispell, Montana. The
property is legally described as Lots 8-12, Block 55, Kalispell Original Townsite, located in
Section 18, Township 28 North, Range 21 West, Flathead County, MT. The subject property is
further identified with Montana Department of Revenue tax assessor #000E000406. The property
consists of 0.402 acres or approximately 17,500 square feet site and is improved with an asphalt
paved parking lot. The subject property is owned by the City of Kalispell.
A. SITE DESCRIPTION
The subject site consists of 5 city lots. Each city lot has approximate dimensions of 25’ x 140’. The
property is located at the northwest corner of South Main Street and 3rd Street. The property is
bordered to the north by a commercial building, to the south by 3rd Street West, to the east by South
Main Street, and to the west by an alley. According to the Plat Map for the Kalispell Original Townsite
that was recorded on April 21, 1891, the dimensions for the property are 140.00’ along the north
boundary, 125.00’ along the east boundary, 140.00’ along the south boundary, and 125.00’ along the
west boundary. The property is improved with a paved parking lot with 46 spaces. Nine of the parking
spaces are metered and the remainder are permit only. The Plat Map and additional exhibits for the
property are below and on the following pages.
Plat Map for Kalispell Original Townsite
(Approximate Subject Parcel Boundaries Outlined in Yellow)
Subject Property
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Enlarged View of Plat Map
(Approximate Subject Parcel Boundaries Outlined in Yellow)
Flathead County GIS Map
(Subject Parcel Highlighted in Green)
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Montana Department of Revenue Cadastral Aerial
(Approximate Subject Parcel Boundaries Outlined in Blue)
Zoomed in Aerial View
(Subject Property Boundaries Identified with Red Marker)
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Zoomed Out Aerial View Showing Property Location in Relation to Kalispell
(Subject Property Identified with Red Marker)
B. STREET ACCESS, VISIBILITY, & PARKING
The subject property is located at the Northwest corner of the signalized intersection of South Main
Street and 3rd Street West. The subject site has approximately 125’ of frontage along South Main
Street which borders the property to the east, and approximately 140’ of frontage along 3rd Street
West. Main Street through Kalispell is also US Highway 93 and is the major commercial and traffic
corridor for the City. According to Montana Department of Transportation traffic data, the 2019
Annual Average Daily Traffic count for South Main Street approximately ½ block south of the subject
property was 16,850. The property has good visibility from South Main Street, and 3rd Street West.
There are sidewalks, curbing, and streetlights along South Main Street and 3rd Street West. Vehicular
access to the property is via a paved alley that borders the property to the west. The alley can be
accessed from 3rd Street West at the south, or from 2nd Street West at the north. The subject property
is utilized as a parking lot with 46 marked spaces. Nine of the parking spaces are metered and 37 are
by permit only. There is an overhead streetlight at the west boundary of the subject property and there
are streetlights along South Main Street and 3rd Street West.
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C. DESCRIPTION IMPROVEMENTS
The subject property is improved with an asphalt paved parking lot consisting of 46 marked spaces.
The parking lot is to be accessed from the alley at the southwest corner of the property, with an exit
at the northwest corner of the property. There are 12 spaces along the north and south property
boundaries and 22 spaces on interior rows. There is 1 streetlight at the west property boundary. There
are streetlights along South Main Street and 3rd Street West. Nine of the parking spaces are metered
and are located along the south property boundary and 3rd Street West. The remaining 37 spaces are
permit parking only. An exhibit depicting the site layout is below.
Parking Lot Layout Illustration
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D. EASEMENTS, BUFFERS, & RESTRICTIONS
Appraisers do not prepare complete title searches in normal course of business. According to
the most recently recorded deed for the subject property (Grant Deed #199913914300) dated May
19, 1999, the subject property is subject to a Party Wall Agreement that was recorded on May 11,
1901, a Building Encroachment as shown on Certificate of Survey #3790, and Covenants and
Restrictions. According to the deed, the subject property was granted to the City of Kalispell from
Valley Bank of Kalispell.
It is assumed that the Party Wall Agreement effects the northern boundary of the subject property
and may have been relevant to a shared wall with the building to the north of the subject property in
the past. Party Wall Agreements are common when there is a shared building wall and typically
address issues such as shared ownership and maintenance obligations. Since there is no building on
the subject property, the Party Wall Agreement may or may not be relevant.
The Building Encroachment is the result of a 0.6’ wide area at the northeast corner of the subject
property where the building to the north encroaches on the subject property. The encroachment area
is minor and is not considered to have an impact on the value of the subject property.
The Covenants and Restrictions limited the use of the subject property to a parking lot for a period
of 10 years. At the termination of the 10-year period, the Grantee (City of Kalispell) granted to the
Grantor (Valley Bank of Kalispell) a 2-year option to repurchase the subject property.
No easements were identified on the most recent plat map for the subject property. No easements
were identified in a search of the Flathead County on-line recordation system. It is assumed that
necessary easements for utilities are underground and/or along the street or alley right of way. These
include water, sewer, electrical, natural gas, telephone, and internet service. If any additional
easements, restrictions, or encroachments are present on the subject site the value indicated may be
affected. An exhibit from Certificate of Survey #3790 showing the building encroachment is included
on the following page.
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Encroachment Exhibit
(Approximate Encroachment Area Outlined in Red)
E. TOPOGRAPHY, VEGETATION, FLOOD ZONE, SOIL CONDITIONS, &
ENVIRONMENTAL CONSIDERATIONS
The topography of the subject site is level with street grade along South Main Street, 3rd Street West,
and the Alley bordering the property to the west. The subject site is covered by the asphalt paved
parking lot.
We have not been provided with a soil study for the subject site. We assume the soil can
accommodate the type of construction that is typically seen in the subject area. We have not been
provided with an environmental audit for the subject site but assume there are no toxic or hazardous
materials, groundwater contamination or unstable soils that may be on or in the site. Should any of
these conditions be present, the value concluded in this report may be affected.
According to the Federal Emergency Management Agency (FEMA) Flood Zone Map (Map Panel
#30029C1805J) dated November 4, 2015, the property is not located in an area of elevated flood
risk. An exhibit based on the flood map data is on the following page.
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Flood Map
(Subject Property Location Identified with Red Marker
F. UTILITIES
The subject site has access to all necessary utilities including electricity, natural gas, telephone,
internet services, and city water and sewer service. According to an exhibit provided by the City
of Kalispell, there is a sewer line that runs along the alley to the west of the subject property,
stormwater lines that run along the alley and 3rd Street West, and a water main that runs along the
east side of South Main Street.
G. PUBLIC SAFETY & SERVICES
Police, fire protection, ambulance service, and other services are provided by the City of Kalispell.
Essential services such as schools, medical facilities, shopping, and recreation are available in
Kalispell.
H. ZONING REGULATIONS
The subject property is in the City of Kalispell B-4, Central Business Zoning. The intent of the
B-4 zoning district is to provide;
“A business district intended to set apart that portion of the city which forms the center for financial,
commercial, governmental, governmental, professional, and cultural activities. This district is not
intended for general application throughout the planning area. This zoning district would typically
be found in areas designated as commercial on the Kalispell Growth Policy Future Land Use Map.”
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 23
Permitted Uses in the B-4 zoning district include athletic club, auto parking, bed and breakfast,
bakery, banks and financial institutions, barber and beauty services, bus station, car wash, catering
establishments, church, community center, day care, dwellings (single-family, duplex, townhouse (2
attached units), multi-family (multi-family on the second or higher floor are permitted), fairgrounds,
food bank, funeral homes and crematoriums, home occupations, hotel/motel, jail facilities, police and
fire stations, libraries, museums and similar cultural facilities, laundromats or dry cleaners, media
(newspaper, radio, TV), media, towers and facilities, microbreweries, office-
professional/governmental / medical with limited overnight stay, parks, pack and ship shops,
photographic studio, post office, print and copy shops, recreation area (indoor), repair shops (clothing,
electronics), restaurants, retail business, schools (K-12 public, post-secondary public, commercial),
safe houses, tattoo parlors, theaters, veterinary clinics – small animals.
Conditional Uses in the B-4 zoning district include assembly halls/stadiums/convention halls
(includes public fair grounds, auditoriums, and racetracks, auto (RV, boat, motorcycle) sales and/or
repair, auto parking – structure, auto service station, bars taverns and clubs, casino, dwellings –
townhouse (3 or more attached units) multi-family, group home (8 or fewer persons, 9 or more
persons), homeless shelters, residential care home or facility, utilities (primary distribution site).
There is no minimum lot area in the B-4 zoning district. There is no minimum lot width, or lot
setback requirements. The maximum building height is 60 feet.
The subject property is subject to City of Kalispell Parking Regulations and is located within City
of Kalispell Parking District #3. There are no off-street parking requirements in this parking
district. An exhibit showing the subject parking district is included below.
Parking District Map
Subject Property
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 24
Zoning Compliance Comments
“Auto Parking” is an allowable use in the B-4 Central Business Zoning District. If the subject
property were to be developed for use other than a parking lot, property use would have to adhere
to allowable or conditional uses within the B-4 zoning district. These comments do not constitute
a thorough zoning compliance analysis. For further questions regarding zoning and compliance of
the subject property we recommend contacting the City of Kalispell Planning and Zoning
Department. A zoning map identifying the subject zoning is included below.
Zoning Map
(Subject Property Shaded in Green)
According to a Development Area Exhibit provided by the City of Kalispell, the subject property
is located within the Downtown Plan area, The Urban Renewal Plan area, The Historic District,
and the Business Improvement District. An Exhibit identifying the location of the subject property
within these areas is included on the following page.
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 25
Plan Area Exhibit
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 26
The Downtown Plan is a vision statement for a 24-block area of downtown Kalispell which was
adopted as an Amendment to the City of Kalispell Growth Policy Plan-It 2035. One of the purposes
for the Downtown Plan was to create a future Financing mechanism for a Tax Increment Financing
District or TIF. The Downtown Plan identifies an Urban Renewal Plan Area. Properties in this
area are potentially eligible to participate in the TIF program. Elimination of blight and
encouragement of urban rehabilitation are additional purposes of the Downtown Plan.
The subject property is in the Business Improvement District. This is the coverage area for a non-
profit group whose goal is to foster a safe, attractive, unique, and well-functioning place.
I. ASSESSMENTS/PROPERTY TAXES
The subject property is identified as Montana Department of Revenue tax assessor #E000406. The
subject property is owned by the City of Kalispell and is Tax exempt. A table showing the Montana
Department of Revenue market value for the property is below.
J. PROPERTY SUITABILITY
The subject property is in the central business district of Kalispell and includes frontage along Main
Street. The subject property has sufficient size, shape, visibility, and access for many legally
permissible commercial uses. Property suitability is addressed in greater detail in the Subject Market
Analysis and Highest and Best Use sections of this report.
$220,500.00
$0.00Total 2020 Tax Bill
2020 Real Property Tax Bill Information
E000406
Taxable Value - N/A Tax Exempt
Market Value (for Tax Purposes)
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 27
SUBJECT PHOTOGRAPHS
Subject Property Looking Northwest from Southeast Corner View West along South Portion of Property
View West along North Portion of Property View Looking Northeast from Southwest Property Corner
View East along North Portion of Property View East along South Portion of Property
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 28
ADDITIONAL PHOTOGRAPHS
Subject Property Looking North across W. 3rd Street Commercial Building at SE Corner of S. Main & 3rd St. W.
Commercial Building at NE Corner of S. Main & 3rd Street W. Commercial Building at SW Corner of S. Main & 3rd St. W.
S. Main Street Looking North S. Main Street Looking South
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 29
ADDITIONAL PHOTOGRAPHS
3rd Street W. Looking East 3rd Street W. Looking West
Intersection of 3rd Street and S. Main Street Looking East 3rd Street W. Looking West
Alley along West Property Boundary Looking South Alley along West Property Boundary Looking North
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 30
SUBJECT MARKET ANALYSIS
Detailed county and local demographic and economic information is included in the Addendum
of this report. General national and statewide data is included as well.
This portion of the appraisal is relative to the subject property as at completion and at stabilization.
General Property Description
The subject property has been described in detail in prior sections of this report. It is a commercial
site in the central business district of Kalispell improved with an asphalt parking lot. The site totals
17,500 square feet and includes frontage along and visibility from Main Street.
Area Land Use Trends
Neighboring properties include; office buildings, hotels, retail buildings, and mixed use
commercial properties. Most area properties in the central business district are improved with
buildings. Most building with frontage along Main Street are two stories. Sites without buildings
are typically utilized as parking lots. An aerial view of the subject and surrounding properties is
below.
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 31
As noted in the Property Description, the subject property is the Urban Renewal Plan area of the
Downtown Plan. It is also in the Historic District of downtown Kalispell.
Property Use Conclusions
Uses that would take best advantage of location in the central business district and along Main
Street are considered appropriate. Construction of a multi-story, mixed use, commercial building
with adequate space for required parking is determined to be the highest and best use for the subject
property.
Potential Users of Subject Property
The potential uses of the subject property would be investors seeking to construct a multi-story,
mixed use, commercial building in the central business district of Kalispell.
Demand Analysis
Historical market activity can shed light on future trends. We conducted a search of the area MLS
for sales of vacant commercial sites (or properties with improvements of little or no value) in the
central business district of Kalispell. There was not a sufficient number of sales located to prepare
a credible statistical analysis. We altered the search parameters to consist of improved commercial
properties in Kalispell. The historical sales data located is graphed below;
There was an average of 37 commercial improved sales per year in Kalispell between 2015 and
2019. There have been 49 sales as of Year-to-Date 2020. The sales to date in 2020 reflect an
increase in demand compared to the prior years presented.
Competitive Supply
There were 48 active listings of improved commercial properties in Kalispell as of the report date.
The average list price was $1,527,588.
Interaction of Supply and Demand
Based on sales volume in 2020 Year-to-Date, there is an approximate 1 year supply of improved
commercial properties in Kalispell available for sale via the area MLS. The average list price at
Source: MT Regional MLS
Year-to-Date
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 32
$1,527,588 is approximately 2 times the average sales price received to date in 2020. Supply and
demand are in relative balance; however, due to the relatively high average list price, there will
likely be downward price pressure on these active listings in order for them to sell within historical
marketing times.
Subject Marketability Conclusion
Based upon the location of the subject property (in the central business district with frontage along
Main Street), it is considered to have above average marketability compared to other commercial
sites.
Marketing /Exposure Time
Land Sales 1, 2 , 3 and 4 were marketed for 87 days, 30 days, 509 days, and 32 days, respectively.
The marketing time for Land Sale 3 at 509 days appears to be an outlier. Upon removal of the
marketing time for Land Sale 3, the average marketing time for the remaining sales is 50 days. The
average marketing time for improved commercial sales in Kalispell as of 2020 Year-to-Date was
221 days. Based upon this data, if the subject property were available sale at a market supported
price, a marketing time of 3 to 6 months would be expected. The values concluded in this report
are based upon 3 to 6 month exposure time if the property had sold for the appraised value on the
effective date of this report.
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 33
COVID-19/RECENT MARKET VOLATILITY ANALYSIS
As of the publish date of this appraisal report, the U.S. economy was exhibiting a high level of
volatility caused by the worldwide COVID-19 pandemic. The long-term impacts on the US
economy are not known. Market data included in this report, including the utilized comparable
data, predates this market volatility. The values concluded in this report are based upon data
available as of the report publish date of November 30, 2020, and future impacts to the value
conclusions herein in relation to the COVID-19 pandemic are unknown.
Governor Bullock originally issued a Stay at Home Directive effective March 28th through April
10th for Montanans, which closed all non-essential businesses. This was extended to April 24th.
As of April 26th, the governor began a phased lifting of the directive (3-phase re-opening plan) for
Montana. Phase 1 included opening of some businesses, but adherence to sanitation and social
distancing was required during Phase 1. Phase 2 further relaxed requirements, but maintenance of
social distancing practices still applied. As of the report publish date, Montana was in Phase 2
(entered into Phase 2 on June 1, 2020). It is noted that starting May 4th, restaurants, bars, etc. were
able to begin providing some in-establishment services, and the statewide school closure was lifted
on May 7th, with the decision to reopen schools being left to local school districts. Phase 3 will
include no restrictions on group size or activities; however, physical distancing and observance of
CDC recommended practices are advised.
As mentioned, the comparable data, as well as a majority of the general market data included in
this report predates the Stay at Home Directives and market volatility. Given the market data
predates any changes in market conditions due to COVID-19, we have surveyed market
participants to gauge the reaction to date to these recent local and world events. The following
summarizes the market participant interviews:
David Laird, Owner of Laird Steely Structures, a general contractor that builds residential
and commercial structures in the Flathead Valley. Mr. Laird reported that he has recently
communicated with all of his clients after the outbreak of the coronavirus pandemic, and
he has not had one client decide to stop the construction process on their project, including
both projects under construction, and planned projects. As of the month of May, he has
continued to receive weekly requests for bids on new projects, including additions, small
shops, etc. It is also noted that he successfully closed on the sale of his office/warehouse
property in Bigfork on April 30th. As of July, Mr. Laird reported that his 2020 year-to-date
figures are similar to prior year figures through July, and that he is projecting to have one
of his best years in sales by the end of 2020.
David Stone, CCIM, broker with PureWest Real Estate in Kalispell, MT with 18 years of
experience representing buyers and sellers of both residential and commercial properties.
Mr. Stone reported that as of April, activity had slowed down somewhat. Sellers of single-
family residential homes had been restricting showings, as they did not want people
walking through their homes, and virtual tours were becoming a more popular option.
Commercial leasing activity has slowed in the Flathead Valley. David reported that he has
had offers rescinded on two commercial properties in the valley due to the recent turbulent
markets. However, Mr. Stone has not yet seen a decrease in list prices. Additionally, it was
mentioned that although there has been a recent pullback in activity, Mr. Stone feels that
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 34
real estate still has good fundamentals, and he opined that given the recent volatility is
largely due to the coronavirus and not poor real estate fundamentals, that the
market/activity will rebound strongly once the volatility settles down. As of the month of
May, residential activity has been hampered by a limited number of listings (decreased
inventory), which has resulted in multiple offers on properties. Mr. Stone reported that
commercial activity has slowed down (particularly retailers/restaurants), and that lenders
have begun tightening their due diligence/underwriting. However, he still has not seen any
price compression, and feels that the long-term outlook for Montana is positive. As of July,
Mr. Stone reported that he has seen an enormous uptick in activity, both in residential and
commercial sales. He currently has a listing of a restaurant property in Kalispell and has
been receiving significant buyer interest over the past month in the property. It was noted
that commercial leasing has remained slow and has been generally slow over the past year
or two.
Cecil Waatti, realtor with LandStar Group in Kalispell, MT. Mr. Waatti is heavily involved
in investment real estate in the Flathead Valley, both from an ownership standpoint, as well
as representing buyers, sellers and tenants. As of the month of April, Mr. Waatti had seen
a slight pullback from some investors that want to essentially “sit on cash” or take a “wait
and see” approach. However, he was still receiving offers from prospective buyers, and has
not seen any change in list prices. Additionally, it is his sense that from the market
participants he has interacted with, there does not appear to be a significant amount of
unreasonable or irrational fear. As of the month of July, Mr. Waatti reported a continued
strong investor/buyer demand for commercial, multi-family residential and single-family
residential properties. Commercial leasing, which has reportedly been slow over the past
couple years in the Flathead Valley, has continued to remain slow over the past several
months.
David Girardot, CCIM, broker with PureWest Real Estate in Kalispell, MT with 26 years
of experience representing buyers and sellers of both residential and commercial
properties. According to Mr. Girardot, as of the month of April he was still receiving
inquiries from prospective buyers on commercial properties. However, he wondered at
what level banks will be able to continue issuing loans in the current environment.
Nevertheless, Mr. Girardot has not seen a decrease in list prices, and he also reported
receiving three LOI’s to lease commercial space in April. As of May, Mr. Girardot reported
that some people have begun to be reluctant to put their properties on the market. However,
it was mentioned that buyers/sellers are still doing business, and he has not noticed a change
in value/pricing. As of July, Mr. Girardot mentioned that activity has started to “come
back” somewhat. However, he has recently had some clients with office space looking to
downsize, as office workers have been working from home due to COVID, and this
temporary change may turn into a more permanent working structure.
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 35
Tory Baughan, real estate agent with Montana West Realty. Mr. Baughan deals primarily
with residential properties, but also does some commercial work. According to Mr.
Baughan, as of April he has seen a slight pullback from some clients that want to essentially
“sit on cash” or take a “wait and see” approach. However, he has still been able to move
forward on several deals, and he opined that the coronavirus pandemic has not yet caused
a significant/long term effect on the local market. As of May, Mr. Baughan reported that
buyer activity/demand has remained strong. Tory mentioned that he has both seen himself
and heard from other realtors of an uptick in interest in the Flathead Valley from out-of-
state buyers/investors. Mr. Baughan also reported that he is in the process of finalizing a
lease on new shop space, with a reported term in the range of 4-5 years to a tenant from
Calgary, Alberta, Canada. As of July, Mr. Baughan reported that it has remained difficult
to get homes under contract, due to the higher buyer demand and limited inventory
available for sale. He has had success leasing out new shop/warehouse space in Kalispell.
Michael Anderson, realtor with National Parks Realty with 15 years of experience in the
Flathead Valley. Mr. Anderson is the listing agent for several mixed-use properties in the
downtown Whitefish area. As of April, he mentioned that he has recently had a couple
residential condo units that were under contract to cash-investment buyers fall through due
to the recent events. However, it was reported that end-user buyers have not been canceling
their contracts. Additionally, he reported that due to increased construction costs, he has
increased the listing prices of those units that have come back on the market. Mr. Anderson
also mentioned that although a couple of his large pending real estate transactions he had
under contract in the Flathead Valley have fallen through recently, he has actually seen an
uptick in investor interest in the area from out-of-state/large market investors looking to
invest in the valley. Several of these investors are reportedly ready to purchase properties
sight-unseen. Mr. Anderson reported that as of the end of March 2020, he had put $6
million worth of residential property under contract since Friday, March 27th. He opined
that the real estate market in the Flathead Valley will likely boom after “things settle
down”. As of May, Mr. Anderson reported that there is still a lot of demand from
prospective buyers. However, in his dealings he has noticed a tightening of underwriting
standards from lenders, and it has become more difficult for buyers to obtain loans. It was
mentioned that the availability of both jumbo loans and secondary market loans have
become scarce. As of July, Mr. Anderson reported that on the residential side he is as busy
as he has ever been. Homes are selling immediately with multiple offers, and he is seeing
sale prices “$40,000 higher than they should be”. Commercial activity was reported as
somewhat slower than the residential market, but the properties are still selling.
DJ Walker, Owner/Broker, Premiere Real Estate Professionals, Inc., over 28 of experience
in the Flathead Valley: As of the month of May, Mr. Walker reported that in his experience,
activity slowed in the early stages of the pandemic, as some investors took a “wait and see”
approach. However, he has noticed increased activity/buyer interest over the past couple
weeks on both residential and commercial properties. Mr. Walker opined that the Flathead
Valley will likely see a strong rebound after the market turbulence settles down. It was also
mentioned that he has noticed a slight tightening of underwriting standards from lenders,
primarily on residential deals. As of July, Mr. Walker has seen an increase in activity. On
the single-family residential side, activity is very high, and it has been common to receive
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 36
multiple offers above the asking price. It was reported that his commercial listings have
been generating significant activity/interest. Lastly, it was also mentioned that building
costs have been increasing recently as well, including both materials and labor costs.
Linda Pistorese, Owner/Broker, Flathead Valley Brokers, over 20 years of experience in
the Flathead Valley: Ms. Pistorese has extensive experience in both residential sales, and
commercial leasing and sales. As of September 2020, she reported that residential sales
volume in Flathead County is up approximately 20% for YTD figures when compared to
the same time period in 2019. Commercial sales volume has been strong in 2020 as well;
however, leasing activity appears to have slowed down somewhat over the past several
months.
In addition to the previous interviews of brokers, property owners, and those in the construction
sector, we also interviewed several lending institutions to gain insight into their
observations/reactions to the COVID-19 events. We interviewed branch presidents, bank
managers and/or commercial/residential loan officers from the following institutions, which are
active in the Flathead Valley:
American Bank
Glacier Bank
Whitefish Credit Union
First Interstate Bank
Farmers State Bank
The following summarizes the questions asked, and responses of the surveyed institutions:
1. From a volume of transactions standpoint, have you noticed any change since the beginning
of the coronavirus crisis (including both residential and commercial real estate, and both
refinance and sale transactions)?
o The surveyed institutions reported that they have very remained busy since the
onset of the pandemic, ranging from typical volume levels to one institution
reporting that overall volume is up approximately 23% from January to April 2020
when compared to the same time period in 2019. Another institution reported record
levels of residential refinancing transactions for year-to-date 2020.
2. Has there been any change in borrowers’ ability to make mortgage payments on residential
and commercial real estate loans?
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 37
o Several institutions reported that given it has only been approximately two months
since the onset of the pandemic, there has generally not been much change.
However, it was noted that the hospitality/lodging and bar/restaurant sectors have
been hit the hardest by the pandemic, and there have been instances in these sectors
of property owners struggling to make payments. Additionally, Paycheck
Protection Program (PPP) loans have helped to ease stress for some sectors of the
market. It was noted that deferments have been issued for some borrowers, and the
overall consensus was that lending institutions are taking a relatively
patient/flexible approach in working with borrowers during these uncertain times.
3. Has there been any significant movement in interest rates since the onset of the pandemic?
o Every interviewed institution reported that interest rates have remained low over
the past several months. This has led to an increase in refinance transactions.
4. Have you made any changes to your underwriting standards as a result of the pandemic?
o The general consensus was that significant changes have not been made. There has
been a greater focus put on due diligence to look more closely at borrowers’
liquidity/ability to service debt over the next 6 months. One institution reported
they have reduced loan-to-value ratios from 80% to 75% for larger loans (up to $1
million). It was also mentioned by several institutions that jumbo loans/secondary
market loans have become scarce.
Coronavirus/Recent Market Turbulence Conclusion
Based on the commentary provided by the interviewed market participants, it appears that although
there is some uncertainty, there does not appear to be evidence of a significant decrease in in
property pricing or prospective buyer interest. Nevertheless, future impacts in relation to the
COVID-19 pandemic to the value concluded in this report are unknown at this time.
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 38
HIGHEST AND BEST USE
The four basic economic principles of supply and demand, substitution, balance and conformity are
considered to be the basic tools of analyzing the relationship between economic trends and an
appraisal. Market forces create market value. For this reason, the analysis of highest and best use is
very important. When the purpose of an appraisal is to conclude a market value, highest and best use
analyses identify the most profitable, competitive use to which a property can be used.
It is important to recognize the possibility that the Highest and Best Use of the land could differ from
the Highest and Best Use of the property. This occurs when a site has existing improvements and the
Highest and Best Use of the land differs from the current use. Often, the current property use will
continue until the value of the land, under its Highest and Best Use, less existing improvement
demolition costs, exceeds the total value of the property in its present use.
The Highest and Best Use analyses and conclusions for the subject property are included on the
following page.
According to The Appraisal of Real Estate – 14th Edition by the Appraisal Institute, Highest and Best
Use is defined as follows:
"The reasonably probable and legal use of vacant land or an improved property that is physically
possible, appropriately supported, financially feasible, and that results in the highest value."
The analysis for Highest and Best Use considers first the reasonably probable uses of a site that can be
legally undertaken. The final Highest and Best Use determination is based on the following four criteria:
Legally Permissible:
The availability of land for a particular use in terms of existing regulations and restrictions, deed
restrictions, lease encumbrances, or any other legally binding codes, restrictions, regulations,
or interests.
Physically Possible:
The physical adaptability of the site for a particular use.
Financially Feasible:
All uses that are legally permissible and physically possible that are likely to produce an income,
or return, equal or greater than the amount needed to satisfy operating expenses, financial
obligations, and capital amortization are considered to be financially feasible.
Maximally Productive:
Of the financially feasible uses, the use that produces the highest net return or the highest
present worth.
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 39
As If Vacant
Legally Permissible
The subject property is in in the B-4, Central Business zoning district of the City of Kalispell. Most
permitted uses is this zoning district are commercial in nature. Multi-family dwellings are
permitted on second or higher floors. Additionally, there is no minimum site area or setbacks in
this zoning district. The subject property is located in Parking District 3 of the City of Kalispell.
There are no off street parking requirements in this Parking District.
Physically Possible
The subject site consists of 5 city lots and includes frontage along Main Street. The subject site has
suitable topography, access, shape, size, and access to necessary utilities for a wide variety of uses.
Financially Feasible
Area improved properties with frontage along Main Street are predominantly improved with multi-
story, mixed use, commercial buildings. Based upon the types of buildings found in the immediate
subject area and analysis of market activity in the immediate subject area, construction of a similar
type of building would be financially feasible for the subject property as if vacant.
Maximally Productive
Based upon this analysis of the legally permissible, physically possible, and financially feasible
uses of the subject property, the maximally productive highest and best use for the subject property
as if vacant is construction of a multi-tenant, mixed use, commercial building similar to that found
in the immediate subject area.
Highest and Best Use Conclusion
Based upon this analysis of the legally permissible, physically possible, financially feasible, and
maximally productive uses of the subject property, the highest and best use for the subject property
as if vacant is construction of a multi-tenant, mixed use, commercial building similar to that found
in the immediate subject area.
As Is
The subject property is improved with an asphalt paved parking lot with 46 identified parking
spaces. Based upon our analysis of the income producing ability of a 46 space parking lot in
downtown Kalispell, the resulting market value for the subject property as a parking lot is less than
the value concluded in this report “as is.” For this reason, eventual demolition of the existing
improvements and construction of a multi-tenant, mixed use, commercial building is concluded to
be the highest and best use for the subject property in “as is” condition.
The “as is” value concluded in this report includes consideration for future demolition of the
existing site improvements.
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 40
THE APPRAISAL PROCESS
In the foregoing sections of this report, we have examined and discussed the subject property. To
arrive at a conclusion of market value for the subject property, it is necessary to collect and analyze
all available data in the market which might tend to indicate the value of the subject property. The
subject property must be compared to similar properties that can be constructed, purchased, or from
which a similar monetary return may be received.
The subject property includes asphalt paving; however, the improvements do not contribute value to
the property. For that reason, the subject is best described as a vacant site. The Sales Comparison
Approach is the most credible methodology for the valuation of vacant land (or for properties when
the land value is the most significant component of the value). The Sales Comparison Approach was
the only approach developed to determine the value for the subject property. It is presented in the
following section of this report.
APPROACHES IN THE VALUATION OF REAL PROPERTY
The three recognized approaches in the valuation of real property are Sales Comparison, Cost Approach
and Income Capitalization. According to The Appraisal of Real Estate – 14th Edition by the Appraisal
Institute, the approaches are described as follows:
Cost Approach
In the Cost Approach, value is estimated as the current cost of reproducing or replacing the
improvements (including an appropriate entrepreneurial incentive or profit), minus the loss in value
from depreciation, plus land value.
Sales Comparison Approach
In the Sales Comparison Approach, value is indicated by recent sales of comparable properties in the
market.
Income Capitalization Approach
In the Income Capitalization Approach, value is indicated by a property’s earning power based on the
capitalization of income.
Each of the three approaches to value requires data collection from the market and each is governed equally by
the principle of substitution. This principle holds "when several similar or commensurate commodities, goods
or services are available, the one with the lowest price will attract the greatest demand and widest distribution”.
(Source: The Appraisal of Real Estate – 14th Edition by the Appraisal Institute)
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 41
SALES COMPARISON APPROACH
A search was conducted for sales of vacant commercial sites or sites with minimal improvements
in the downtown Kalispell area. The price per square foot is determined to be the appropriate unit
of comparison. Due to the limited number of comparable sales, it was necessary to use sales that
closed more than 1 year prior to the report effective date. The comparables selected are described
on the table below;
A complete description of each sale is included in the comparable land sale write-ups provided in
this section of this report. A map depicting the locations of the subject and comparables is below;
Land Sales Map
Land Sale #Address City Sale Date Sales Price Square Feet $/SF
1 617 W Idaho St Kalispell 2020 $315,000 20,822 $15.13
2*305 & 313 2nd Ave W Kalispell 2020 $242,000 17,511 $13.82
3 31 Three Mile Dr Kalispell 2019 $450,000 45,302 $9.93
4 601 619 E Idaho St Kalispell 2019 $221,000 14,596 $15.14
Land Sales Analysis
*The estimated contributory value of the improvements on Land Sale 2 were deducted from the sales price on this table.
Subject Property
Land Sale 3
Land Sale 1
Land Sale 2
Land Sale 4
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 42
LAND SALE 1
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 43
LAND SALE 2
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 44
LAND SALE 3
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 45
LAND SALE 4
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 46
Sales Comparison Analysis Grid for Subject Property
Adjustments have been considered for differences between the sales and the subject property. Any
adjustments made are noted on the spreadsheet below;
DESCRIPTION SUBJECT SALE 1 SALE 2 SALE 3 SALE 4
IDENTIFICATION 228 Main St 617 W Idaho St 305 & 313 2nd Ave W 31 Three Mile Dr 601 & 619 E Idaho St
CITY Kalispell, MT Kalispell, MT Kalispell, MT Kalispell, MT Kalispell, MT
SALES PRICE $315,000 $295,000 $450,000 $221,000
ADJUSTMENT FOR LIST PRICE $0 $0 $0 $0
ADJUSTMENT FOR IMPROVEMENTS $0 -$53,000 $0 $0
PROPERTY RIGHTS Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple
PROPERTY RIGHTS ADJUSTMENT $0 $0 $0 $0
FINANCING Market Market Market Market Market
FINANCING ADJUSTMENT $0 $0 $0 $0
CONDITIONS OF SALE Market Market Market Market Market
CONDITIONS OF SALE ADJUSTMENT $0 $0 $0 $0
ADJUSTMENTS FOR BUYER EXPENDITURES
DEMOLITION $0 $0 $0 $0
ENVIRONMENTAL $0 $0 $0 $0
OTHER $0 $0 $0 $0
LEGAL/ZONING $0 $0 $0 $0
DATE OF SALE 10/23/20 09/25/20 10/25/19 07/19/19
MARKET CONDITIONS FACTOR 1.001 1.002 1.021 1.026
ADJUSTED PRICE $315,207 $242,530 $459,271 $226,740
SITE SIZE/SQUARE FEET 17,500 20,822 17,511 45,302 14,596
ADJUSTED SALES PRICE PER SF $15.14 $13.85 $10.14 $15.53
ADJUSTMENT FOR:
LOCATION Kalispell CBD Kalispell CBD Kalispell CBD Kalispell North Kalispell CBD
Equal = Equal = Equal = Equal =
DOWNTOWN RENEWAL PLAN AREA Yes No Yes No No
Equal = Equal = Equal = Equal =
ACCESS/VISIBILITY Main Street Highway Interior CBD Street Secondary Traffic
Corridor Highway
Equal = Inferior + +Inferior +Equal =
SHAPE Rectangular Rectangular Rectangular Rectangular Rectangular
Equal = Equal = Equal = Equal =
TOPOGRAPHY Level Level Level Level Level
Equal = Equal = Equal = Equal =
VIEW Similar Properties Similar Properties Similar Properties Similar Properties Similar Properties
Equal = Equal = Equal = Equal =
ZONING B-4 B-2 B-4 B-1 B-2
Equal = Equal = Equal = Equal =
SITE IMPROVEMENTS REQUIRING DEMOLITION OR RENOVATION Asphalt Parking Lot Asphalt Parking Lot &
948 SF Building
None Since Adjustment
was Made for
Contributory Value of
Improvements
None Asphalt Parking Lot &
384 SF Building
Equal = Superior - Superior - Equal =
ATYPICAL EASEMENTS None None None Yes None
Equal = Equal = Inferior +Equal =
UTILITIES
Electricity, Telephone,
City Water & Sewer
Available
Electricity, Telephone,
City Water & Sewer
Available
Electricity, Telephone,
City Water & Sewer
Available
Electricity, Telephone,
City Water & Sewer
Available
Electricity, Telephone,
City Water & Sewer
Available
Equal = Equal = Equal = Equal =
SIZE/SQUARE FEET 17,500 20,822 17,511 45,302 14,596
Equal = Equal = Inferior + +Equal =
OVERALL RATING COMPARED TO SUBJECT Equal = Inferior +Inferior + + +Equal =
VALUE INDICATIONS PER SQUARE FOOT = $15.14 > $13.85 > > > $10.14 = $15.53
COMPARABLE SALES ANALYSIS FOR SUBJECT PROPERTY
228 MAIN STREET, KALISPELL, MONTANA
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 47
Discussion of Quantitative Adjustments
Adjustment for List Price: The comparables are all closed sales and no adjustment was necessary
in this category.
Adjustment for Improvements: The subject property includes an asphalt paved parking lot which
would require demolition prior to construction of improvements similar to those found in the area.
Land Sales 1 and 4 include improvements which would also require demolition at relatively similar
costs compared to the subject improvements. Land Sale 3 does not include improvements. No
adjustments were necessary for these comparables in this category. Land Sale 2 includes two older
buildings estimated to contribute $53,000 to the purchase price. A downward adjustment in this
amount was made to this sale to account for the contributory value of the improvements on this
property.
Property Rights: The ownership interest in this section of this report for the subject property and
for all of the land comparables is the fee simple interest. Consequently, no adjustments were
necessary in this category.
Financing: All sales were cash or cash equivalent; therefore, no adjustments were necessary in this
category.
Conditions of Sale: There were no atypical conditions of sale reported by the verifying parties for
any of the comparables. No adjustments were made to the comparables in this category.
Buyer Expenditures: There were no buyer expenditures noted for the land sales utilized in this
analysis. No adjustments were necessary in this category.
Market Conditions: The closed comparable sold in 2019 and 2020. There are typically few sales
each year of vacant commercial sites (or sites with improvements of minimal or no value) in the
subject market area. There were not a sufficient number of sales and re-sales of vacant commercial
sites to prepare credible paired sales analyses to determine the appropriate adjustment in this
category. Sales prices for improved commercial properties have increased in Kalispell over the
past few years. There is no final average sales price tally for improved commercial properties in
Kalispell for 2020 since the year is not over; however, demand increased significantly to date as
compared to the entire year of 2019. For this reason, some upward adjustment is considered
necessary for the comparables in this category.
We have made upward adjustments that equate to approximately 2.0% per year (comparison of the
sale date to the report effective date) to the comparables in this category. This adjustment
percentage is based upon changes in CPI-U All Urban Consumers (US Cities Average, All Items)
during the 10 years prior to the report effective date (2009 through 2018). The average annual rate
of change for the period was 1.8% per year. We have rounded this upward to 2.0%. A table with
the historical changes in CPI-U is included in the Addendum of this report.
Discussion of Qualitative Adjustments
The following adjustments are for categories where the comparables are different from the subject
property and differences in these categories were considered to potentially affect value; however,
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 48
there was not sufficient market data available on which to credibly base dollar amount or
percentage adjustments. These adjustments are identified as Equal =, Superior -, or Inferior +
compared to the subject property. We have used additional minuses or pluses to convey order of
magnitude when necessary.
Location: The subject property and comparables are located in or near the central business district
of Kalispell. The comparables are identified as Equal = compared to the subject in this category.
Downtown Renewal Plan Area: As noted in the Property Description section of this report, the
subject property is within the Urban Renewal area of Downtown Plan. Land Sale 2 is also with the
Urban Renewal area. Properties in this area may be eligible to participate in a Tax Increment
Financing program. We compared Land Sale 2 to the remaining comparables, and there is no
market data that suggests that location within the Urban Renewal Area results in higher or lower
sales prices for vacant commercial sites (or sites with improvements of little or no value). Based
upon this comparison, the comparables are identified as Equal = compared to the subject in this
category. Assuming downtown Kalispell is revitalized as planned, there may be market evidence
in the future that inclusion in this district impacts value for vacant commercial sites.
Access/Visibility: The subject property includes frontage along and visibility from Main Street in
downtown Kalispell. Main Street is a significant area traffic corridor. Land Sales 1 and 4 include
frontage along and visibility from Idaho Street (also part of US Highway 2) which is also a
significant area traffic corridor. Land Sales 1 and 4 are identified as Equal = compared to the
subject in this category. Land Sale 2 includes frontage along an interior street in downtown
Kalispell. Land Sale 2 is identified as Inferior + + compared to the subject property in this category.
Land Sale 3 includes frontage along and visibility from a secondary traffic corridor. This sale is
identified as Inferior + compared to the subject property in this category. The comparisons to the
subject property in this category are partially based upon traffic counts.
Shape: The subject and comparables have similar rectangular shapes. The comparables are
identified as Equal = compared to the subject in this category.
Topography: The subject property and comparables have sufficient level areas for development.
The subject and comparables are identified as Equal = in this category.
View: The subject and comparables have views of similar properties. The comparables are
identified as Equal = compared to the subject in this category.
Zoning: The subject property and Land Sale 2 are B-4, Central Business District of Kalispell. Land
Sales 1, 3, and 4 are in the B-1, Neighborhood Business or the B-2, General Business District of
Kalispell. These three zoning districts allow many similar uses with the most notable exception
being that multi-family dwellings are permitted on second of higher floors in the B-4 district.
Additionally, there are minimum site areas of 7,000 square feet in the B-1 and B-2 districts but no
minimum site area in the B-4 zoning district. We compared Land Sale 2 to the remaining
comparables, and there is no market data suggesting that any of the three zoning districts command
higher or lower prices solely due to differences between these three zoning districts. Based upon
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 49
this comparison and our opinions of the highest and best for the subject and comparables, the
comparables are identified as Equal = compared to the subject in this category.
Site Improvements: The subject property includes asphalt paving which will require demolition if
this property is developed as the determined highest and best use. Land Sales 1 and 4 include
relatively similar improvements which would include relatively similar demolition costs which
would be the responsibility of the purchasers of these sales. For these reasons, Land Sales 1 and 4
are identified as Equal = compared to the subject in this category. A dollar amount adjustment was
made for the contributory value of the improvements associated with Land Sale 2. For this reason,
this sale reflects the adjusted price of this site with no improvements. Land Sale 3 did not include
site improvements. Land Sales 2 and 3 do not require demolition of improvements and are
identified as Superior – compared to the subject in this category.
Atypical Easements: The subject property and Land Sales 1, 2, and 4 do not include atypical
easements. These comparables are identified as Equal = compared to the subject in this category.
Land Sale 3 includes an easement for a shared parking area that accommodates 20 parking spaces.
This easement is not considered typical for similar properties. Land Sale 3 is identified as Inferior
+ compared to the subject property in this category.
Utilities: The subject property and all of the comparables have similar access to electricity,
telephone service, municipal water, and municipal sewer. The comparables are identified as Equal
= compared to the subject in this category.
Size/Square Feet: The subject property totals 17,500 square feet. The comparables bracket the
subject site in size. Smaller but otherwise similar commercial sites typically command higher
prices per square foot compared to larger sites. Conversely, larger but otherwise similar
commercial sites typically command lower prices per square foot compared to smaller sites. Land
Sales 1, 2, and 3 are similar enough in size compared to the subject that these comparables are
identified as Equal = compared to the subject in this category. Land Sale 3 is approximately 2.6
times larger than the subject site. This sale is identified as Inferior + + compared to the subject in
this category.
Reconciliation of Sales Comparison Approach for Subject Property
The “as is” value for the subject property is concluded in this report. As noted, the subject property
includes asphalt paving that would require demolition for development of the property as the
determined highest and best use. The comparables either include similar site improvements that
would require demolition or adjustments were made to reflect the absence of similar site
improvements requiring demolition. For this reason, the value concluded in this report includes
consideration for the subject site improvements and no demolition cost estimates were necessary
for the subject property.
No weight is accorded the adjusted indications from Land Sales 2 and 3. The adjusted indications
from these sales are inferior or very far inferior compared to the subject. These sales establish the
lower limits of possible values for the subject property. All weight is accorded the adjusted
indications from Land Sales 1 and 4 as these indications are identified as Equal = compared to the
subject. The value indication from these comparables are $15.14 per square foot and $15.53 per
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 50
square foot, respectively. Approximately equal weight is accorded these indications. The average
of these indications is $15.34 per square foot. A market value for the subject property in “as is”
condition of $15.50 per square foot (rounded up from the average of the adjusted indications from
Land Sales 1 and 4) is reasonable and well supported by this analysis. The calculations are below;
17,500 SF @ $15.50/SF $271,250
Rounded To $270,000
As Is Value Conclusion $270,000
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 51
RECONCILIATION OF VALUE INDICATIONS
The value indications for the Fee Simple interests in the subject property are below;
Cost Approach
There are no improvements of value on the subject property. For this reason, the Cost Approach
was not applicable to the valuation of the subject property and was not developed in this report
Sales Comparison Approach
The Sales Comparison Approach was the only approach developed to determine the “as is” value
for the subject property. Sufficient comparable sales were located to prepare a credible Sales
Comparison Approach and this approach is accorded all weight.
Income Approach
The Income Approach was not applicable to the valuation of the subject property as the
improvements are not considered to contribute value to the property. For this reason, this approach
was no developed in this report.
Conclusion
All weight is accorded the value indication from Sales Comparison Approach for determination of
the “as is” value for the subject property. After careful analysis, our conclusion for the market value
for the fee simple interest in the subject property, in “as is” condition, as of November 4, 2020, is;
$270,000
As Is
Cost Approach Not Developed
Sales Comparison Approach $270,000
Income Approach Not Developed
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 52
QUALIFICATIONS OF THE APPRAISERS
ELLIOTT (ELLIE) M. CLARK, MAI
PROFESSIONAL DESIGNATIONS
MAI Designated Member of the Appraisal Institute (2004)
FORMAL EDUCATION
College of Charleston, Charleston, SC - Bachelor of Science – Geology (1985)
REAL ESTATE EDUCATION
Appraisal Institute
1990 - Basic Valuation Procedures
1990 - Real Estate Principles
1992 - Capitalization Theory and Technique
1994 - Advanced Income Capitalization
2001 - Highest and Best Use and Market Analysis
2001 - Advanced Sales Comparison and Cost Approaches
2002 - Standards of Professional Practice, Part A
2002 - Standards of Professional Practice, Part B
2002 - Report Writing and Valuation Analysis
2002 - Advanced Applications
2003 - Comprehensive Exam
2003 - Separating Real & Personal Property from Intangible Business Assets
2004 - Demonstration Appraisal
2006 - 7 Hour National USPAP Update Course
2006 - Business Practices and Ethics
2006 – Uniform Appraisal Standards for Federal Land Acquisitions
2008 - 7 Hour National USPAP Update Course
2010 - 7 Hour National USPAP Update Course
2012 – 7 Hour National USPAP Update Course
2012 – Fundamentals of Separating Real Property, Personal Property and Intangible Business Assets
2012 – Valuation of Conservation Easements
2014 – 7 Hour National USPAP Update Course
2015 – Real Estate Finance Statistics and Valuation Modeling
2016 – 7 Hour National USPAP Update Course
2016 – Eminent Domain & Condemnation
2017 – Uniform Appraisal Standards for Federal Land Acquisitions: Practical Applications
2018 – 7 Hour National USPAP Update Course
2019 – 7 Hour National USPAP Update Course
2019 – Business Practice & Ethics
2020 – Small Hotel/Motel Valuation
2020 – Appraisal of Medical Office Buildings
Institute of Financial Education
1985 - Real Estate Law I
1986 - Real Estate Law II
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 53
IAAO
1991 - Standards of Practice and Professional Ethics
Citadel Evening College
1993 - Residential Appraisal Reports Using URAR Form
William H. Sharp & Associates
1995 - The Home Inspection
Trident Technical College
1997 - Uniform Standards of Appraisal
Historic Preservation Consulting
1998 - Appraising Historic Property
The Beckman Company
2004 - The Technical Inspection of Real Estate
APPRAISAL SEMINARS ATTENDED
2000 – JT&T Seminars: Financial Calculator HP-12C
2000 – Appraisal Institute: Highest and Best Use Applications
2004 – Appraisal Institute: Evaluating Commercial Construction
2005 – Appraisal Institute: Scope of Work: Expanding Your Range of Services
2006 – Appraisal Institute: Subdivision Valuation
2006 – Appraisal Institute: Appraising from Blueprints and Specifications
2007 – Appraisal Institute: Analyzing Commercial Lease Clauses
2007 – Appraisal Institute: Condominiums, Co-ops, and PUDs
2008 – Appraisal Institute: Spotlight on USPAP
2008 – Appraisal Institute: Quality Assurance in Residential Appraisals: Risky Appraisals = Risky Loans
2008 – Appraisal Institute: Office Building Valuation: A Contemporary Perspective
2009 – Appraisal Institute: Appraisal Curriculum Overview (2-Day General)
2010 – Appraisal Institute: Hotel Appraising – New Techniques for Today’s Uncertain Times
2010 – Appraisal Institute: The Discounted Cash Flow Model: Concepts, Issues & Applications
2011 – Appraisal Institute: Understanding & Using Investor Surveys Effectively
2011 – Appraisal Institute: Advanced Spreadsheet Modeling for Valuation Applications
2012 – Appraisal Institute: Appraising the Appraisal: Appraisal Review-General
2013 – Appraisal Institute: Business Practices and Ethics
2018 – Appraisal Institute: Real Estate Finance, Value, and Investment Performance
2019 – Appraisal Institute: The Cost Approach: Unnecessary of Vital to a Healthy Practice
WORK EXPERIENCE
2003 - Present Clark Real Estate Appraisal – Owner/Commercial Real Estate Appraiser
1995 - 2003 Sass, Herrin & Associates, Inc. – Commercial Real Estate Appraiser
1990 - 1995 Charleston County Assessor’s Office – Sr. Staff Real Estate Appraiser
1986 - 1989 First Sun Capital Corporation - Mortgage Loan Officer
1985 - 1986 First National Bank of Atlanta - Mortgage Loan Processor
1984 - 1985 South Carolina Federal Savings Bank - Mortgage Loan Processor
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 54
STATE LICENSES/CERTIFICATIONS
Montana State Certified General Real Estate Appraiser - REA-RAG-LIC-683
PARTIAL LIST OF CLIENTS
United States Department of Interior
United States Government Services Administration
State of Montana Department of Natural Resources
Montana Department of Transportation
City of Whitefish
City of Kalispell
Flathead County
Glacier Bank
Rocky Mountain Bank
Freedom Bank
Whitefish Credit Union
Parkside Credit Union
First Interstate Bank
Three Rivers Bank
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 55
CHRISTOPHER D. CLARK
FORMAL EDUCATION
Millikin University, Decatur, Illinois
Bachelor of Arts in Political Science
REAL ESTATE EDUCATION
Appraisal Institute
Course 110 – Appraisal Principles, 2005
Course 120 – Appraisal Procedures, 2005
Course 410 – 15- Hour National USPAP Course, 2005
Course 203R – Residential Report Writing & Case Studies, 2006
Course REA070513 – Analyzing Commercial Lease Clauses, 2007
Course 06RE0638 – Condominiums, Co-ops, PUD’s, 2007
Course REA071154 –Hypothetical Conditions, Extraordinary Assumptions, 2008
Course 07RE0734 – 7-Hour National USPAP Update, 2008
Course 06RE0641 – Quality Assurance in Residential Appraisals, 2008
Course 06RE1286 – Office Building Valuation: A Contemporary Perspective, 2008
Course 430ADM 0 Appraisal Curriculum Overview – 2009
Course I400 - 7-Hour National USPAP Update – 2010
Course OL-202R - Online Residential Sales Comparison and Income Approach – 2011
Course OL-200R - Online Residential Market Analysis and Highest & Best Use – 2011
Course OL-201R - Online Residential Site Valuation & Cost Approach – 2011
Course I400 – 7-Hour National USPAP Update Course – 2012
Course REA110436 – Appraising the Appraisal: Appraisal Review General – 2012
Course 08REO643 – Business Practices and Ethics -2013
Course I400 – 7-Hour National USPAP Update – 2014
Course REA4380 – Online Introduction to Green Buildings: Principles and Concepts
Course REA120108 – Online Cool Tools: New Technology for Real Estate Appraisers
Course REA6260 – Real Estate Finance Statistics & Valuation Modeling 2015
Course REA-REC-REC-7415 – 2016-2017 7-Hour USPAP Update – 2016
Course REA-CEC-REC-7494 – Eminent Domain and Condemnation - 2016
WORK EXPERIENCE
2005 - Present Clark Real Estate Appraisal, Inc. – Real Estate Appraiser
2003 - 2005 IKON Office Solutions – Technology Marketing
2002 - 2003 Relational Technology Services – Technology Marketing
1998 - 2003 IKON Office Solutions – Technology Marketing
1988 – 1998 CMS Automation (Formerly Entré Computer Center) – Technology Marketing
STATE LICENSES/CERTIFICATIONS
Montana Licensed Appraiser # REA-RAL-LIC-841
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 56
APPRAISERS LICENSES
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 57
ADDENDUM
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 58
NATIONAL ECONOMIC DATA
According to the advance estimate from the Bureau of Economic Analysis of the US Department
of Commerce (BEA), real GDP decreased by 32.9% in the second quarter of 2020 after decreasing
5.0% in the first quarter of 2020. According to the BEA, “the decline in the second quarter GDP
reflected the response to
COVID-19, as “stay at
home” orders issued in
March and April were
partially lifted in some
areas of the country in
May and June, and
government pandemic
assistance payments were
distributed to household
and businesses This led to
rapid shifts in activity, as
businesses and schools continued remote work and consumers and businesses cancelled, restricted,
or redirected their spending. The full economic effects of the COVID-10 pandemic cannot be
quantified in the GDP estimate for the second quarter of 2020 because the impacts are generally
embedded in source data and cannot be separately identified.”
The National Bureau of Economic Research (also known as NBER - a private research group
led by the nation’s top economists and long been considered the official arbiter of sorts for
determining when business cycles start and end) announced June 8, 2020 that the United
States had been in a recession since February 2020. A recession is typically defined as two
straight quarters of negative GDP, but the NBER has leeway to take into account the depth
of a contraction, how quickly it occurs and how much of the economy is affected.
STATE ECONOMIC DATA
Montana is the 44th most populous state in the US. As of 2010, US Census data estimated a
population of 989,415 indicating a growth in population of 9.7% from 2000 to 2010. According to
ESRI estimates using US Census data, the 2020 population of Montana was estimated to be
1,096,002. This estimate shows a 10.8% increase since the 2010 census. The state economy is
diverse with a wide variety of industries. The top five employment categories in the state are;
Trade, Transportation, and Utilities
Government (Federal, State, & Local)
Education & Health Services
Healthcare & Social Assistance
Leisure & Hospitality
These industries employ from 11% to 16% of the workforce in Montana per category. The
remaining categories employ less than 10% each.
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 59
According to ESRI, as of 2020 the median household income was estimated at $54,754 and is
projected to increase to $58,261 (an increase of about 10.1%) by 2025. This compares to the United
States, which has an estimated median household income of $62,203 as of 2020 and is projected
to increase to $67,325 (an increase of about 8.2%) by 2025.
The following tables summarize unemployment rates in Montana over the past 10 years.
The annual average unemployment rate decreased every year since 2010. However, likely due in
large part to the coronavirus pandemic (which began in March 2020), the unemployment rate in
Montana spiked to 11.9% in April. This rate has trended down over the past several months to the
rate of 4.6% as of September 2020.
Labor Unemployment
Year Month Force Employment Unemployment Rate
2010 Annual Average 500,525 463,998 36,527 7.3%
2011 Annual Average 501,225 466,403 34,822 6.9%
2012 Annual Average 506,485 476,174 30,311 6.0%
2013 Annual Average 510,781 483,071 27,710 5.4%
2014 Annual Average 512,245 488,336 23,909 4.7%
2015 Annual Average 517,656 496,042 21,614 4.2%
2016 Annual Average 522,497 500,830 21,667 4.1%
2017 Annual Average 525,575 504,871 20,704 3.9%
2018 Annual Average 528,834 509,568 19,266 3.6%
2019 Annual Average 533,497 514,917 18,580 3.5%
2020 Y-T-D Average (through September)533,924 500,644 33,281 6.3%
2020 September 533,615 508,948 24,667 4.6%
Average 5.1%
Source: United States Department of Labor, Bureau of Labor Statistics
State of Montana
Labor Unemployment
Year Month Force Employment Unemployment Rate
2020 January 534,089 510,463 23,626 4.4%
2020 February 535,223 512,749 22,474 4.2%
2020 March 535,146 512,504 22,642 4.2%
2020 April 518,037 456,449 61,588 11.9%
2020 May 523,912 479,325 44,587 8.5%
2020 June 541,884 503,665 38,219 7.1%
2020 July 543,757 510,883 32,874 6.0%
2020 August 539,657 510,808 28,849 5.3%
2020 September 533,615 508,948 24,667 4.6%
Source: United States Department of Labor, Bureau of Labor Statistics
State of Montana - 2020 YTD Data
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 60
COVID-19 Update for State of Montana
The University of Montana Bureau of Economic Research prepared a study titled “The Impacts of
COVID-19 in Montana, Preliminary Analysis” in April of 2020. The principal findings from the
study are shown as follows;
Job losses in the state of 7.3% are forecasted for calendar year 2020; however, some
improvement is forecasted for the fourth quarter.
Personal income will be $3.9 billon lower in Montana than was projected by the Bureau in
December of 2019.
Job losses will be seen all over Montana; however, job loses will be particularly severe for
northwest regions of the state.
The Bureau forecasts stronger economic growth in 2021 and 2022.
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 61
FLATHEAD COUNTY DATA
The subject is located in the in the city limits of Kalispell and in Flathead County, Montana. The
general area is known as the Flathead Valley. The Flathead Valley is surrounded by various ranges
of the Rocky Mountains. The three incorporated cities in Flathead County are Kalispell, the county
seat, Whitefish, and Columbia Falls. There are also several unincorporated communities in the
county which include; Kila, Marion, Evergreen, Bigfork, Lakeside, Somers, Hungry Horse, and
Martin City.
Map Depicting the Three Municipalities in Flathead County
Subject Property
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 62
Geographical Information
Flathead County is located in northwest Montana and is 5,098 square miles in size. Flathead Lake
is a significant geographical feature of the Flathead Valley. Glacier National Park is located in the
Flathead Valley area and is a major area tourist attraction. Additional attractions include; Bob
Marshall Wilderness, Hungry Horse Dam, Whitefish Mountain Resort, Blacktail Mountain Resort,
Whitefish Lake, numerous golf courses, and many area lakes and rivers that provide year-round
recreation for residents and visitors.
Population
According to 2020 ESRI estimates based upon US Census data, the population of Flathead County
was 106,689. The population is forecasted to increase to 114,954 by 2025, or by approximately
1.50% per year.
Employment
The retail trade industry represents approximately 15% of employment in Flathead County.
Approximately 13% of the workforce is employed in the accommodation and food services
industries and the healthcare and social assistance industries represents 12% of employment in
Flathead County. Some of the largest private employers in Flathead County include; Kalispell
Regional Healthcare, Winter Sports, Inc., North Valley Hospital, Century Link, National Flood
Insurance, Walmart, Super 1 Foods, Weyerhaeuser, Teletech, Allied Materials, and BNSF
Railway.
Income
The median annual household income for Flathead County was estimated to be $53,949 in 2020
based upon ESRI forecasts using US Census data. According to ESRI forecasts, the median annual
household income is to increase by approximately 1.19% per year through 2025.
Unemployment
Unemployment fluctuations for the county since 1990 are included in the following graph.
The US recessions are noted in gray. Flathead County was labeled as the “epicenter” of the
recession for the state of Montana by statewide economists for the most recent prior recession. As
previously noted, a recession was identified for the United States as of February 2020.
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 63
The following tables summarize unemployment rates in Flathead County over the past 10 years.
The annual average unemployment rate has decreased every year since 2010. However, likely due
in large part to the coronavirus pandemic (which began in March 2020), the unemployment rate in
Montana spiked to 16.6% in April. This rate has trended down over the past several months to the
rate of 5.5% as of September 2020.
Construction & Development
Historical data for building permits issued for single family residences of all types in the three
municipalities of Flathead County is shown in the following table.
Labor Unemployment
Year Month Force Employment Unemployment Rate
2010 Annual Average 43,786 38,512 5,274 12.0%
2011 Annual Average 43,591 38,821 4,770 10.9%
2012 Annual Average 43,332 39,419 3,913 9.0%
2013 Annual Average 43,843 40,469 3,374 7.7%
2014 Annual Average 43,747 40,921 2,826 6.5%
2015 Annual Average 44,823 42,257 2,566 5.7%
2016 Annual Average 46,004 43,436 2,568 5.6%
2017 Annual Average 46,813 44,406 2,407 5.1%
2018 Annual Average 47,769 45,514 2,255 4.7%
2019 Annual Average 47,892 45,646 2,246 4.7%
2020 YTD Average (through September)48,870 44,781 4,089 8.4%
2020 September 48,493 45,825 2,668 5.5%
Average 7.3%
Source: United States Department of Labor, Bureau of Labor Statistics
Flathead County
Labor Unemployment
Year Month Force Employment Unemployment Rate
2020 January 47,869 44,736 3,133 6.5%
2020 February 47,768 44,807 2,961 6.2%
2020 March 48,195 45,236 2,959 6.1%
2020 April 47,788 39,852 7,936 16.6%
2020 May 48,287 42,531 5,756 11.9%
2020 June 50,438 45,788 4,650 9.2%
2020 July 50,971 47,368 3,603 7.1%
2020 August 50,019 46,882 3,137 6.3%
2020 September 48,493 45,825 2,668 5.5%
Source: United States Department of Labor, Bureau of Labor Statistics
Flathead County - 2020 YTD Data
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 64
The 15-year high for residential single-family permits in the three municipalities is 510 permits
issued in 2005. Thousands of new residential subdivision lots were created in Flathead County
(incorporated and unincorporated areas) during the early and mid-2000’s. Supply exceeded
demand for the years immediately following the national recession. According to research by Clark
Real Estate Appraisal, supply and demand has moved closer to a balanced level in the
municipalities in Flathead County over the past 7 years.
Healthcare
There are two primary hospitals located in the Flathead Valley. Kalispell Regional Medical Center
is a 174-bed hospital located on the medical campus in Kalispell. North Valley Hospital is a 31-
bed hospital located in Whitefish.
Tourism
Glacier National Park is a significant draw in Flathead County with 1.8 to over 2.9 million visitors
each year over the last 10 years. There are many area recreational opportunities that draw resident
and nonresident travelers. These include natural amenities such as the numerous lakes, rivers and
mountain ranges and manmade amenities such as ski and mountain biking areas.
Linkages & Transportation
The three incorporated cities in Flathead County are within an easy commute of each other and are
connected by US or state highways. US Highway 93 is considered the most significant corridor in
the Flathead Valley. The intersection of US Highway 93 and Reserve, just north of Kalispell, has
become the commercial hub for the valley. There are three significant shopping centers in this area
as well as two automobile dealerships, a high school, and a number of governmental offices.
Whitefish and Columbia Falls are connected by Montana Highway 40. There was some
commercial development along Montana Highway 40 prior to the most recent national recession;
however, there has been little new construction along this highway in recent years.
Columbia Falls and Kalispell are connected by US Highway 2. This corridor includes Glacier Park
International Airport. Other commercial improvements along US Highway 2 between Columbia
Falls and Kalispell are predominantly light industrial in nature.
The Canadian border is within a one to two-hour drive from most portions of Flathead County.
There is a port of entry just north of Flathead County in Eureka, Montana and another border
crossing at the line dividing Glacier National Park of the United States and Waterton National Park
of Canada.
City 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 % Change:
2018-2019
Kalispell 378 349 322 186 103 92 72 98 124 98 72 104 115 91 94 3%
Whitefish 80 60 22 26 14 23 36 51 75 72 48 49 57 64 95 48%
Columbia Falls 52 38 25 12 5 5 1 4 9 20 17 15 10 19 14 -26%
Total 510 447 369 224 122 120 109 153 208 190 137 168 182 174 203 17%
Single Family Building Permits Issued Per Year
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 65
Glacier Park International Airport is serviced by Delta/Skywest Airlines, Allegiant Air, Horizon
Air/Alaska Airlines and United Airlines. There is a train depot in Whitefish that is a stop for
Amtrak. The Burlington Northern Santa Fe Railroad freight trains run through Whitefish,
Columbia Falls and Kalispell.
City and Communities
The larger cities and communities in Flathead County are summarized on the table below;
County Economic Data Conclusion
Attractions such as Glacier National Park, Flathead Lake, and Whitefish Mountain Ski Resort will
continue to be a draw for second home buyers, nonresident travelers, and Montana residents to the
Flathead Valley. The short and long-term outlooks for the area are positive due to the abundance
of natural resources and the potential for a diverse economic base.
According to the Bureau of Business and Economic Research at the University of Montana,
economic impacts on Northwest Montana due to COVID-19 have been forecasted to be
significant.
2000 Census2010 Census
Kalispell 14,223 19,927 40.1%County Seat. Regional Business Center including Medical Center, Retail Hub & Community
College. Centrally located with convenient access to many recreational opportunities.
Columbia Falls 3,645 4,688 28.6%Gateway to Glacier National Park. Located along Flathead River. Historically industrial in
nature. Meadow Lake Resort is located in Columbia Falls.
Whitefish 5,032 6,357 26.3%Resort community located near Whitefish Lake, Whitefish River and Whitefish Mountain Ski
Resort. Population increases in summer due to numerous vacation and second home owners.
Evergreen 6,215 7,616 22.5%Unincorporated area adjacent to the city limits of Kalispell. Area consists of residential, retail
and light industrial type properties.
Somers and
Lakeside Area 2,235 3,778 69.0%Communities located along Flathead Lake primarily bedroom communities for Kalispell.
Population increases in summer months due to numerous vacation and second home owners.
Bigfork Area 1,421 4,270 200.5%
Resort community located along Flathead Lake featuring numerous restaurants, specialty
shops, art galleries and a theater. There is an 18 hole championship golf course in this area.
Main economic base is tourism.
Population
FLATHEAD COUNTY - CITIES AND COMMUNITIES
Market Overview% Change
2000 - 2010
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 66
CITY OF KALISPELL DATA
The subject property is located in the central business of the city of Kalispell. The city of Kalispell
is the county seat for Flathead County, and it is the major economic and business center for the
area. Services available in Kalispell include; schools, employment, retail stores, places of worship,
a thriving medical center, and an expanding community college.
Population & Income
According to ESRI data, the 2020 population
in the city of Kalispell was estimated to be
22,741. The population is forecasted to
increase to 24,153 by 2025. This represents a
forecasted increase of approximately 1.21%
per year. The median household income was
estimated to be $45,257 in 2020. This is lower
than the estimated 2020 median household
income for Flathead County of $53,949, and
for the state of Montana of $54,754.
Employment
The categories of Services and Retail Trade make up approximately 67% of the job market. Other
significant employment categories in Kalispell include Finance & Insurance, Real Estate at 8%
and Construction at 7.8%. The remaining sectors comprise less than 5% per category.
Linkages &Transportation
US Highway 93 runs north to south through the city of Kalispell and is labeled as the “Main Street”
of the central business district. US Highway 93 provides access to Flathead Lake to the south of
Kalispell and Whitefish to the north of Kalispell. There is a By-pass for US Highway 93 that is
west of the city that was completed in 2016. US Highway 2 is an east to west arterial road through
Kalispell and provides access to Columbia Falls and Glacier National Park. There is public
transportation in Kalispell. There is a municipal airport in Kalispell which can accommodate small
airplanes.
Commercial Real Estate
Properties improved with medical and/or general offices and retail spaces are located throughout
the Kalispell area. Most of the growth in the past few years has been concentrated in the area north
of Kalispell on US Highway 93 at Reserve Drive. This area has become the retail hub for the
greater Flathead Valley area with the development of 3 neighborhood shopping centers.
Additionally, the expansion of US Highway 93 to 4 lanes on the southern portion of Kalispell
helped spur commercial development in that area over the past decade years. A two-lane bypass
of US Highway 93 was completed in 2016. The by-pass has shortened travel times and alleviated
large truck traffic in the central business district of Kalispell.
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 67
The City of Kalispell issued an average of approximately 7 new permits per year for commercial
new construction between 2015 and 2019. The number of new commercial construction permits
issued each year from 2010 through 2019 in Kalispell is included on the table below;
Source: City of Kalispell Building Department
There were 8 permits issued for construction of new commercial, office, or industrial buildings
during 2019. This is greater than the average between 2015-2019. There were no permits issued in
2019 for construction of new public or quasi-public buildings.
The following chart depicts sales volume and median price per property for improved commercial
sales for the past 10 years in Kalispell;
The most recent peak in sales volume for improved commercial occurred in 2017, followed by a
declines in demand in 2018 and 2019. The average annual sales price peak for the period occurred
in 2019. It is important to note that the price peak occurred in a year with declining demand
compared to the prior year.
0
2
4
6
8
10
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Nu
m
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P
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Year
Annual Building Permits Issued for New Commercial Structures in Kalispell
New Commercial, Office, or Industrial Buildings New Public or Quasi Public Buildings
Source: Montana Regional
MLS Market Trend Reports for
Municipality Statistics
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 68
Residential Real Estate
New residential lots and acres in new subdivisions for the City of Kalispell between 1999 and 2019
are on the following table;
There was a total of 412 new lots were created in Kalispell between 2010 and 2019.
The following table depicts the annual number of new single-family residential construction
permits issued in the city of Kalispell between 2005 and 2019.
Source: City of Kalispell
This data indicates that construction of single-family residential properties in Kalispell decreased
each year between 2005 and 2011. Since 2012, the number of permits has generally fluctuated
between about 72–124 each year with an average of approximately 100 building permits issued
per year for new single family residences.
0
50
100
150
200
250
300
350
400
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Nu
m
b
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o
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P
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r
m
i
t
s
I
s
s
u
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Year
Number of New Single Family Residential Building Permits Issued Per Year in Kalispell
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 69
The chart below depicts sales volume and median price per property for improved residential sales
for the past 10 years in the municipal areas of Kalispell;
The volume of home sales in 2019 represents the peak for the period. Peak pricing also occurred
for the period in 2019.
Conclusion
General market conditions for commercial properties in the Kalispell area are considered stable.
The residential market sector has continued to grow in volume and pricing. Sales volume and
pricing increased for improved residential properties in Kalispell from 2010 through 2019. Supply
and Demand for residential and commercial properties in the greater Kalispell area are in relative
balance. List prices for commercial properties far exceed historical sales prices, which could result
in a lower number of commercial sales in the coming year. However, building permits issued for
general commercial new construction have been relatively stable for the past several years. In spite
of high list prices in the commercial sector, future growth and expansion for the greater Kalispell
area is considered likely in the long term due to forecasted population growth.
According to the Bureau of Business and Economic Research at the University of Montana,
economic impacts on Northwest Montana County due to COVID-19 have been forecasted to
be significant.
Clark Real Estate Appraisal (20-073ec) (11/04/2020) 70
Kalispell Area Map
Subject Property
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PROFESSIONAL SERVICES AGREEMENT & SCOPE OF WORK
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MOST RECENTLY RECORDED DEED
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HISTORICAL CHANGES IN CPI-U
Source: US Department of Labor, Bureau of Labor Statistics
Area:
Item:
Base Period:
Years:
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual
2010 1.6%1.3%1.1%0.9%0.9%0.9%0.9%0.9%0.8%0.6%0.8%0.8%1.0%
2011 1.0%1.1%1.2%1.3%1.5%1.6%1.8%2.0%2.0%2.1%2.2%2.2%1.7%
2012 2.3%2.2%2.3%2.3%2.3%2.2%2.1%1.9%2.0%2.0%1.9%1.9%2.1%
2013 1.9%2.0%1.9%1.7%1.7%1.6%1.7%1.8%1.7%1.7%1.7%1.7%1.8%
2014 1.6%1.6%1.7%1.8%2.0%1.9%1.9%1.7%1.7%1.8%1.7%1.6%1.7%
2015 1.6%1.7%1.8%1.8%1.7%1.8%1.8%1.8%1.9%1.9%2.0%2.1%1.8%
2016 2.2%2.3%2.2%2.1%2.2%2.2%2.2%2.3%2.2%2.1%2.1%2.2%2.2%
2017 2.3%2.2%2.0%1.9%1.7%1.7%1.7%1.7%1.7%1.8%1.7%1.8%1.8%
2018 1.8%1.8%2.1%2.1%2.2%2.3%2.4%2.2%2.2%2.1%2.2%2.2%2.1%
2019 2.2%2.1%2.0%2.1%2.0%2.1%2.2%2.4%2.4%2.3%2.3%2.3%2.2%
2020 2.3%2.4%2.1%1.4%1.2%1.2%1.6%1.7%1.7%
Average Annual Change (through 2019):1.8%
U.S. city average
All items less food and energy
1982-84=100
2010 through YTD 2020
Consumer Price Index - All Urban Consumers
12-Month Percentage Change
Not Seasonally Adjusted