Loading...
Review of Appraisal for Gateway CinemaTo: Jane Howington and Charlie Harball From: Wade Elder Date: 01 /04/12 Re: Review of appraisal for Gateway Cinema Theatre property located at 1275 US Highway 2 West, Kalispell, MT. Jane and Charlie; As requested I have reviewed the appraisal completed by Elliot M. Clark dated 12/19/11 and am summarizing the information in the summary appraisal report as follows: Property: This is a 3.126 acre (136,169 Square Feet) site (irregular in shape) with a vacant movie theatre (22,988 Square Feet) parking lot with 139 parking spaces. The property is located at 1275 US Highway 2 West, Kalispell, MT. • The property is located in an area of significant flood hazard and likely allowable uses are relatively limited. • The property was listed for sale from 11/10/08—11/07/10 for $1,500,000. When the property was listed it was identified that the seller may place a deed restriction on the property prohibiting use of the building as a movie theatre. • There is an easement agreement for parking that the property owner has access to an additional 250 parking spaces along the mall site. The property owner must pay a 16.6% share of annual parking lot maintenance for the mall property. • The building is not considered to contribute value to the property and would most likely be demolished. • Using the Marshall Valuation Service as a source the estimated demo costs are $103,000. • The appraiser has arrived at 2 opinions of value based on the following: o Scenario 1: Hypothetical Condition; that the property is not in the Floodway or Flood Plain. o Scenario 2: The property is in "as is" condition meaning in the Floodway and Flood Plain. Scenario 1: Hypothetical Condition; the property is not in the Floodway or Flood Plain. • $510.000.00 Sales Comparison Approach (136,169 Sq. Ft. @ $4.50 / Sq. Ft.) less building demo costs. • The appraiser did not use the Cost or Income Approach as the building is an older facility and adds little value to the property. ® FINAL VALUE: $510.000.00. Scenario 2: The property as is being in the Floodway and Flood Plain. ® $205,000.00 Sales Comparison Approach; (136,169 Square Feet X $2.25 / Sq. Ft.) less demo expenses. ® $ 10,000.00 Income Approach of Value — 255 spaces @ $13 / space, less expenses & less the cost to put in 116 additional parking spaces ($1,000 / space) with a 10% CAP Rate. ® The appraiser did not use the Cost Approach as the parking or improvements do not contribute to the value of the property. ® FINAL VALUE: $205,000.00 The comps seem reasonable that are used in the appraisal. Some are dated going back to 2005 however the appraiser has made reasonable adjustments for the time frame. Other Notes: ® The Department of Revenue indicates the 2011 Tax Year value of the land ($756,565) & building ($241,180) value at $997,745. ® $19,970.23 2011 Real Estate Tax Bill ® $37,230.10 2010 Real Estate Tax Bill ® As an interesting side note the new Cinema has a 2011 Tax Year Value of $9,737,667 with the 2011 Real Estate Tax Bill being $137,170.68.