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CRA Projects and Purchases June 19, 2007 Commissioners: The Boynton Beach Community Redevelopment Agency (CRA) serves the community by guiding redevelopment activities that create a vibrant downtown core and revitalized neighborhoods within the Agency's District, comprised of 1,650 acres along the eastern edge of the City of Boynton Beach. In order to ensure redevelopment activity within it's District, the CRA follows a process where an annual budget is approved, professional CRA staff meets with members of the development, retail and residential community, and then presents these ideas, projects or proposals to the CRA Board for consideration. This process, to some extent, mirrors that of City staff and how they interact with their City Commission. Attached, please find a comprehensive packet of information and documentation on key CRA projects and purchases that have recendy come under question by the Boynton Beach City Commission, i.e. purchase of 211 Ocean Avenue and purchase of Ocean Breeze Parcel (7.83 acres). Also included are copies of the CRA's FY06-07 Board approved Annual Budget and Annual Audit Year Ended September 30, 2006, which was accepted in April of this year. On behalf of the CRA board and staff, we look forward to continuing our important work in the redevelopment of Boynton Beach and reaching exciting new benchmarks of economic prosperity and community excellence. Sincerely, ~ C f)"t;} Lisa A. Bright CRA Executive Director Boynton Beach Community Redevelopment Agency 915 South Federal Highway Boynton Beach, FL 33435 Office: 561-737-3256 Fax: 561-737-3258 Boynton Beach Community Redevelopment Agency MEMO Date: June 18, 2007 To: CRA Board, City Commission, City Manager, City Clerk From: Lisa Bright, Executive Director $ Re: Code of Ethics Due to the questions raised by the CRA's purchase of land from former CRA Board Chair Larry Finkelstein, a timeline is provided below: 2004 Larry Finkelstein resigns as CRA Board Chair. 10/2005 Larry Finkelstein purchased the company known as Boynton Associates, Ltd. 5/17/07 CRA closed on Ocean Breeze property. Enclosed are copies of the City of Boynton Beach Code of Ethics Ordinance which was passed on 11/21/06. Also a March 15, 2007 memo from the CRA counsel, Lewis, Longman & Walker, P.A. on the subject of Conflicts of Interest and Code of Ethics. MEMORANDUM TO: Ken Spillias FROM: Julie Jennison DATE: March 15,2005 SUBJECT: Boynton Beach Community Redevelopment Agency - Conflict of Interest and Ex Parte Communications I. COMMUNITY REDEVELOPMENT AGENCIES AND CONFLICTS OF INTEREST UNDER THE CODE OF ETHICS FOR PUBLIC OFFICERS (PART III OF CHAPTER 112. FLORIDA STATUTES) A. Community Redevelopment Ae:encies Community Redevelopment Agencies ("CRA") are authorized by Part III of Chapter 163, Florida Statutes, and specifically created in accordance with either S 163.356 or S 163.357, F.S. CRAs are expressly made subject to the provisions of the Code of Ethics for Public Officers and Employees, Part III of Chapter 112, Florida Statutes. Section 163.367, F.S. provides: (1) The officers, commIsSIOners, and employe~s of a community redevelopment agency created by, or designated pursuant to, s. 163.356 or s. 163.357 shall be subject to the provisions and requirements of part III of chapter 112. (2) If any such official, commIssIoner, or employee presently owns or controls, or owned or controlled within the preceding 2 years, any interest, direct or indirect, in any property which he or she knows is included or planned to be included in a community redevelopment area, he or she shall immediately disclose this fact in the manner provided in part III of chapter 112. Any disclosure required to be made by this section shall be made prior to taking any official action pursuant to this section. (3) No commissioner or other officer of any community redevelopment agency, board, or commission exercising powers pursuant to this part shall hold any other public office under the county or municipality other than his or her commissionership or office with respect to such community redevelopment agency, board, or commission. (Emphasis added.) " B. Code of Ethics for Public Officers There are three provisions in the Code of Ethics that may cause concern or apply to members of the Boynton Beach CRA. First, the Code provides specific guidance on potential voting conflicts. Second, it prohibits certain employment or contractual relationships. And, third, it contains a general prohibition against corruptly using an official position for private gain. It should be noted, that Commission on Ethics opinions are very fact specific. The result may vary depending on what type of profession is being asked about (ie. lawyer, architect, engineer, realtor, general businessperson). There ar~ no "blanket" exemptions in the Code of Ethics related to CRAs. 1. Voting Conflicts The Code of Ethics contains two different provisions regarding voting conflicts. First, state officers are not prohibited from voting, but must announce any conflict. Second, other county, municipal, or other local public officers are prohibited from voting, and must announce the conflict and abstention. CRA members, however, are expressly not prohibited from voting on issues. "[A] commissioner of a community redevelopment agency created or designated pursuant to s. 163.356 or s. 163.357, . . . is not prohibited from voting, when voting in said capacity." SI12.3143(3)(b), F.S. The section exempting CRA members does not require any announcement of the conflict. However, a 1986 Commission on Ethics Opinion (CEO 86-13) advises that in instances of a potential conflict, CRA members should follow th~ provisions found in S 112.3143(3), Florida Statutes, which requires a public announcement at a meeting of one's agency, as well as the filing of a memorandum to be incorporated in the minutes of the meeting. They opine, that while CRA members are specifically not prohibited from voting, and therefore may vote on matters affecting their interests, they are still required to publicly announce the conflict and file a voting conflict memorandum. 2. Employment of Contractual Relationships Of more concern is the provision prohibiting certain employment or contractual relationships. In this regard, the Code of Ethics provides: No public officer. . . of an agency shall have or hold any employment or contractual relationship with any business entity or any agency which is subject to the regulation of, or is doing business with, an agency of which he or she is an officer or employee, . . . nor shall an officer . . . have or hold any employment or contractual relationship that will create a continuing or frequently recurring conflict between his or her private interests and the performance of his or her public duties that would impede the full and faithful discharge of his or her public duties. S 112.313(7)(a), F.S. rr 2 There is no exemption from this provision for members of a CRA. I This section contains two separate prohibitions. First, it prohibits employment or contractual relationship with an entity regulated by, or doing business with the CRA. Second, it prohibits those employment and/or contractual relationships that could create frequently recurring conflicts. a. Employment or Contractual Relationship Citing S 112.313(7), Florida Statutes, the Commission on Ethics has advised that a CRAs member's firm cannot participate in a CRA grant program, holding that this would create a prohibited conflict of interest (CEO 98-3). In CEO 98-3, a eRA board member was a partner in a partnership that owned an office building. The partnership desired to apply to the CRA to participate in its subsidized loan program. The Commission opined, that this constituted a contractual relationship with a business entity that is doing business with the CRA, and was therefore a prohibited relationship. These types of relationships are strictly prohibited, there can be no abstention or announcement of such a conflict, it simply violates the Code of Ethics. This subsection would seem to prohibit CRA members from having either an employment or contractual relationship with clients who may be doing business with, or is "regulated" by, the board. For example, members of an architectural review board are prohibited under this subsection from representing clients with matters before the board, as they would be holding employment or a contractual relationship with business entities (their clients) subject to the regulation of the board. CEO 04-1. Also, a city planning board member who was a registered architect was prohibited from representing clients before the planning board, because his independence and impartiality would be jeopardized, resulting in the appearance of the office being used for private gain. CEO 79-19. This prohibition extends to "assisting" another in preparing for a board meeting. In CEO 79-19, the architect was prohibited from "assisting" an attorney prepare client for appearance before the board. Referring to the subsection prohibiting conflicting employment and contractual relationships, the Code of Ethics also provides, "[t]his subsection shall not prohibit a public officer. . . from practicing in a particular profession or occupation when such practice by persons holding such public office or employment is required or permitted by law or ordinance." Sl12.313(7)(b), F.S. This provision is intended to allow those individuals who must be a member of a certain profession in order to be on a board to continue to work. Unfortunately, this exception portion of this section would not apply to a CRA since the only statutory requirements I This section applies to public officers of "an agency". "Agency" is defined as any state, regional, county, local, or municipal government entity of this state, whether executive, judicial, or legislative; any department, division:bureau, commission, authority, or political subdivision of this state. . . " ~112.312(2), F.S. 3 regarding members of CRAs related to their profession is that, "[a ]ny person may be appointed as commissioner if he or she resides or is engaged in business, which means owning a business, practicing a profession, or performing a service for compensation, or serving as an officer or director of a corporation or other business entity so engaged, within the area of operation of the agency, which shall be coterminous with the area of operation of the county or municipality, and is otherwise eligible for such appointment under this part." S163.356(3)(b), F.S. Unless the Boynton Beach CRA requires a member to belong to a specific profession, as a condition of being a member, this provision does not provide any relief from the prohibition against conflicting employment and/or contractual relationships. b. Frequently Recurring Conflict It appears that since CRA board members are not prohibited from voting, but rather must announce the conflict and file a memorandum, there would not be any concern regarding "frequently recurring conflicts". A frequently recurring conflict could arise where a board member has an employment or contractual relationship with an entity that is regulated by the board (but does not come before the board) who could gain from a general decision of the board. However, CRA board members are not prohibited from voting, and therefore, there would really be no conflict. 3. Construction of the Code of Ethics The prohibitions contained in S 112.313(7), Florida Statutes, are to be read in conjunction with the provision regarding "construction" of the code of ethics, which states: Construction. - It is not the intent of this part, nor shall it be construed, to prevent any officer or employee of a state agency or county, city, or other political subdivision of the state or any legislator or legislative employee from accepting other employment or following any pursuit which does not interfere with the full and faithful discharge by such officer, employee, legislator, or legislative employee of his duties to the state or the county, city, or other political subdivision of the state involved. This provision "softens" S 112.313(7), Florida Statutes, to a small extent. In this light, an architect who was a member of a city planning board was not prohibited from contracting with persons who only incidentally and passively were subject to the regulation of the planning board, to the same extent as all other landowners in the municipality. COE 77- 126. This means that if a person is simply regulated by the municipality there is no prohibited conflict. Only when the regulation requires appearance before the board (for example to request a permit or an exemption, or when the entity seeks to do business with the board) does it arise to the level of a prohibited conflict. However, undertaking to represent a client before a board of which one is a member necessarily interferes with the full and faithful discharge of one's public duties, ., 4 particularly where such an activity presents a continuing or frequently recurring conflict in violationofSI12.313(7)(a). COE 77-126. 4. General Prohibitions The Code of Ethics states, "[n]o public officer, . . . shall corruptly use or attempt to use his or her official position or any property or resource which may be within his or her trust, or perform his or her official duties, to secure a special privilege, benefit, or exemption for himself, herself, or others." SI12.313(6), F.S. This section prohibits only "corrupt use", which is defined to mean an act that is "done with a wrongful intent and for the purpose of obtaining, or compensating ore receiving compensation for, any benefit resulting from some act or omission of a public servant which is inconsistent with the proper performance of his or her public duties." SI12.312(9), F.S. The standard is high, and such cases occur rarely. I only mention this section because it could apply to the CRA, although I'm sure such would be highly unlikely. Additionally, all public officers are prohibited from doing business with (buying or selling anything to/from) the agency for which they are a public officer. This prohibition extends to relatives, and businesses with which they are associated II. EX PARTE COMMUNICATIONS (CHAPTER 286. FLORIDA STATUTES) Section 286.0115, Florida Statutes, authorizes a county or municipality to adopt an ordinance or resolution removing the presumption of prejudice from ex parte communications with local public officials by establishing a process to disclose such ex parte communications. This section applies to any elected or appointed public official holding a county or municipal office who recommends or takes quasi-judicial action as a member of a board or commission, but does not include state agencies or authorities. There are 4 requirements in order that ex parte communication relating to quasi-judicial action not be considered prejudicial. The following information must be made a part of the record before final action on the matter: 1) subject of the communication and the identify of the person, group, or entity with whom the communication took place; 2) any written material read; and 3) existence of the investigation, site visit, or expert opinion; and 4) disclosure of these items must be made before or during the public meeting at which a vote is taken on such matters. III. CONCLUSION A prohibited conflict of interest exists where a CRA member has an employment or contractual relationship with a business entity who seeks to come before the board in a regulatory capacity, or who seeks to do business with the board. This prohibition extends to assisting ano&er in preparing the client to go before the board. Further, this 5 prohibition cannot be cured by abstention, announcement, or filing a memorandum. A CRA member with such a conflict would have three options: 1) opt to not work for the business entity; 2) entity opt not to engage in regulated activity or business with the board; or 3) board member resign from the board. A board member is not prohibited from any employment or contractual relationship with those entities who are only incidentally and passively subject to the regulation of the CRA, meaning the entity does not choose to do business with the board, or choose to come before the board on a regulatory issue. A board member is not prohibited from voting on issues tha.t may inure to his or her special private gain or interest or that of a business associate or relative. Such a situation would exist were the board member to own stock in a company, or if his or her property were to be marginally improved by a decision of the CRA. It appears that the presumption of prejudice regarding ex parte communications can be remedied, by an ordinance or resolution of the county or municipality. The statute clearly applies to "local public officials", defined to include any elected or appointed public official holding a county or municipal office who recommends or takes quasi-judicial action as a member of a board or commission. This seems to include CRA board members. The question that remains in my mind, is whether the resolution or ordinance must come from the municipality or whether a resolution of the CRA board itself is sufficient. There are no cases construing this provision. 'r 6 II 1 ORDINANCE NO. 06- 08S- 2 3 AN ORDINANCE OF THE CITY OF BOYNTON BEACH, 4 FLORIDA AMENDING CHAPTER 2 OF THE CITY OF 5 BOYNTON BEACH CODE OF ORDINANCES, CREATING 6 ARTICLE XV, ENTITLED "VOTING BY BOARD MEMBERS", 7 PROVIDING FOR SHORT TITLE; PROVIDING FOR INTENT 8 AND PURPOSE; PROVIDING FOR APPLICABILITY; 9 PROVIDING FOR DEFINITIONS; PROVIDING FOR 10 ABSTENTION FROM VOTING BY BOARD MEMBERS WITH 11 CONFLICTS OR INTEREST; PROVIDING FOR DISCLOSURE 12 OF CONFLICTS OF INTERESTS BY BOARD MEMBERS; 13 PROVIDING FOR ENFORCEMENT; PROVIDING FOR 14 CODIFICATION; PROVIDING FOR CONFLICTS; 15 PROVIDING FOR SEVERABILITY; AND PROVIDING FOR 16 AN EFFECTIVE DATE. 17 18 WHEREAS, Florida Statutes requires that all state and local public officers comply with the 19 Code of Ethics promulgated by Chapter 112.311, et seq., Florida Statutes; and 20 WHEREAS, the Code of Ethics promulgated by the state statutes sets forth requirements for 21 local public officers' disclosure of interests and abstention from voting; and 22 WHEREAS, the City Commission ofthe City of Boynton Beach ("City") desires to impose 23 requirements above and beyond those imposed by the state statutes; and 24 WHEREAS, the City Commission has detennined that in order to strengthen the confidence 25 of the City's citizens in the integrity of the City's official bodies, and to foster confidence in the 26 ecisions ofthe City's decision-making, it would be in the best interest ofthe City to impose more 27 tringent voting and disclosure requirements on the City's board members, including the City CODING: Words in stril(e tBreHgft type are deletion from existing law; Words in underscored type are additions. Page 1 S:\C'A\Ordinances\Stricter Voting Requirements II0606.doc 14 IS 16 17 18 19 20 21 22 23. 24 25 " Commission; and 2 NOW, THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE 3 CITY OF BOYNTON BEACH, FLORIDA, THAT: 4 Section I. The foregoing "WHEREAS" clauses are hereby certified as being true and 5 correct and are incorporated herein by this reference. 6 Section 2. Chapter 2 ofthe Code of Ordinances of the City of Boynton Beach, Florida, is 7 hereby amended to create a new article, Article XV, entitled "Voting by Board Members," to read as 8 follows: 9 ARTICLE XV. VOTING BY BOARD MEMBERS. 10 11 12 13 Sec. 2-200 Short Title. This article shall be known and cited as the "City of Boynton Beach's Voting Requirements by Board Members Provision". Sec. 2-201 Intent and Purpose. It is the intent and purpose of this article to strengthen the confidence of the City's citizens in the integrity of the City's public officials by ensuring that the City's officials discharge their public duties independent oftheir personal interests. This article is further intended to ensure that City officials do not participate in any decision in which his or her decision would be influenced or materially affected by interests which would influence a reasonable person in his or her decision. Sec. 2-202 Applicability . CODING: Words in strike Ihfeagh type are deletion from existing law; Words in underscored type are additions. Page 2 S:ICAIOrdinanceslStricter Voting Requirements 110606.doc I 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 /I This subsection shalJ apply to all City Boards, including the City Commission and all City advisory boards of the City of Boynton Beach. This article is intended to supplement state law provisions governing voting and disclosure requirements of state and local government officials. Nothing in this article shall be interpreted as conflicting with Section 112.311 et seq., Florida Statutes, as it applies to the City's public officers. See. 2-203 Definitions. "Board Member" shall refer to any member of any ofthe City's boards including the City Commission. the Community Redevelopment Agency. and the City's advisory boards. "Aeent" shall mean a nerson who is authorized to act for or in the ol.ace of a princioal. "Business Associate" shall refer to anyone with whom the board member shares in a business enterprise. "Conflict" or "Conflict of Interest "shall mean any situation where the board member must balance his or her private interest with their official duties. "Do Business" or "Done Business" shall mean to participate or to have participated in the past, in the solicitation, negotiation, or execution of any business transaction as a principal or agent. "Gift" the term gift shaH have the same meaning as set forth in Florida Statute Section 112.312 and shall include anything conferred upon a board member for their gain, directly or indirectly, for their private gain, by another, for which the board member did not tender consideration, financial, in kind, or otherwise, including but not limited to, any real property, tangible or intangible personal property, services, preferential treatment, discounted rate (8), information not disclosed to the public, or forgiveness of any indebtedness. "Indirect" shall refer to the method in which a benefit is not directly conferred upon the board member. This shall include, but not be limited to, instances where the board member receives a benefit accepted by another party on the board member's behalf; the board member receives a benefit from a person whose interest may be affected by the issue CODING: Words in strike thFeagh type are deletion from existing law; Words in underscored type are additions. Page 3 S:\CAIOrdinancesISlricter Voting Requirements I lO606doc ] 2 3 4 5 6 7 8 9 10 1J ]2 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 /I on which the board member mayor will vote through a third-party; or, the board member's relative, business associate, or employee receives a benefit. "Interest" shall mean anything which may positively or negatively affect the board member's pecuniary interest, liberty, status or recognition in his or her private capacity, or his or her commitme;nt in his or her private capacity to others. "Person" shall mean a natural person, or his agent, or an entity (legally recognized or not) or its principal, agents, or employees. "Relative" shaU have the same meaning as dermed in Florida Statute Section 112.3143. to wit: any father. mother. son. dau2hter. husband. wife. brother. sister. father in law. mother in Jaw. son in Jaw. or daUliliter in law; and grandDarents or grandchiJd(ren). Sec. 2-204 Abstention From Voting. (a) In addition to the provisions set forth in section 112.3143, F.S., a board member is deemed to have a conflict of interest and shall not be allowed to vote upon or advocate for or against, any decision, ruling, or official act where: (1) the board member, their relative, agent, employee (s), employer, or business associate has any interest, direct or indirect, in the issue upon which the board member will vote. (2) the board member or the board member's Spouse works for a business which will benefit from the issue upon which the board member will vote. 3 the board member is a real estate broker or real estate a_ent and has provided Drofessional services for compensation in a transaction involvin2: all or part of the real Droperty which is the subiect of the board's review. (b) A Board member who is prohibited from voting must leave the dias following disclosure of their conflict and shall not return until completion ofthe vote on that matter. A board member who stens down shall be replaced with an alternate board member. if one is Dresent. for the a~enda item. CODING: Words in stfilce thfeugli type are deletion from existing law; Words in underscored type are additions. Page 4 S:\CA\OrdinancesIStricler Voting Requirements J J0606.doc 1 2 3 4 5 6 7 8 9 ]0 11 ]2 13 ]4 15 ]6 17 ]8 ]9 20 21 22 23 24 25 26 27 28 29 30 3] 32 33 II Sec. 2-205 Disclosure of Conflict Interest. (a) Ifthere is, or there appears to be a conflict of interest under the provisions of this article or Section] 12.3] 3, F.S., the board member, prior to the commencement of a meeting a vete BY the heart! 9ft 8fl issHe which contains an agenda item in which a board member has a conflict, must disclose the conflict to the board by preparing a ffiel'HeFtUlalHfl tlK}:IlaiRiBg the a voting conflict form and submitting it to the City Clerk. or in the Clerk's absence. the person who keeps the minutes of the meeting. The Retiee eftlie eeafliet ffitlSt Be pleees eA the ageflsa efthe Beaca meetiHg at \":hieh the '!Ella is ta take }:Ilaee, &Be When the ~enda item is reached. the board member must orally disclose the conflict and the nature of the conflict on the record at the meeting. step down from the proceedin~ and be replaced. for that a2enda item. by an alternate member of the board.. (b) In the event that written disclosure has not been made prior to the meeting, the disclosure shall be made orally at the meeting when it becomes known that a conflict exists. Within 5 days after the oral disclosure, a written memorandum disclosing the conflict and the nature of the conflict shall be filed with the person responsible for recording the minutes of the board meetings and incorporated into the minutes of the meeting at which the oral disclosure was made. The memorandum shall become a public record, shall immediately be provided to the other members of the board, and shall be read publicly at the next meeting. (c) In the event that a board member has participated in a vote on an issue which the board member has a conflict and is later informed of the conflict, the board member, must, immediately upon notice, infonn the other board members by providing notice through the City Clerk in the same manner as set forth above memefliAel:lm sf this seRmet and disclose the conflict orally at the next meeting where the board member shall orally explain the conflict and why the board member was not on notice of the conflict prior to the participating in the vote. The remaining board members must then detennine whether the conflict is sufficient enough to have influenced the conflicting board member's vote and by a majority vote, decide whether to recall the decision upon which the conflicting member voted. CODING: Words in striles tRFel:lgh type are deletion from existing law; Words in underscored type are additions. Page 5 S:ICAIOrdinances\Strictcr Voting Requirements I I 0606. doc 19 " 1 Sec. 2-206. Enforcement. 2 3 Any appointed board member who violates any of the provisions of this article may 4 be removed from the board on which the member serves by majority vote of the City 5 Commission. Any elected public officer who violates this article shall also be subject to 6 censure by a majority vote of the remaining board members. 7 8 Section 3. It is the intention of the City Commission of the City of Boynton Beach that 9 the provisions ofthis Ordinance shall become codified and be made a part ofthe Code of Ordinances 10 of the City of Boynton Beach, Florida. The sections of this ordinance may be renumbered, 11 re-lettered and the word "Ordinance" may be changed to "Section", "Article" or such other word or 12 phrase in order to accomplish such intention. 13 Section 4. All Ordinances or parts of Ordinances, Resolutions or parts of Resolutions in 14 conflict herewith be and the same are hereby repealed to the extent of such conflict. 15 Section S. If any clause, section, or other part or application of this Ordinance shall be 16 held by any court of competent jurisdiction to be unconstitutional or invalid, such unconstitutional or 17 invalid part or application shall be considered as eliminated and so not affecting the validity of the I 8 remaining portions or applications remaining in full force and effect. Section 6. This Ordinance shall become effective upon its passage and adoption by the City 20 Commission. CODING: Words in soike tMeagb type are deletion from existing law; Words in underscored type are additions. Page 6 S:ICA IOrdinanceslStricler Voting Requirements I J 0606. doc II : I 2 FIRST READING this ~ day of November 3 4 5 6 7 8 9 10 J 1 12 J3 14 J5 16 J7 18 19 20 2J 22 23 24 25 26 27 28 29 30 31 ,2006. SECOND, FINAL READING and PASSAGE this ~ day of No vembe.... ,2006. CITY OF BOYNTON BEACH, FLORIDA / " . ( --corn'lone .... L---- CommisSioner ArrEST: , ~ ..... , . -..-;,.- ---..~-' ~- Words in strilce tftFeH~ type are deletion from existing law; Words in underscored type are additions. Page 7 S:\CA \OrdinanceslStricter Voting Requirements J 10606.doc MEMO DATE: June 17, 2007 TO: Lisa Bright, Executive Director FROM: Susan Harris SUBJECT: eRA Financials as of June 2007 This will provide a brief analysis of the budget vs. actual for the Agency's General Fund as of June 17, 2007. This is the standard monthly financial report provided to the CRA Board as part of the Agenda packet. As you read through the attached, you will see that we are on target for budget vs. actual expenditures. Page one lists each revenue and expense budget item, and pages 2-26 are specific line items associated with each budget item. Variance explanations follow: All Revenues & Expenses (paae 1) · Insurances - $5,146.97 variance due to additional properties purchased by CRA not anticipated. · Marina - Compare the YTD revenue of $507,381.68 versus YTD expenses of $450,155.42 and this item is on track. Departmental Line Item Variances · Page 9 - Professional Services/Building & Demolition: $4,420 variance due to additional properties for demolition not anticipated during budget preparation. · Page 11 - Buildings & Property/Office Space Charges & Property Maintenance Costs $4,996.25 variance: Acquisition of additional properties has resulted in unbudgeted costs for property maintenance. As new properties are assembled, these line items will need to be increased. · Page 12 - Marina: The purchase of the Marina Fuel Pad was not anticipated at budget preparation time (July 2006). Staff asked the Board to consider the purchase of the Marina Fuel Pad in August 2006 and the Board Chair directed staff to provide a more thorough analysis of the anticipated purchase. The purchase was approved in Nov. 2006. Therefore, the line items in this account will continue to be over budget. A comparison to YTD revenues versus expenses will continue to be tracked throughout the remainder of the fiscal year. · Page 13 - Communications & Technology/Contractual Expense & Cellular Phones: Variance of $1 ,069.65 for both items due to increased CRA staff cellular expenses and additional CRA office phone equipment. · Page 17 - TransportationfTrolley Market Costs: Variance of $3,427.00 due to additional signage required due to vandalism and new trolley maps for route changes (new Publix on Gateway). Page 1 of 2 · Page 20 - Special Events/Assoc. Meetings & Seminars: Variance of $403.58. This was an unbudgeted staff position filled in Nov. 2006. This position is funded jointly by the City (49%) and CRA (51%). Item is for meeting expenses. · Page 24 - Employee Benefits/Life Insurance: Variance of $604.34 due to increase in L TO re salary adjustments. As has been standard procedure previously, budget amendments are requested for approval by the CRA Board as needed. At the July CRA Board meeting I will request Board approval of various budget amendments to bring accounts back into conformity. 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CT\O'lE-< ~ r- ClUl ~ IX:U1U10 0 ~ ...-l ~~ rill IE-< E-< Pil I p., P=:...-l...-l &1 \.0 Pil E-<oo 0 oE-< 0 0 E-< IX: BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY INDEPENDENT AUDITOR'S REPORTS, BASIC FINANCIAL STATEMENTS AND REQUIRED SUPPLEMENTARY INFORMATION For the Year Ended September 30, 2006 DUFRESNE & ASSOCIATES, CPA, PA 357 STILES AVENUE POST OFFICE BOX 1179 ORANGE PARK, FLORIDA 32073 (904) 278-8980 PHONE (904) 278-4665 FAX BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY TABLE OF CONTENTS FOR THE YEAR ENDED SEPTEMBER 30, 2006 PAGE INDEPENDENT AUDITOR'S REPORT 1 MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) 3 BASIC FINANCIAL STATEMENTS: Government-wide Financial Statements: Statement of Net Assets 9 Statement of Activities 10 Governmental Fund Financial Statements: Balance Sheet - Governmental Funds 11 Reconciliation of the Balance Sheet - Governmental Funds to the Statement of Net Assets 12 Statement of Revenues, Expenditures and Changes in Fund Balances 13 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds to the Statement of Activities 14 Notes to Financial Statements 15 REQUIRED SUPPLEMENTARY INFORMATION: Budgetary Comparison Schedule Notes to the Budgetary Comparison Schedule 25 26 ADDITIONAL ELEMENTS REQUIRED BY THE RULES OF THE AUDITOR GENERAL: Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Govemment Auditing Standards 27 Management Letter 29 DUFRESNE fD ASSOCIATES, CPA, PA CERTIFIED PUBLIC ACCOUNTANTS MAILING ADDRESS: POST OFFICE Box 1179 ORANGE PARK. FLORIDA 32067-1179 www.dufresnecpas.com SATELLITE OFFICE 237 NINTH AVENUE NORTH JACKSONVILLE BEACH. FLORIDA 32250 TELEPHONE: 904270-&&20 MAIN OFFICE 357 STILES AVENUE ORANGE PARK. FLORIDA 32073 TELEPHONE: 90427&-&9&0 FACSIMILE: 90427&-4665 January 10,2007 INDEPENDENT AUDITOR'S REPORT To the Board of Directors Boynton Beach Community Redevelopment Agency Boynton Beach, Florida We have audited the accompanying financial statements of the governmental activities of the Boynton Beach Community Redevelopment Agency (the "CRA"), a component unit of the City of Boynton Beach, Florida (the "City") as of and for the year ended September 30, 2006, which collectively comprise the CRA's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the CRA's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities of the CRA as of September 30, 2006, and the changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued a report dated January 10, 2007 on our consideration of the CRA's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreement and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. The management's discussion and analysis and the budgetary comparison information are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. ()U'lr',t4~'" 'f "\ - (41-vlLaiC.J./ / ( r:JA; ~Ij Dufresne & Associates, CPA, PA 2 MANAGEMENT'S DISCUSSION AND ANALYSIS (Unaudited) The Management Discussion and Analysis (MD&A) of the Boynton Beach Community Redevelopment Agency (the CRA) is designed to provide an objective and easy to read analysis of the financial activities based on currently known facts, decisions, and conditions. The MD&A provides a broad overview and short-term and long-term analysis of the CRA's activities based on information presented in the financial statements. Specifically, this information is designed to assist the reader in focusing on significant financial issues, provide an overview of the CRA's financial activity, and identify changes in the CRA's financial position and its ability to address the next year's challenges. Finally, the MD&A will identify any material deviations from the approved budget. The CRA is an independent agency or a component unit of the City of Boynton Beach, Florida (the "City"). The CRA has presented its financial statements in accordance with the reporting model required by Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments (Statement 34). The information contained in this MD&A is only a component of the entire financial statement report. Readers should take time to read and evaluate all sections of the report, including the footnotes and required supplementary information provided. FINANCIAL HIGHLIGHTS · The CRA began the fiscal year with a net assets balance of $(581,849). The CRA's total revenues for the year ended September 30, 2006, were $7,070,509, while total expenses were $8,766,692. · The CRA's net assets decreased by $1,696,183. · The CRA's total investment in capital asset projects increased by $12,881,077. These capital assets included the purchase of several properties in the Heart of Boynton Project Area. OVERVIEW OF THE FINANCIAL STATEMENTS The CRA's basic financial statements are comprised of the 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains required supplementary information in addition to the basic financials statements themselves. Government-Wide Financial Statements The government-wide financial statements provide readers with a broad overview of the CRA's finances, in a manner similar to a private-sector business. In addition, the government-wide statements are prepared using the accrual basis of accounting. . 3 The statement of net assets (balance sheet) presents information on the CRA's assets and liabilities, with the difference between the two reported as net assets. The statement of activities (income statement) presents information showing how the CRA's net assets changed during the most recent fiscal year. All changes in revenues are reported as soon as underlying events giving rise to the change occur regardless of the timing of related cash flows. The expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods. The government-wide financial statements present functions of the CRA that are principally supported by tax increment financing (governmental activities). The governmental activities of the CRA include general government activities, public safety and redevelopment projects. Thus, the CRA has no business-type activities. The government-wide financial statements are found beginning on page 9 of this report. Fund Financial Statements The governmental fund financial statements provide readers with an overview of each fund and its related function in a traditional format. A fund is a grouping of related accounts that maintain control over resources that are segregated for specific activities or objectives. The CRA, like other state and local governments, uses fund accounting to ensure and demonstrate legal compliance with finance-related legal requirements. The CRA now utilizes three funds for the fiscal year ending September 30, 2006, the General Fund, which is a governmental fund, the Debt Service Fund, used for servicing all debt payments and the Bond Projects Fund, from which all Bond proceeds are spen t. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financials statements. However, unlike the government-wide fmancial statements, the governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements. The focus of governmental funds is narrower than government-wide financial statements, and it is therefore useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By comparing and contrasting, readers may better understand the long-term impact of the CRA's near term financing decisions. The Balance Sheet - Governmental Fund and Statement of Revenues, Expenditures, and Change in Fund Balance - Governmental Fund are reconciled as shown on the Reconciliation of the Balance Sheet - Governmental Fund to the Statement of Net Assets and the Reconciliation of the Statement of Revenues, Expenditures and Change in Fund Balance - Governmental Fund to the Statement of Activities to facilitate this comparison between the governmental fund and governmental activities. 4 The CRA adopts an annual appropriated budget for its General Fund. A budgetary comparison schedule provided for the General Fund demonstrates compliance with this budget. The basic governmental fund financial statements can be found beginning on page 11 of this report. The reconciliations between the governmental funds and governmental activi ties are found on pages 12 and 14. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and the fund financial statements. These notes to the financial statements begin on page 15 of this report. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the CRA's budget to actual results for the General Fund for the current year. The required supplement81")' information can be found on page 24 of this report. GOVERNMENT-WIDE FINANCIAL ANALYSIS As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the CRA, assets exceeded liabilities by $2,278,032 at the close of the most recent fiscal year. However, the largest portion of the CRA's total assets, 93% is reflected in its capital assets. CRA Net Assets at September 30,2006 2006 2005 Assets Current and other assets Capital assets Total assets $ 698,417 $ 20,725,300 9,783,870 2,767,079 10,482,287 23,492,379 2,263,632 2,230,206 32,292,712 21,844,022 34,556,344 24,074,228 Liabilities Current liabilities Long term liabilities Total liabilities Net assets Invested in capital assets, net of related debt Restricted for: Capital projects De bt Service Unrestricted Total net assets (20,183,422) (16,588,012) 12,881,077 13,607,064 2,772,082 1,707,885 2,252,231 691,214 $ (2,278,032) $ (581,849) 5 The CRA has restricted assets which are restricted for various capital projects and the bond reserve fund requirement. Governmental Activities Governmental activities decreased the CRA's net assets by $1,520,531. Key elements of this decrease are as follows. CRA Changes in Net Assets for the Year Ended September 30, 2006 2006 2005 Revenues General Revenues Tax increment revenues Other revenues Total Revenues $ 6,076,347 994,162 7,070,509 $ 3,871,616 576,817 4,448,433 Expenses General government Public safety Redevelopment projects Interest on long-term debt Total Expenses 2,048,057 1,223,846 343,523 5,331,035 5,277,848 1,387,600 801,280 8,766,692 7,646,497 (1,696,183) (3,198,064) (581,849) 2,616,215 $ (2,278,032) $ (581,849) Decrease in net assets Net assets beginning of year Net assets end of year Tax increment revenues increased by $ 2,204,731 during fiscal year 2006. Tax increment revenue increases are a product of increases in property values in the CRA's redevelopment area. In addition, increases in general government expense is directly due to the creation of an independent CRA with offices, staff, equipment, and supplies. 6 Expenses increased by $2,797,728 during fiscal year 2006. The increase is attributable to increased redevelopment activity due to the issuance of the Tax Increment Revenue Bonds, Series 2005 (Series 2005 Bonds). FINANCIAL ANALYSIS OF THE CRA'S FUNDS The focus of the CRA's governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the CRA's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. At the end of fiscal year 2006, the CRA's governmental fund reported an ending fund balance of $19,825,260, an increase of $1,649,865 in comparison with prior year. The increase is attributable to increased redevelopment activity due to the issuance of the Tax Increment Revenue Bonds, Series 2005 (Series 2005 Bonds). GENERAL BUDGETARY HIGHLIGHTS Actual revenues exceeded budgetary estimates by $538,091. Actual bond proceeds received were more than budgetary estimates. Actual expenses were less than budgetary estimates by $2,882,560. Expenditures for re-development projects were less than estimated. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets The CRA continues to assemble properties throughout the redevelopment district with an eye on expanded development in the next twelve months. During the year ended September 30, 2006, the CRA purchased eight of the thirty-one properties approved for acquisition in the Heart of Boynton area that will be developed into mixed use projects, which will include elements of retail, office condo and residential. Long Term Debt At the end of fiscal year 2006, the CRA has total bonded debt and loans payable outstanding of $31,581,119. Of this amount, $18,010,000 represents the 2004 Tax Increment Revenue Bonds secured solely by tax increment revenues. The loan payable of $2,296, 119 represents a loan payable to Bank of America, N.A. The CRA's total debt increased by $11,275,000 during the current fiscal year. On December 12, 2005, the CRA issued $11,275,000 Tax Increment Revenue Bonds, Series 2005A & 2005B (Series 2005 Bonds). The Series 2005 Bonds were issued for the purpose of providing funds to pay the cost of various capital improvements described in the community redevelopment plan of the CRA. The Series 2005 Bonds has a Reserve Fund in an amount equal to the Reserve Fund Requirement of $962,500. The Series 2005 Bonds are secured by CRA tax increment revenues with a City back-up pledge, which would allow the CRA's debt to be issued with bond insurance and ratetl "AAA", the highest tax-exempt bond rating. 7 ECONOMIC FACTORS AND NEXT YEAR'S BUDGET AND RATES The CRA Board approved the 2006-2007 budget, which included projections through 2009. Tax increment revenue projections were based upon actual 2005 values from the tax appraiser's office and projections of projects coming on line between the years of 2005 and 2009. In addition, the CRA tax increment income was derived from two factors. The first factor was the amount of "new construction" within the district, which was generated from new projects. Secondly, the CRA captured the difference between the 2005 base evaluation and the new appraised value for these new construction projects. The second area of tax revenue generation is from appreciation within the CRA district, which was substantial at 15%. It should be noted that the CRA expects its tax increment revenues to reach over $9,000,000 in fiscal 2006-2007. The CRA Board approved the purchase of additional marina property that includes 70 parking spaces for public use in the Marina Village parking structure for a coast of $3,570,000. The 2006-2007 budget calls for a cash down payment of $1,570,000 in Project Fund and General Fund operating revenue. The seller has agreed to carry the balance of $2,000,000 over a four year period at the rate of 5%. The CRA expects the Tax Increment Financing rates (TIF) to increase in the coming years. Despite the downturn in the market the CRA is confident that the TIF will continue to grow. The CRA feels poised to capture significant tax dollars from several projects that are in the development pipeline when the market rebounds. REQUEST FOR INFORMATION This financial report is designed to provide a general overview of the CRA's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Executive Director at 639 East Ocean Avenue, Suite 103, Boynton Beach, Florida 33435. 8 BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY STATEMENT OF NET ASSETS SEPTEMBER 30, 2006 GOVERNMENTAL ACTNITIES ASSETS Cash and cash equivalents $ 4,001,362 Investments Accounts receivable 2,462,929 Mortgage receivable 100,000 Prepaids 14,974 Unamortized bond issue costs 405,550 Restricted assets: Temporarily restricted: Investments 15,509,624 Capital assets: Land 9,689,557 Furniture and equipment 91,619 Renovations 8,440 Leasehold improvements 21,099 Accumulated depreciation (26,845) TOTAL ASSETS $ 32,278,309 LIABILITIES Accounts payable and accrued expenses $ 2,222,428 Deposits payable 5,308 Due to City of Boynton Beach 35,893 Long-term liabilities: Due within one year 410,823 Due in more than one year 31,881,889 TOTAL LIABILITIES 34,556,341 NET ASSETS Invested in capital assets, net of related debt (20,183,422) Restricted for: Capital projects 12,881,077 Debt service 2,772,082 Unrestricted 2,252,231 TOTAL NET ASSETS $ (2,278,032) . See notes to financial statements. 9 BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY STATEMENT OF ACTIVITIES FOR THE YEAR ENDFlJ SEPTEMBER 30, 2006 FUNCTIONS/PROGRAMS GOVERNMENTAL ACTIVITIES: General government Redevelopment projects Interest on long-term debt TOTAL PROGRAM REVENUES EXPENSES CHARGES FOR SERVICES $ 2,048,057 $ 7,464,094 1,387,600 $ 10,899,751 $ GENERAL REVENUES Tax increment revenue Interest and other income TOTAL GENERAL REVENUES CHANGE IN NET ASSETS NET ASSETS - Beginning of year NET ASSETS - End of year See notes to financial statements. 10 OPERATING GRANTS AND CONTRIBUTIONS $ $ $ (2,048,057) 2,133,059 (5,331,035) (1,387,600) 2,133,059 $ (8,766,692) CAPITAL GRANTS AND CONTRIBUTIONS $ $ NET $ 6,076,347 994,162 7,070,509 (1,696,183) (581,849) $ (2,278,032) BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY BALANCE SHEET - GOVERNMENTAL FUNDS SEPTEMBER 30, 2006 BOND TOTAL PROJECTS DEBT SERVICE GOVERNMENTAL GENERAL FUND FUND FUND FUNDS ASSETS Cash and cash equivalents $ 3,857,827 $ 44,496 $ 99,039 $ 4,001,362 Investments 12,836,581 2,673,043 15,509,624 Accounts receivable 2,001,800 460,285 844 2,462,929 Mortgage receivable 100,000 100,000 Prepaids 14,974 14,974 Due from other funds 562,407 27,237,893 27,800,300 TOTAL ASSETS $ 6,537,008 $ 13,341,362 $ 30,010,819 $ 49,889,189 LIABILITIES AND FUND BALANCE LIABILITIES Accounts payable and accrued expenses $ 2,107,489 $ 114,939 $ $ 2,222,428 Deposits payable 5,308 5,308 Due to City of Boynton Beach 35,893 35,893 Due to other funds 27,237,893 562,407 27,800,300 TOTAL LIABILITIES 2,148,690 27,352,832 562,407 30,063,929 FUND BALANCE Unreserved 4,373,344 (14,011,470) 29,448,412 19,810,286 Reserved for prep aids 14,974 14,974 TOTAL FUND BALANCE 4,388,318 (14,011,470) 29,448,412 19,825,260 TOTAL LIABILITIES AND FUND BALANCE $ 6,537,008 $ 13,341,362 $ 30,010,819 $ 49,889,189 See notes to financial statements. 11 BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY RECONCILIATION OF THE BALANCE SHEET - GOVERNMENTAL FUND TO THE STATEMENT OF NET ASSETS SEPTEMBER 30, 2006 FUND BALANCE - TOTAL GOVERNMENTAL FUND Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not reported in the governmental fund. Capital assets - net Unamortized bond issue costs are not reported in the governmental fund. Long-term liabilities are not reported in the governmental fund. Compensated absences Note payable Bonds payable NET ASSETS OF GOVERNMENTAL ACTIVITIES See notes to financial statements. 12 $ 19,825,260 9,783,870 405,550 (29,299) (2,296,119) (29,967,294) $ (2,278,032) BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY STATEMENT OF REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCES - GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2006 TOTAL GENERAL BOND PROJECTS DEBT SERVICE GOVERNMENTAL FUND FUND FUND FUNDS REVENUES Tax increment revenue $ 6,076,347 $ $ $ 6,076,347 County grant revenue 2,125,314 2,125,314 Contributions and donations 1,000 1,000 Interest and other income 298,153 600,196 102,562 1,000,911 TOTAL REVENUES 8,500,814 600,196. 102,562 9,203,572 EXPENDITURES General government 1,936,659 1,498 25 1,938,182 Redevelopment projects 2,828,376 4,635,720 7,464,096 Debt Service: Principal retirement 174,563 585,000 759,563 In terest 140,565 1,257,186 1,397,751 Debt issuance costs 113,716 113,716 Capital outlay 7,024,950 7,024,950 Transfer to Police Department 90,668 90,668 TOTAL EXPENDITURES 12,195,781 4,750,934 1,842,211 18,788,926 EXCESS OF REVENUES OVER EXPENDITURES (3,694,967) (4,150,738) (1,739,649) (9,585,354) OTHER FINANCING SOURCES Bond proceeds 11,235,219 I 1,235,219 Transfers in 5,532,630 1,507,884 597,751 7,638,265 Transfers out (2,067,352) (5,570,913) (7,638,265) TOTAL OTHER FINANCING SOURCES 3,465,278 (4,063,029) 11,832,970 11,235,219 NET CHANGE IN FUND BALANCE (229,689) (8,213,767) 10,093,321 1,649,865 FUND BALANCE, Beginning of Year 4,618,007 (5,797,703) 19,355,091 18,175,395 FUND BALANCE, End of Year $ 4,388,318 $ (14,01 I ,470) $ 29,448,412 $ 19,825,260 See notes to financial statements. 13 BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCE - GOVERNMENTAL FUND TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2006 NET CHANGE IN FUND BALANCE - TOTAL GOVERNMENTAL FUND Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlay expenditures. However, in the statement of activities, the cost of those assets is depreciated over their estimated useful lives. Expenditures for capital assets Less current year depreciation expense For governmental funds, the issuance of long-term debt provides current financial resources and the repayment of long-term debt consumes current financial resources. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Change in long-term compensated absences CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES $ 1,649,865 7,024,949 (8,158) (10,351,789) (11,050) $ (1,696,183) See notes to financial statements. 14 BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED SEPTEMBER 30, 2006 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the Boynton Beach Community Redevelopment Agency (the CRA) conform to Generally Accepted Accounting Principles (GAAP) as applicable to governments. The following is a summary of the more significant policies. A. Reporting Entity The CRA is a dependent component unit established by the City of Boynton Beach, Florida (the "City") under the authority granted by Florida Statutes 163, Section III. The purpose of the CRA is to promote and guide physical and economic redevelopment in the City of Boynton Beach and part of Palm Beach County, Florida (the "District"). The CRA is a legally separate entity established by Ordinance number 83-41 of the City of Boynton Beach on December 20, 1983. The CRA has adopted Governmental Accounting Standards Board Statement No. 14 (GASB Statement No. 14), the Financial Reporting Entity, for the purpose of evaluating its component unit financial statements. Based on the criteria in GASB 14, the CRA has determined that there are no units that meet criteria for inclusion in the CRA's financial statements. B. Reporting Model The CRA's basic financial statements consist of government-wide statements, including a statement of net assets and a statement of activities, and fund financial statements which provide a more detailed level of financial information. Governmen t - Wide Financial Statements The statement of net assets and the statement of activities report information on all of the activities of the CRA. Governmental activities are reported separately from business-type activities, which rely on fees charged to external parties as their primary revenues. The CRA has no business-type activities. The statement of net assets reports the CRA's financial position as of the end of the fiscal year. In this statement, the CRA's net assets are reported in three categories: invested in capital assets, net of related debt; restricted net assets; and unrestricted net assets. The statement of activities presents a comparison between direct expenses and program revenues for each function of the CRA. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include charges for services that are directly related to a given function and grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Tax increment revenue and other items not meeting the definition of program revenue are reported instead as general revenue. 15 BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED SEPTEMBER 30, 2006 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) B. Reporting Model (continued) Fund Financial Statements For the fiscal year ending September 30, 2006, the CRA utilized three funds, the General Fund, the Debt Service Fund and the Bond Programs Fund. The general fund is classified as a governmental fund and accounts for all financial resources controlled by the CRA. The debt service fund is used to account for the accumulation of resources for the annual payment of principal and interest on long-term obligation debt and the bond programs fund accounts for all single- family bond programs. The governmental fund statement includes reconciliations with brief explanations to better identify the relationship between the government- wide statements and the statements for the governmental fund. C. Measurement Focus and Basis of Accounting The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. The governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the CRA considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when the related fund liability is incurred. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. D. Cash and Cash Equivalents Cash and cash equivalents are defined as short-term highly liquid investments that are both readily convertible to known amounts of cash and have an original maturity of three months or less. Cash and cash equivalents consist of petty cash and deposits I with financial institutions qualified as public depositories under Florida law. All deposits are insured by federal depository insurance and/ or collateralized with securities held in Florida's multiple financial institution collateral pool as required by Chapter 280, Florida Statutes. E. Investments All of the CRA's investments consist of amounts placed with the State Board of Administration ("SBA") for participation in the Local Government Surplus Funds 16 BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED SEPTEMBER 30, 2006 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) E. Investments (continued) Trust Fund investment pool ("SBA Investment Pool") created by Section 281.405, Florida Statutes, and those made locally. The SBA Investment Pool operates under investment guidelines established by Section 215.47, Florida Statutes. The District's investments in the SBA Investment Pool, which is a Securities and Exchange Commission Rule 2a7 -like external investment pool, are reported at amortized cost. Investments made locally consist of amounts placed in obligations of United States Government Agencies and Instrumentalities and are reported at fair value. Investments for the Agency Funds consist of monies placed in certificates of deposit. The CRA is authorized to invest in direct obligations of the United States of America or any agency thereof, interest bearing time or demand deposits with any qualified depository institution, commercial paper, bankers' acceptances, state and/ or local government taxable debt, mutual funds, repurchase agreements and the State Treasurer's investment pool, which has the characteristics of a money market fund. The CRA has adopted GASB Statement No. 40, Deposit and Investment Risk Disclosures, (GASB Statement No. 40) in fiscal year 2005. The affect of this adoption is the inclusion of new disclosures for deposit and investment risks. F. Capital Assets Capital assets are defined by the CRA as assets with an initial, individual cost of $1,000 or more and an estimated useful life of more than one year. These assets are recorded at historical cost. Donated capital assets are recorded at estimated fair value at the date of donation. Capital assets are depreciated using the straight-line method over the assets' estimated useful lives of all reported capital assets, except land and land improvements. The estimated usefullife of furniture, fixtures and equipment is five to ten years. G. Bond Premiums and Issuance Costs In the government-wide financial statements, bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight line method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond preITI:iums and discounts, as well as bond issuance costs during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts are reported as other financing uses. Issuance costs are reported as debt service expenditures. 17 BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED SEPTEMBER 30, 2006 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) H. Revenue Sources Tax increment revenues are the primary source of revenue for the CRA. Tax increment revenue is collected from two governmental entities that levy property taxes within the legally defined redevelopment area of the CRA, which is the City of Boynton Beach, Florida. 1. Compensated Absences It is the CRA's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. Employees may, depending on their level of service, be paid for various amounts of their total accrued leave upon termination or retirement. The CRA accrues a liability for leave hours that meet the criteria for payment at the eligible employees' current rates of pay. J. Long-term Liabilities All long-term debt and other long-term obligations are reported in the government- wide financial statements. In the fund financial statements, long-term liabilities are not reported because governmental funds use the current financial resources measurement focus. K. Net Assets Net assets represent the difference between assets and liabilities and are reported in three categories as hereafter described. Net assets invested in capital assets, net of related debt, represent capital assets, net of accumulated depreciation and any outstanding debt related to those assets. Net assets are reported as restricted when there are legal limitations imposed on their use by legislation, or external restrictions imposed by other governments, creditors, or grantors. Unrestricted net assets are net assets that do not meet the definitions of the classifications previously described. When both restricted and unrestricted resources are available for use, it is the CRA's policy to use restricted resources first, and then unrestricted resources as they are needed. L. Budgets and Budgetary Accounting An annual budget is adopted on the modified accrual basis of accounting, consistent with generally accepted accounting principles, with the exception of compensated absences and festivals/events/seminars expenditures. Compensated absences are budgeted only to the extent expected to be paid, rather than on the modified accrual basis. Festivals/events/seminars expenditures are netted against revenue generated from these expenditures, rather than reporting revenues and expenditures individually. Amendments to the budget can only be made with the approval of the Board of Directors (the "Board") fund is the legal level of control. 18 BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED SEPTEMBER 30, 2006 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) M. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make various estimates. Actual results could differ from those estimates. 2. CASH, CASH EQUIVALENTS AND INVESTMENTS All of the CRA's bank deposits are insured by the Federal Deposit Insurance Corporation or collateralized in accordance with Florida Security for Public Deposits Act (the "Act"). Under the Act, every qualified public depository shall deposit with the Treasurer eligible collateral having a market value equal to 50% of the average daily balance for each month that all public deposits are in excess of any applicable deposit insurance. If the public deposits exceed the total amount of the regulatory capital accounts of a bank or the regulatory net worth of a savings association, the required collateral shall have a market value equal to 125% of the deposits. The CRA's investment policy is designed to ensure the prudent management of funds, and the availability of operating and capital funds when required, while earning a competitive return within the policy framework. The primary objectives, in order of priority, of investment activity shall be safety, interest rate risk, liquidity, and yield. Investments of the CRA include deposits and guaranteed contracts with banks or other financial institutions which meet standards for deposits stipulated in investment agreements. Memorandum Only - Combined Totals Investment Maturities (in Years) Total Fair Less Value Than 1 1-10 $ 4,000,862 $ $ 500 15,509,624 15,509,624 19,510,986 15,509,624 (4,001,362) $ 15,509,624 $ $ 15,509,624 Cash and cash equivalents: Bank deposits Cash on hand Investments: Investment agreements Total cash, cash equivalents and investments Less cash and cash equivalents Total investments 19 BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED SEPTEMBER 30, 2006 2. CASH, CASH EQUIVALENTS AND INVESTMENTS (continued) A. Interest Rate Risk Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The CRA's investment policy to minimize interest rate risk is to structure the investment portfolio so that the securities mature to meet cash requirements for current budgeted needs, thereby avoiding the need to sell securities on the open market prior to maturity. B. Foreign Currency Risk Foreign currency risk is the risk that changes in exchange rates will adversely affect the fair value of an investment or a deposit. The CRA does not hold foreign or foreign currency investments and therefore is not subject to foreign currency risk. C. Credit Risk The CRA also mitigates credit risk, which is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Custodial credit risk is the risk that, in the event of the failure of the counterparty to a transaction, the CRA will not be able to recover the value of investment or collateral securities that are held in the possession of an outside party. Authorized investments under the bond resolution include investment agreements, including Guaranteed Investment Certificates (GIC's), acceptable to Municipal Bond Insurance Agency (MBIA). D. Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The CRA diversifies its investment portfolio to minimize the impact of potential losses from one type of security or individual issuer, excluding D.S Treasuries, and Federally Guaranteed Obligation. The implementation of GASB Statement No. 40 requires the disclosure of investments in anyone issuer that represents five percent or more of total investments. As of September 30, 2006, the CRA had investments in the percentages of the total investments shown below with the following issuers: MBIA & Commerce (Bond Reserve) Citigroup (construction) $ 2,673,043 12,836,581 15,509,624 17.23% 82.77% 100.00% $ 20 BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED SEPTEMBER 30, 2006 3. CAPITAL ASSETS Capital asset activity for the year ended September 30, 2006, was as follows: At September 30,2006, bonds and loans payable consisted of the following: BONDS: 2004 Tax Increment Revenue Bonds, dated December 14,2004, due in annual principal installments of $375,000 to $6,045,000 through October 1,2024, bearing interest rates of 3.0% to 5.0% 2005 A & B Bonds dated December 12, 2005, due in annual principal installments of $69,075 to $2,840,000 through October 1, 2026, bearing interest rates of 4.90% to 5.65% 2005A $ 18,010,000 3,000,000 2005B 8,275,000 LOANS: Promissory note to Bank of America, N.A. at 6.56% interest, payable in thirty semi-annual installments through September 20,2016 2,296,119 $ 31.581.119 21 BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED SEPTEMBER 30, 2006 4. LONG-TERM LIABILITIES (continued) The annual requirements to amortize the bonds and loans payable outstanding as of September 30,2006, are as follows: 2004 Tax 2005 A Increment Revenue Bonds Principal Interest Principal Interest $ $ 793,925 $ $ 135,000 600,000 779,112 135,000 615,000 763,156 135,000 635,000 745,175 135,000 3,495,000 3,376,844 675,000 5,270,000 2,497,931 675,000 7,395,000 952,375 1,465,000 675,000 1,535,000 69,075 $ 18,010,000 $ 9,908,518 $ 3,000,000 $ 2,634,075 2005 B Note Payable Totals Principal Interest Principal Interest Principal Interest $ 235,000 $ 453,320 $ 175,823 $ 129,015 $ 410,823 $ 1,511 ,260 245,000 441,335 185,697 119,141 1,030,697 1,474,588 255,000 428,840 196,829 108,008 1,066,829 1,435,004 275,000 415,835 208,266 96,572 1,118,266 1,392,582 1,575,000 ] ,856,560 1,237,290 286,899 6,307,290 6,] 95,303 ],990,000 1,393,290 292,213 12,625 7,552,213 4,578,846 2,840,000 767,553 1 ],700,000 2,394,928 860,000 48,590 2,395,000 117,665 $ 8,275,000 $ 5,805,323 $ 2,296,118 $ 752,260 $ 31,581,118 $ 19,100,176 22 BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED SEPTEMBER 30, 2006 Transactions for the year ended September 30,2006 are summarized as follows: BALANCE AT BALANCE AT END DUE BEGINNING OF OF YEAR WITHIN YEAR 10/01/05 ADDITIONS DELETIONS 9/30/06 ONE YEAR Bonds payable $ 18,595,000 $ 11,275,000 $ (585,000) $ 29,285,000 $ 235,000 Plus deferred amounts: For discount (39,781) 1,989 (37,792) For issuance premium 760,091 (40,005) 720,086 Total bonds payable 19,355,091 11,235,219 (623,016) 29,967,294 235,000 Note payable 2,470,682 (174,563) 2.296,119 175,823 Compensated absences 18,249 11,050 29,299 Total long-term liabilities $ 21,844,022 $ 11.246,269 $ (797,579) $ 32,292.712 $ 410,823 On December 12, 2005, the CRA issued $11,275,000 Tax Increment Revenue Bonds, Series 2005A & 2005B (Series 2005 Bonds). The Series 2005 Bonds were issued for the purpose of providing funds to pay the cost of various capital improvements described in the community redevelopment plan of the CRA. 5. RISK MANAGEMENT The CRA is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The CRA purchases commercial insurance for the risks of loss to which it is exposed. Policy limits and deductibles are reviewed by management and established at amounts to provide reasonable protection from significant financial loss. Settlements did not exceed insurance coverage for the current fiscal year. 6. COMMITMENTS AND CONTINGENT LIABILITIES Facade Grant Program The CRA established a Facade grant program in an effort to promote the redevelopment of the facades of existing businesses located in the City of Boynton Beach. The program offers businesses a $15,000 matching grant to improve the facades of their businesses. During the year ended September 30, 2006, the CRA closed and disbursed $15,000 for facade grants. 23 BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED SEPTEMBER 30, 2006 Lease Commitments The CRA leases buildings and equipment under non-cancelable operating leases. Future minimum rental payments as of September 30, 2006 required by these leases are as follows: 2007 2008 $ 48,000 28,000 $ 76.000 Rental costs for the year ended September 30, 2006, approximated $46,240. 7. RETIREMENT CONTRIBUTIONS The CRA participates in a defined contribution pension plan. The plan is qualified under Sections 401(1), 403(a) and 501 (a) of the Internal Revenue Code. The Plan is administered by independent trustees. All employees who meet the requirements are qualified to participate. Employees make voluntary contributions to the plan. The CRA's required contribution is 5% of the total salaries of qualified participants. Total salaries for the year were $606,530. Total salaries of qualified participants were $51,066. Each participant's non-forfeitable percentage of this employer's contribution account increases (vests) 20% for each year of service. Employer contributions for the period totaled $39,802 and are included in personal service expenditures of the General Fund. The CRA also participates in a 457 Deferred Compensation Plan. The Plan is administered by independent trustees. All employees who met the requirements are qualified to contribute. As of September 30, 2006, the amount held by the Trustee is $20,395.53. 8. RELATED PARTY TRANSACTIONS The CRA is a component unit of the City of Boynton Beach, Florida. For the year ended September 30, 2006 the CRA's tax increment revenues include $3,813,697 received from the City. The CRA reimbursed the City for certain costs such as recording and information technology services, festival expenses, fire and rescue, and police services during the year. Total payments to the City for the year ended September 30,2006, were approximately $1,936,340. 9. SUBSEQUENT EVENT As of July 11, 2006, the CRA is involved in a legal investigation pertaining to a property purchase/swap at 208 NE 10th Avenue with Greater St. Paul AME Church. As of September 30, 2006 there has been no definitive legal action or remedy taken by the CRA. 24 REQUIRED SUPPLEMENTARY INFORMATION BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY BUDGETARY COMPARISON SCHEDULE - GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30, 2006 BUDGETED AMOUNTS FINAL BUDGET ACTUAL POSITIVE ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Tax increment revenue $ 6,000,000 $ 6,000,000 $ 6,076,347 $ 76,347 County grant revenue 1,155,000 1,155,000 2,125,314 970,314 Contributions and donations 1,000 1,000 Interest and other income 767,723 807,723 298,153 (509,570) TOTAL REVENUES 7,922,723 7,962,723 8,500,814 538,091 EXPENDITURES General government 1,114,623 1,768,549 1,936,659 (168,110) Public safety 365,000 110,463 110,463 Redevelopment projects 3,827,363 3,509,625 2,828,376 681,249 Debt Service: Principal retirement 749,463 749,273 174,563 574,710 Interest 1,587,238 1,587,429 140,565 1,446,864 Debt issuance costs 279,036 237,384 237,384 TOTAL EXPENDITURES 7,922,723 7,962,723 5,080,163 2,882,560 EXCESS OF REVENUES OVER EXPENDITURES 3,420,651 3,420,651 Capital outlay (7,024,950) (7,024,950) OTHER FINANCING SOURCES Transfers in 5,532,630 5,532,630 Transfers out (2,158,020) (2,158,020) TOTAL OTHER FINANCING SOURCES 3,374,610 3,374,610 NET CHANGE IN FUND BALANCE (229,689) (229,689) FUND BALANCE, Beginning of Year 4,618,007 4.618,007 4,618,007 FUND BALANCE, End of Year $ 4,618,007 $ 4,618,007 $ 4,388,318 $ (229,689) See notes to budgetary comparison schedule. 25 BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY NOTES TO THE BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED SEPTEMBER 30, 2006 The CRA is required to establish a budgetary system and an approved annual budget for the General Fund. The CRA budgeting process is based on estimates of cash receipts and cash expenditures which are approved by the Board. The legal level of budgetary control, the level at which expenditures may not exceed budget, is in the aggregate. Any budget amendments that increase the aggregate budgeted appropriations must be approved by the Board. 26 ADDITIONAL ELEMENTS REQUIRED BY THE RULES OF THE AUDITOR GENERAL DUFRESNE & ASSOCIATES, CPA, PA CERTIFIED PUBLIC ACCOUNTANTS MAILING ADDRESS: POST OFFICE Box 1179 ORANGE PARK. FLORIDA .32067-1179 www.dufresnecpas.com SATELLITE OFFICE 2.37 NINTH AVENUE NORTH JACKSONVILLE BEACH. FLORIDA .32250 TELEPHONE: 904270-<5820 MAIN OFFICE .357 STILES AVENUE ORANGE PARK. FLORIDA .3207.3 TELEPHONE: 904278-8980 FACSIMILE: 904278-4665 January 10, 2007 INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Board of Directors Boynton Beach Community Redevelopment Agency Boynton Beach, Florida We have audited the accompanying combined financial statements of the governmental activities of the Boynton Beach Community Redevelopment Agency (the "CRA") , a component unit of the City of Boynton Beach, Florida (the "City") as of and for the year ended September 30, 2006, which collectively comprise the CRA's basic financial statements, and have issued our report thereon dated January 10,2007. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. COMPLIANCE As part of obtaining reasonable assurance about whether the CRA's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported herein under Government Auditing Standards. INTERNAL CONTROL OVER FINANCIAL REPORTING In planning and performing our audit, we considered the CRA's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide an opinion on the internal control over financial reporting. Our consideration of the internal control would not necessqrily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a reportable 27 condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the- risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we considered to be material weaknesses. However, we noted other matters involving the internal control over financial reporting that we have reported to management of the CRA in a separate letter dated January 10,2007. This report is intended for the information of the CRA. This restriction is not intended to limit the distribution of this report, which is a matter of public record. ()U~tcP l' ~1~1u/( ,) A- flA- Dufresne & Associates, CPA, PA 28 DUFRESNE (6 ASSOCIATES, CPA, PA CERTIFIED PUBLIC ACCOUNTANTS MAILING ADDRESS: POST OFFICE BOX 1179 ORANGE PARK. FLORIDA 32067-1179 www.dufresnecpas.com SATELLITE OFFICE 237 NINTH AVENUE NORTH JACKSONVILLE BEACH. FLORIDA 32250 TELEPHONE: 904270-8820 January 10, 2007 MAIN OFFICE 357 STILES AVENUE ORANGE PARK. FLORIDA 32073 TELEPHONE: 904278-8980 FACSIMILE: 904278-4665 MANAGEMENT LETTER To the Board of Directors Boynton Beach Community Redevelopment Agency Boynton Beach, Florida We have audited the basic financial statements of the CRA, a component unit of the City of Boynton Beach, Florida (the "City") as of and for the fiscal year ended September 30,2006, and have issued our report thereon dated January 10,2007. We conducted our audit in accordance with U.S. generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. We have issued Our Independent Auditor's Report on Compliance and Internal Control Over Financial Reporting based on an audit of financial statements performed in accordance with Government Auditing Standards. Disclosures in that reported, dated January 10, 2007, should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with the provisions of Chapter 10.850, Rules of the Auditor General, which require that we address certain compliance and other matters in the management letter, if not already addressed in the auditor's report on compliance and internal control. In planning and performing our audit of the financial statements of the CRA for the year ended September 30, 2006, we considered the CRA's internal controls in order to determine the Scope of OUr audit procedures for the purpose of expressing an opinion on the financial statements and not to provide assurance on internal control. While our purpose was not to provide assurance on internal control, certain matters came to our attention that we want to report to you. PRIOR YEAR FINDINGS AND RECOMMENDATIONS The Rules of the Auditor General (Section 10.554( l)(h) 1.) require that we address in the management letter, if not already addressed in the auditor's reports on compliance and internal control, whether or not inaccuracies, shortages, defalcations, fraud and/or violations of laws, rules, regulations and contractual provisions reported in the preceding annual financial report have been corrected. None of the aforementioned were disclosed in the preceding audit report 29 Additionally, the Rules of the Auditor General require that we address in the management letter, if not already addressed in the auditor's reports on compliance and internal control, whether or not recommendations made in the management letter delivered with the prior year audit report have been followed and otherwise apply. The prior year recommendations have been followed. The following is a summary of prior year recommendations: ACCRUAL BASIS OF ACCOUNTING Condition: At present, the CRA keeps its general ledger on the basis of cash receipts and cash disbursements, whereby certain revenues and the related assets are recognized when received, and expenses are recognized when paid. Recommendation: We recommend that the accrual basis of accounting be considered. Under that basis, revenues and the related assets are recorded when earned and expenses are recorded when the obligation is incurred. The accrual basis is required by generally accepted accounting principles since it results in financial statements that reflect the complete effects of the CRA's (OMP) financial transactions for a period. Management Response: As of November 2005 the CRA has employed a new financial software platform that will allow the CRA to conduct its financial accounting on an accrual basis. Henceforth, all expenses incurred in any fiscal year will be charged to the correct year for budgetary purposes. The CRA will also employ purchase orders to help accomplish the necessary fiscal tracking. In addition, all CRA revenues will be booked in the year in which they were earned. The CRA will no longer operate on a CASH basis. It should be noted that all expenses and revenues attributable to the prior year will considered up to 60 days after the close of the fiscal year. Status: Cleared CURRENT YEAR FINDINGS AND RECOMMENDATIONS The Rules of the Auditor General (Section 10.554(I)(g)(3)) require disclosure in the management letter of any recommendations to improve financial management, accounting procedures, and internal controls. The following is a summary of current year recommendations. Condition: The CRA paid for artwork in their offices, which meet the definition of a public place. Florida Statutes does not allow the artwork to be paid for using TIF revenues. There was no evidence that revenues were officially allocated from Sources other than TlF to pay for the artwork. Recommendation: We recommend that the governing body take official action regarding allocation of non-TIF revenues to cover the artwork expenditures. 30 Management Response: One of the CRA's initiatives is to support local business. All art in question was created by local artists. The art was funded with revenues from marina slip rentals and no TIF funds were involved. At the CRA Board Meeting scheduled for March 13, 2007 an item will be presented for consent on the agenda to officially allocate non- TIF revenues to fund the art expenditures. OTHER REQUIRED INFORMATION Based on the criteria specified in 218.503(1) Florida Statutes, nothing came to our attention to cause us to believe that the CRA is, or during the fiscal year ended September 30, 2006, was,.in a state of financial emergency as defined in the Statutes. We applied our own financial condition assessment procedures. The results of our procedures disclosed no matters that are required to be reported. The CRA is in compliance with Section 218.415, Florida Statutes, regarding the investment of public funds. The CRA has been classified as a dependent component unit for the purpose of filing the annual financial report with the Department of Banking and Finance pursuant to Section 218.32, Florida Statutes. Accordingly, the CRA does not file a separate annual financial report with the state. Instead, the CRA's annual financial information will be included in the annual financial report of the City of Boynton Beach, Florida for the year ended September 30, 2006. This management letter is intended solely for the information and use of the Board of Directors and management of the CRA, the City of Boynton Beach, and regulatory agencies and is not intended to be and should not be used by anyone other than these specified parties. Thank you and your staff for the cooperation and courtesies extended to us during the course of the audit. Please Jet us know if you have any questions or comments concerning this letter, our accompanying reports, or other matters. . .1 _ :...1.),A/'L-t<1-1'-.{J ';(} CL4')-{i-z..u.:"t;UJ.-- (/ ,) ,4-//~"1+- () ...-/- , /' .. Dufresne & Associates, CPA, PA 31 Response to City Commissioner Allegations that the CRA Purchased 211 East Ocean Avenue (aka 1902 Oscar Mangnuson Home) above Appraised Value The CRA Board of Directors was operating under the following assumptions when they considered the purchase of 211 E. Ocean Avenue: · The CRA's prior office location 635 NE 1st Avenue (First Financial Plaza) was being assembled for a redevelopment project, Ocean One, which the CRA supported by encumbering funds to assist with eminent domain on the last four units. · CRA staff was housed in two separate offices in either end of First Financial Plaza. · In October 2006 CRA staff was directed by the Board to investigate the potential to rent or purchase new office space that could house the entire staff. Staff reported to the Board that there was no office space in the CRA district for sale or rent that was large enough to house the staff. · In November, Tom Walsh approached CRA staff about selling his property at 211 East Ocean. · Mr. Walsh had the property listed on MLS for $1.1M as verified by the CRA's appraisal of the property. · Staff investigated the property for possible office use and felt it could be converted to an office and become an active use on Ocean Avenue similar to many properties in De1ray Beach and West Palm Beach Staff was aware that converting from residential to commercial would require a site plan, land use and zoning change per the Ocean District Plan. However, staff felt the price of $l.lM was too high. · In December 2006 CRA staff ordered an appraisal from Anderson and Carr for the property. Per the Board's direction, all CRA purchased property must have a valid and current appraisal before it can be presented for the Board's consideration. · The appraisal valued the property at $850,000. The appraisal also noted that the improvements were becoming functionally obsolete and that the value of the property was in its redevelopment potential since is sits on the main street of downtown. · The seller was advised that the property appraised $250,000 or 23%, below the list price. After several negotiations with CRA staff, Mr. Walsh agreed to sell to the CRA at the appraised value. · The consideration to purchase the property was placed on the February 2007 CRA Board meeting agenda and passed unanimously. (See attached February 2007 agenda and minutes.) · The property is within the boundaries of the Ocean District Community Redevelopment Plan. · The Ocean District Plan calls for a mix of uses along Ocean A venue including office space. · The CRA recently contracted with an architect who specializes in adaptive reuse of historic structures. This firm will be drafting plans to convert the home into an office and will take the plan through the site plan approval, rezoning and land use change process. Staff expects the entire design and approval process to take 6 - 9 months. In the interim, the CRA staff will remain in its current location at 915 S. Federal Highway. · CRA staff will instruct the architect to investigate the potential to create a community art gallery in the building. ~?'i~i~~Y~Te~ eRA .. East Side....West Side....Seas.lde Rena',ssance If any person decides to appeal any decision made by the Board with respect to any matter considered at this meeting, he or she will need a record of the proceedings, and that, for such purpose, he or she may need to ensure that a verbatim record of the proceedings is made. which record includes the testimony and evidence upon which the appeal is to be based. CRA Board Meeting Tuesday, February 6,2007 - (Rescheduled from 13th) City Commission Chambers 6:30 P.M. I. Call to Order - Chairman Henderson Tillman II. Pledge to the Flag and Invocation III. Roll Call IV. Agenda Approval A. Additions, Deletions, Corrections to the Agenda. B. Adoption of Agenda. V. Public Comments: (Note: comments are limited to 3 minutes in duration.) VI. Public Hearing: Old Business: None. New Business: A. PROJECT: AGENT: DESCRIPTION: Proportionate Fair-share Mitigation Program (CDRV 07-001) City-initiated as per 163.3180(16), Florida Statutes Amendment of Land Development Regulations, Chapter 1.5, Article VI. Concurrency Requirements, to comply with new growth management legislation directing local governments to adopt a methodology for assessing proportionate fair-share contributions from developers to meet traffic concurrency requirements for local roads. VII. Pulled Consent Agenda Items. VIII. Consent Agenda: A. Approval of the Minutes - CRA Board Meeting - January 9, 2006. B. Approval of the Financials - January 31,2006. C. Budget Amendment - 2006-2007 #01. D. Resolution No. 06-04 - Set Reimbursement to Waypoint Marine, Inc. E. Boynton Beach Heritage Celebration Invitation. IX. Old Business: A. MLK Corridor Update. B. Dive Shop Lease Update. C. Review recommendations and responses to Transit Study RFP. D. Presentation by Northwood Renaissance for a Community Land Trust. E. Approval of Mediation Settlement for Jesus House of Worship X. New Business: A. Evaluate Alternatives to Support the City's Strategic Initiatives Against Gang Violence. B. Consideration of a Match to the PBC Development Regions Grant Program for Village Ice Cream in the Amount of $50,000. C. Consideration to Apply to the State for designation of the marina and mangroves as Waterfront Florida Communities. D. Consideration of Entering Into a Purchase Agreement with Thomas Walsh for the 211 E. Ocean Avenue Property. E. Consideration of additional staff. XI. Comments by Staff XII. Comments by Executive Director XIII. Comments by CRA Board Attorney XIV. Comments by CRA Board XV. Adjournment: MINUTES OF THE COMMUNnY REDEVELOPMENT AGENCY MEmNG HELD IN CITY COMMISSION CHAMBERS, BOYNTON BEACH, FLORIDA ON TUESDAY, FEBRUARY 6, 2007, AT 6:30 P.M. Present: Henderson TIllman, Chair Stormet Norem, Vice Chair Rev. Lance Chaney Marie Horenburger Steve Myott Guam Sims Lisa Bright, Executive Director Ken Spillias, CRA Board Counsel Absent: Jeanne Heavilin 1. Call to Order - Chalnnan Henderson nllman Chair TIllman called the meeting to order at 6:32 p.m. II. Pledge to the Flag and Invocation The board recited the Pledge of Allegiance to the Flag, followed by the invocation led by Reverend Chaney. III. Roll Call The Recording Secretary called the roll and determined a quorum was present. It was noted Mayor Taylor and Amy Dukes, Attorney with Lewis, Longman and Walker, were present. IV. Agenda Approval A. Additions, Deletions, Corrections to the Agenda B. Adoption of Agenda Ms. Horenburger moved to approve the agenda. Vice Chair Norem requested clarification that the board would be approving the agenda, which included the Consent Agenda and items could be removed from the consent agenda at this time. This was confirmed as correct. Vice Chair Norem pulled Consent Agenda Item VIII E. " 1 Meeting Minutes Community Redevelopment Agency Boynton Beach, FL February 6, 2007 Lisa Bright, Executive Director, announced Javier Camacho, from the Youth Gang Resource Center was present. Mr. Camacho had traveled from the Miami-Dade area to address the board about gang activity. She requested item, Item X A. be moved up on the agenda, in order to allow Mr. Comacho time to return to Miami-Dade area at a reasonable hour. Motion ; Ms. Horenburger moved approval of the agenda with the removal of Consent Agenda Item VIII E. being moved to the regular agenda and comments by Mr. Camacho moved on the agenda to immediately after adoption of the agenda, as Item C. Reverend Chaney seconded the motion that unanimously passed. X. New Business: - Heard out of order A. Evaluate Alternatives to Support the City's Strategic Initiatives Against Gang Violence. Ms. Bright explained at the last CRA meeting, the board was interested in suPPorting the City's efforts to deal with gang violence. Mr. Javier Camacho was present to prOVide a brief ovelView of the issue. Mr. Camacho was from Dade County and selVes on the Fourth Annual Summit for Anti-Gang Violence. Mr. Camacho thanked the board and explained he was the Program Coordinator for the Youth Gang Resource Center, which was a program funded through the Alliance for Human SelVices in Miami-Dade County, the Miami-Dade Criminal Justice Council, and Miami-Dade County. His job is to disseminate information on gar.lgs County-wide One program was the Youth Gang Resource Center, which provides parents with information to spot gang symptoms and in which he provided those outreach selVices. He advised he often speaks to community-based organizations that have parenting and life skill sessions to parents. GREAT (Gang Resistance Education and Training) provides training to Police Officers to go into the school system and discuss the issues with the students and staff. Another program funded was a hotline operated by the switchboard of Miami. This was an anonymous telephone number used to obtain information on gangs and resources available in the community. The third program, GUESS, was a therapeutic selVice that provides therapy to anyone gang involved or gang associated to assist them to leave the gang lifestyle. The fourth program was the Gang Summit. Mr. Comacho explained it was scheduled for April 13th and April 16th at the North Miami Beach City Hall. In prior years, up to 400 individuals attended the summit and this year, projected up to 500 individuals would attend this year. The summit would aI/ow for two break-out sessions. Topics that would be discussed were intelVention and prevention, and law enforcement and the federal view on gangs. , 2 Meeting Minutes Community Redevelopment Agency Boynton Beach, FL February 6, 2007 Mr. Comacho explained there was no cost to attend the summit and the registration form was being drafted. Ms. Horenburger suggested partnering with the tri-county region. She announced the federal government declared the area as a tn-county area, and she thought working together might yield a greater level of success. Mr. Camacho also announced another summit was being sponsored by the Homestead Police Department at Signature Gardens. Law etnforcement personnel, pOlice departments, community-based organizations, youth and parents and anyone else desiring to address the issue and become more informed on the topic could attend. Mr. Camacho explained the Palm Beach County Criminal Justice Commission was not directly involved with the Miami-Dade organization, but he thought it would be great to collaborate in this area. Ms. Horenburger explained, former Congressman, Hany Johnston, is the incoming chair for the Palm Beach County Criminal Justice Commission, which is engaged in five cities, including Boynton Beach. They have a gang program and Youth Violent Crime Prevention Program, which was being monitored through Florida State University. Ms. Bright announced they received a $300K unrestricted grant that would allow for program flexibility. She advised the City Manager met with neighboring cities and they were trying to harness some of the different programs. Mayor Taylor explained, he, the City Manager and the Police Chief attended a conference with the surrounding communities and compared the different programs and identified which worked the best. The $300K grant would be used for those types of programs, which could help prevent children from joining gangs.. Mayor Taylor also advised he was working on a program implemented in Los Angeles, EI Paso and San Antonio, to go after gang members themselves. The program established exclusionary zones and jf known gang members showed up in the zones, they could be arrested strictly for being there. This concept was tested in the courts and withstood legal challenges. Mayor Taylor advised he intended to ask the City Commission to review the initiative to see if they were interested in it. Examples of zones could be parks, school areas, shopping centers and others. The same concept applied to sexual predators. Chair Tillman asked about the effectiveness of the awareness programs. Mr. Comacho explained the more they were out in the community and promoting the programs in the schools, the more phone calls they received about therapeutic services and the more attendees they had at the summits. Mr. Comacho explained they received referrals from the Miami-Dade Juvenile Services Department, and the office of Juvenile Justice Delinquency. He announced the daily programs that were in place were a tremendous success. Prevention programs, such as Project IMPACT and Panzou, were specific to the location of the gangs. The Panzou Program catered to the Haitian community. He clalified gang F 3 Meeting Minutes Community Redevelopment Agency Boynton Beach, FL February 6, 2007 problems can be specific to areas. Through these programs, parents or community organizations could also receive training by attending life skills or parenting sessions. On the job training is also provided in some of the programs. Chair Tillman reported at least four cities have been involved in meetings on the issue, which were Delray Beach, Lake Worth, Lantana and Boynton Beach. He expected to hear what direction they wanted to go in the sub-district; part of the county and thought the collaboration would enhance the success. He thanked Mr. Comancho, the CRA staff and Miami-Dade County for putting forth the information. He requested staff keep the board apprised of information from the City Manager's office. V. Public Comments: Herb Suss asked whether there was a meeting held this morning with the City Manager and Intown Development. Ms. Bright responded there was no meeting with the City Manager. Mr. Suss indicated that between Intown and the other developer, they had reported they had $60M of New Market Tax Credits nationwide. He indicated $40M was in the hopper and $20M was left: nationwide. He thought the CRA should take this under advisement before entering any situation with Intown. Mr. Suss asked whether Intown had issued a financial statement. Chair Tillman responded that information would be addressed later in the meeting. Mr. Suss spoke about the gang violence issue. He asked whether the eRA could get more money and suggested the old Civilian Conservation Corps (CCC) program as an alternative. He explained the CCC program, during the 1930s took people and put them to work. He thought some of those programs could be tied to gangs if they could reach out and give them some type of training. He advised there were federal programs for this. He thought gang violence was a national epidemic. Kevin Ballard, 550 NW 13th Avenue, spoke about the gang violence issue. He indicated he did not see gangs In the area where he lived. If the City Instituted zones, he was concerned about the definition of the term gang member. He asked if he was talking on the comer, whether he would be designated a gang member. Chair Tillman explained people would be taught exactly what the issue was before they instituted anything. He did not want the effort to backfire and further indicated the more educated people were, the more likely it would diminish gang movement. The board noted gangs were a national problem. They noted they moved around and thought it would behoove the City to partner with surrounding areas and have a unified effort. VI. Public Hearing: .. 4 Meeting Minutes Community Redevelopment Agency Boynton Beach, FL February 6, 2007 Old Business: None New Business: A. PROJECT: Proportionate Fair-share Mitigation Program (CDRV 07-001) City-initiated as per,163.3180(16), Florida Statutes Amendment of Land Development Regulations, Chapter 1.5, Article VI. Concurrency Requirements, to comply with new growth management legislation directing local governments to adopt a methodology for assessing proportionate fair-share contributions from developer;s to meet traffic concurrency requirements for local roads. AGENT: DESCRIPTION: Hanna Matras, Planner for the City, presented the item. She advised the board the State was requiring all local governments in Florida have a program for traffic concurrency. They missed the December I, 2006 deadline because the Department of Community Affairs (DCA) was not clear whether the City would fall under the purview of the County, who was in charge of traffic concurrency programs. This item would add Article 8 to Chapter 1.5 and amended Concurrency Requirements, Chapter 6. The program provided a methodology for developers, when they added road capacity over the adopted Level of" Service (LOS) to pay its share towards improvements of the impacted facilities. Ms. Matras clarified this only applied to local roads, not roads that fell under county and state jurisdictions. The City needed to review. concurrency. It was also clarified the program would exclude Traffic Concurrency Exception Areas. Motiol! Ms. Horenburger moved to approve the request. Vice Chair Norem seconded the motion that unanimously passed. VII. Pulled Consent Agenda Items. VIII E. Boynton Beach Heritage Celebration Invitation Kathy Biscutti, Special Events Manager, praised the CRA staff for their dedication and advised she started with the CRA as an Event Consultant. She reported she made a commitment to create memorable events, which would drive attendance downtown and encourage relationship with developers that would be a base of sponsorship in years to come. Her experience with the City was lacking. Ms. Bright reported there had been emails circulated regarding funding and funding for an additional event. She reported the CRA had worked for nearly a year on an Interlocal Agreement with the City and had agreed to coordinate with the City on special events. These special events were the Pirates of the Intracoastal, the Holiday Extravaganza (the ~ 5 Meeting Minutes Community Redevelopment Agency Boynton Beach, FL parade and the concert), the Medieval Faire and the Heritage Celebration. Ms. Biscutti was a shared resource between the City and CRA for these events. Febl1lalJ- 6, 2007 Ms. Bright explained at the last minute, an event was proposed by the community for Heritage Fest. The City Manager was approached for funding, and he approached Ms. Bright. I Ms. Bright explained she was made aware of the event on January 9, 2007. The event was originally conveyed to have a cost of $3K. The cost, however, was then clarified to be $20K, which was not under Ms. Bright's authority. The celebration was suPposed to be a joint City/CRA event as outlined in the Interlocal Agreement. Since the request came between meetings, Ms. Bright asked the Chair to intervene on behalf of the board. The neighborhood community request was an unexpected event. Mr. Myott noted the event sounded like a great idea but thought the issue was whether the CRA could afford it. Chair 1illman explained he met with the City Manager. City Staff was working on the event for a year and when the CRA became involved, they got involved in funding and personnel. He explained last year there was a major issue when n event was sponsored and it rained. They made sure they would have signature and better events this year, which occurred. He explained recently, an event was added that did not involve a cost, and then a cost was attached to it. He indicated the CRA does not conduct business that way The board discussed advertising the event and noted the marketing of the event was entirely different this year than in prior years. It appeared the Interlocal Agreement had been fragmented significantly. Mr. Sims asked if the partnership had improved. Ms. Biscutti reported it was totally frustrating, at best. Ms. Bright explained the Interlocal Agreement was a partnership arrangement and the City and CRA staff were to handle the issue. Ms. Bright explained the City Commission was looking for a return on investment to bring the people to the downtown area. Ms. Bright also indicated she met with a developer who indicated as part of his project criteria he would include a $lM budget specifically to bring people to the downtown area strictly for the events on ongoing basis. Ms. Bright explained Ms. Biscutti has had to work through a framework where all the entities had budgets. She noted the event was a large multi-cultural event and the CRA was suPPOrting it. But, the request was a last minute addition from the neighborhood. She indicated last year they were approached at the last minute to contribute $25K, which they did, but the result was the CRA had to cancel events. The two events in question were the Super Weekend Welcome Reception on Friday night and the Gospel Concert on Sunday night. Mr. Myott noted the reception Invitation already went out and then proposed splitting the cost with the City and doing better next year. Vice Chair Norem seconded Mr. Myott's comments. ~ 6 Meeting Minutes Community Redevelopment Agency Boynton Beach, FL February 6, 2007 Ms. Bright thought there were two issues at hand. One was to get though the event. The other issue was to look at the Interlocal Agreement and how the process worked. Ms. Horenburger thought the issue was not planned, and each entity was operating on a different page. Robert Reardon, Assistant Director, advised there \o/ere funds in the Contingency Account, but he did not think the expenditure would be approved by the auditors. He advised he had no idea, specifically, on what the funds would be used for and he did not know if the issue was bid out. He suggested, after this event, the CRA consider abandoning the Interlocal Agreement. He reported the issue has become a nightmare for Bill Mummert and himself and he has no purchase orders for anything. Bills for the Pirates of the Intracoastal were still coming in four months after the event. He explained the City staff has been putting on the events for years and Ms. Biscutti has been cut out of the loop. He would rather see the CRA just give the money to the City and the CRA bow out of it. He explained when the budget was adopted, $50K was committed for Heritage Fest. He explained the request was not just for the additional $23K, it was actually $55K and with all the events combined, the entire budget was now $1701<. The CRA would be paying $1001< and they do not have it. Mr. Reardon suggested holding one event in the future. Mr. Reardon emphasized he was real nervous about how the extra costs have come about, and how they could be justified to the auditors. He indicated he was not sure if he could issue a check to the Finance Department. He explained a special account has not been set up in the City for the City and the CRA to fund and for Ms. Biscutti to control. Ms. Biscutti explained she had no information on the event. She reported she had been asking for the names of the speakers and the name of the gospel group for more than a month, and did not receive it. Reverend Chaney thought $l71K seemed extravagant. and paying 1<001 and The Gang $65K was outrageous. He wanted to know who negotiated the price. He explained the group has not had a hit in 15 years. Ms. Horenburger explained other requests came in and additional events were added on top of that. It was also noted the event in question was a duplicate event. Vice Chair Norem removed his second. Margie Adelsperger, Marketing and Communications Director, discussed the Interlocal Agreement and reported it diluted the CRA's message. She explained it was a challenge, working with different City departments on developing different logos, tag lines, flyers, posters and street signs because they do not have cohesive agreement on how it should be done. It has been done on a compromise basis. She advised that was her biggest concern . Chair .TIllman indicated many of the issues need to be addressed on a higher level, and announced the CRA is not able to move forward with the request for funds. He thought after the event was over, the amount of monies expended might even be higher. He " 7 Meeting Minutes Community Redevelopment Agency Boynton Beach, FL February 6, 2007 reported although the agreement started in earnest, this happened last year and a pattern was established. Ms. Bright indicated Ms. Biscutti indicated the eRA would diligently work with the City for 2008. VIII. Consent Agenda; A. Approval of the Minutes - CRA Board Mee~ing - January 9, 2006 B. Approval of the Rnancials - January 31, 2006 C. Budget Amendment - 2006-2007 #01 D. Resolution No. 06-04 - Set Reimbursement to Waypointe Marine, Inc E. Boynton Beach Heritage Celebration Invitation IX. Old Business: A. MLK Corridor Update Ms. Bright explained there have been meetings on the MlK COrridor, which included Torti Gallas of Torti Gal/as and Partners, and the firm of McCormack Baron Salazar. Ms. Bright explained when the City came to the table, all the partners were present. She announced Mr. Baron acknowledged he had considered some of the staff concerns that the market had shifted significantly and It may be difficult to sell market rate units on MlK regardless of the financing. Ms. Bright reported Attorney Spillias fOlWarcfed a development agreement to Intown for review. She advised they were working towards bringing an agreement back to the board on March 13,2007. Attorney Spillias summarized the board's prior directive, that he review contracts and other documents to demonstrate the level of land control Intown had to date. He advised he had reviewed those dOcuments immediately prior to the meeting. He could ascertain in the MlK Corridor there were a number of contracts. He advised Some of the contracts date to 2005, and one from 2004, that Induded addendums extending dosing dates. The most recent addendum extended to the execution of a tripartite agreement and he pointed out some documents were not fonnal letters of intent. They were property owners indicating they wanted to sell to Intown. He also commented Some of the contracts were not complete, or needed to be signed. Attorney Spill/as reported his calculations of the properties that were under control or contract with Intown, or there was a letter of intent, or were represented as being in heavy negotiation with, amounted to about 6.6 acres of the area, which equated to slightly over 25% of the project area. ... 8 Meeting Minutes Community Redevelopment Agency Boynton Beach, FL February 6, 2007 Of those properties that were under contract with the closing date addenda, those calculations equated to approximately 14%. Properties under contract, plus the letter of Intent, calculated to be between 16% and 17%. Attorney Splllias advised that on February 1, 2007, the parties agreed there would be a schedule of tasks to be completed. The initial task was to review the contracts. The second task was to convey the information about the results. The third issue was to provide a status on the development agreement. Attorney Spillias announced! comments were receivecl back and incorporated into the next version of the draft. He suggested, if the board wanted to move forward with the agreement to have it ready for the March 13, 2007 meeting. There were key dates, which needed to be met, and he suggested holding a workshop on February 15, 2007. The purpose of the workshop was to present the draft agreement as it existed at that point in time. There would be blanks that needed to be filled in by the CRA and the developer. There would be provisions that he would need policy guidance on. Attorney Spillias advised after the workshop, those comments would be incorporated into the development agreement. He also explained it was hoped they would have received comments from the developers before the wOrkshop. The CRA would like a new draft from the developers by February 26, 2007, with the agreement returned by the developer and received by the CRA no later than March 5, 2007, with a final product by March 13th. The board discussed items the CRA asked for at the last meeting. Attorney Spillias explained they received the contracts. He indicated with regard to the joint venture agreements, or partnership agreements with the partners, which were McConnack Baron, Torti Gallas, and Intown, they had not received those. Attorney Spillias explained he made It clear that he would recommend the CRA not enter Into any agreement that was not an agreement with an entity or entities that puts all three of those entities on the line. Mr. Baron had indicated to him that prior to presenting the agreement to the board for approval, they would have their partnership agreements in place. For the immediate moment, however, the agreements were oral and not written. Ms. Horenburger asked if it was possible to enter into an agreement, contingent upon receiving the written agreements being put in place within a certain, short amount of time, and If not, then the agreement would be null and void. Attorney Spillias responded the board could proceed that way, but his counsel would be to have them in place prior to executing the agreement. Ms. Bright commented since staff had not met with McCormack Baron or Torti Gallas, with the exception of the initial presentation, it was apparent to staff that they had not conducted due diligence in the community. They were not aware of zoning or other factors. They were not knowledgeable about Boynton Beach, and the restrictions they had in place. Samantha Simons, Intown Development, explained her group knew they needed a comprehensive plan since they started the project over three years ago. She reported Torti Gal/as knows they need to file it by August 15th and with the increase in workforce housing needs, the density needs to be changed. She reported the project was making " 9 Meeting Minutes Community Redevelopment Agency Boynton Beach, FL February 6, 2007 progress, they were working through some of the negotiations and they would have a Joint Development Agreement in place prior to contracts being signed. Ms. Simons clarified in reference to the New Market Tax Credits, Mr. Baron has proportioned those credits aside for the project, which help buy down retail opportunities in the project area. She explained the allocation of New Market Tax Credits was $60M, and that was discussed in the RFP. The figure, she advised, had not changed. Ms. Horenburger asked what densities were being discussed in the meeting. Ms. Simons explained what was presented in response to the RFP was 10.8 dwelling units per acre. Nancy Byrne, Assistant Development Director, explained they met with Torti Gallas, about the Heart of Boynton Plan. If the issue of density comes up, that would be the only point they would make in the d~velopment agreement now. She explained, the plan would need to be presented to the community first, and then the appropriate land changes would take place once it has been formally adopted by the CRA. Ms. Horenburger asked if changes in density were minimal, if the project was still feasible to the partners. Ms. Simons responded they needed to look at all aspects of how they would plan and adopt a plan that worked for everyone to make it a Win-Win for all parties. She explained she thought they were close and suggested crossing that bridge when they got to it. Ms. Horenburger asked what percentage or portion of the tax credits were committed to the project. Ms. Simons explained the Tax Credits were an annual allocation. The next round may have additional tax credits. She could not speak on Mr. Baron's behalf, but she felt he would set aside a proportionate amount. Ms. Bright noted at the last City Commission meeting, she was asked why the CRA was not supporting the 175,000 square feet of commercial space for Seacrest Village. She clarified the retail analysis the CRA had conducted with Howard Kohn, and Metropolitan Planning Council pOinted out 3,000 homes were a minimum to support that amount of retail. The Metropolitan Study, by Florida International University, showed the housing needs assessment pointed out the average income was $26,000 and retail would not change the economic dynamics in the area. She wanted the board to note the City Commission had a concern about that, and that decisions were being based on those studies. She announced the CRA did not think, based on the Congress Avenue and Woolbright corridors that neighborhood retail was the appropriate venue for that area. Mr. Sims asked why the three pieces of information they had requested were not received. Ms. Simons expressed it was her and the partners' understanding, they were supposed to have the contracts submitted and then have 60 days to provide the other information. At the meetings with the City and CRA, they discussed having those items with the agreement. She thought the cart was being put before the horse. They would be more ~ 10 Meeting Minutes Community Redevelopment Agency Boynton Beach, FL February 6, 2007 than happy to present the joint development agreements before the execution of the contracts. Mr. Sims read a portion of correspondence from the CRA attorney that indicated Intown was seeking to submit the document to a neutral third party. He pointed out if the letter was referencing the Oty, the City was not a neutral party. He wanted to know specifically, who was the third party. Ms. Simons explflined Mr. Baron was perturbed that properties were being negotiated by the CRA before a tripartite agreement was executed, and a joint conclusion reached. If the CRA was seeking appraisals, there should be coordination and communications about said properties to avoid a bidding war. Ms. Simons indicated they were trying to find a neutral party, but the issue was not moot and they shared the contracts with Attorney Spillias anyway. She reported with the City and CRA property, Intown advised a total of 43% of the project area was secured. Attorney Spllllas explained at the February 1, 2007 meeting, there was a concern the CRA was still negotiating for properties. A process for purchasing property in the MLK Corridor had been put into the draft agreement. The process was the developer would make every effort to purchase property, and only if there was difficulty purchasing a property, they would advise the CRA and the City, and identify the property. They would also provide any offers made and appraisals and then they would go forward. The issue was raised because Ms. Bright had ordered an appraisal on one of the properties in the MLK corridor. Ms. Bright explained at that time, she made it very clear to all at the table, that no negotiation or conversation had been held. The only thing that occurred was an appraisal was ordered and has not been received. Ms. Bright explained the previous attorney for Intown, Lee Worsham, was present at the meeting. The CRA felt they had missed the opportunity on the Jefferson Estate because they were not prepared. At the December 12th meeting, she explained it was made clear to her that If there were missed opportunities, and If funding were available, ultimately Intown would be the beneficiary of whatever land was purchased. The statement given to Ms. Bright, by Mr. Arthur DrA/melda, the Estate Attorney for Bob Katz, was that he was unsuccessful with striking a deal with Intown Partners on the two parcels on MLK, and would they be able to negotiate. Ms. Bright advised she would be happy to get an appraisal and would follow up with him. She ordered the appraisal on January 19, 2007 and it has not been received. She informed Intown she was ordering the appraisal, and that she was directed by the board to order an appraisal for the Defray/Boynton Academy. Ms. Bright referenced a letter from the first meeting on September 20, 2007 with Intown Partners. She explained those issues were items they were dealing with for a comprehensive strategy back then. The CRA was Intowns partner. She explained they were trying to follow a protocol that changed daily and they do not buy land there. Attorney Spillias pointed out, the parties recognize that if they are all out in the area, doing their own negotiations, it gives purchasers the opportunity to play one off the other. They do not want prices increased for Intown or the CRA. He commented he " 11 Meeting Minutes Community Redevelopment Agency Boynton Beach, FL February 6, 2007 was disturbed at the letter as well. It appeared the Issue keeps coming back there is a fear the CRA Is negotiating deals and It was governing the conduct. Attorney Spilllas receiVed the letter by emall earlier in the day but was allowed to review the contract prior to the meeting. Mr. Myott left the meeting at 8:15 p.m. Reverend Chaney was concerned about the ownership of the property. The total property between Intown, the CRA and the City was approximately 43%. Vice Chair Norem was disturbed by the letter. He expressed his thoughts there WOuld not be an agreement ready next month and thought changing attorneys and delays were a pattern. He was ready to change and indicated if there was no draft, how could the board vote on it. Chair Tillman Indicated the situation did not look good as a groWing Oty. Over the PiISt eight months, over $SOK was spent on legal fees. He indicated the CRA needs to do bUsIness In a viable public way and they are entrusted to do so under state statute. He asked for a motion to end this. Ms. Horenburger spoke about her comments In prior minutes about contractual agreements, which explained there would be a development agreement by March 13, 2007. Her feelings were there was a pattern to make public statements and not give clear answers to very speCific questions. She clariffed the vote was to have a March 13, 2007 deadline. She aCknowledged the relationship deteriorated significantly and she did not know why. She was not sure this was the time to end the matter. Mr. Sims was disturbed with the letter, particularly alter so much momentum was gained with the tripartite agreement. He asked the board to maintain its Integrity and its wort< and honor the March 13, 2007 deadline. He expressed he was doubtful the agreement would be reached by then. He thought the CRA was being incredibly patient. Vice Chair Norem pointed out there were certain items that had not been delivered. He was unsure of when to draw the line. ReVerend Chaney concurred It was unfair to board counsel to receive documents at the last minute and thought It created an adversarial role. He agreed with Mr. Sims, that Attorney Splllias needed to adequately review the documents and then Properly advise the board. He has received partial reports and if requested Information could not be receiVed by the agreed on date, the CRA should be properly apprised as OPPOsed to learning about It at the last minute. He expressed frustration they had asked direct questions and had not received direct answers. He expressed the CRA wanted the project to proceecf with fairness and integrity, but the CRA was not getting the straight answers it needed. There Was consensus from the board to wait until the March 13, 2007 meeting to discuss the issue. " 12 Meeting Minutes CommunIty Redevelopment Agency Boynton Beach, FL - Attorney Spilllas Indicated they would hold a workshop on February IS, 2007 to review the work Product In terms of policy decisions and In anticipation of a final contract. ThIs Would give him the information he needed to properly review the draft. He also indicated he brought Tara DUhy, a contemporary from Lewfs Longman and Walker, P.A. into the arena so there WOUld always be two knowledgeable individuals available tD advise the board in the event he was unavailable. February 6, 2007 Moticm Ms. Horenburger mOVed to hold a workshop on February IS, 2007 at 6:30 p.m. Vice Chair Norem seconded the motion that unanimously passed. ' Herb Suss requested to speak. Chair TIllman explained there was no public comment on the item. B. Dive Shop lease Update Ms. Bright reviewed the Item. staff wanted to terminate the lease on December 31st In order tD renovate the restroom at the marina. The goal was to create an interim lease until the construction plans and other issues would be finalized. Ms. Bright explained a long-term lease keeps coming back from Ms. Simmons COunsel detailing long-term Issues that the CRA was not prepared to address at this Juncture. Ms. Simmons was currently paying $1.36 per square foot for their space, versus about $17 per square foot. The commitment was to build the public restrooms and the CRA spent $7,000 trying to negOtIate a lease. Ms. Simmons was present to discuss the Issue with the board. Ms. Bright darified Ms. Simmons needed to have a lease In place in order for her to be able to operate as a dive shop. Lynn Simmons, 700 Casa Loma Bouievard, announced she was the owner of the dive shop. She reported she was unsure how they WOund up in an adversarlal POSition and thought the lease was progressing well. She agreed attorney fees were becoming unreasonable and announced she had agreed tD a one-page lease, which has evolved into a 10 page lease. She agreed to paying rent. Ms. Simmons advised she had a problem with two issues. She reported the bUSiness had become, because of the location and surroUnding activities at the site, more than a dive Shop. Over the last three years, she Provided the public access to restrooms, she accepts and delivers deliveries and she Is Open all year from 7:00 a.m. to 7:00 p.m. She reported until the public restrooms are complete, there were no fad/itles for charter boats and others to use. She apprecjated the board trying to work with her and she expressed her desire to WOrk with the board. She further announced she has been at the marlna for 24 years, and the business has grown from a miniscule business to the biggest dive operator In the Oty. She was not SUre what to do about the lawyers. Mr. Sims discussed two items. One was Insurance. Ms. Simmons diSCUSSed Item 24 of the lease, which indicates she has a $2M liability insurance policy, but the lease is or 13 Meeting Minutes Community Redevelopment Agency Boynton Beach, FL February 6, 2007 requIring her to pay property insurance of $5001<. She does not OWn the property, and her insurance agency indicated the property owner should be paYing the property. insurance. Amy Dukes, attorney for the CRA explained that was not correct and she WOUld need to review it. She thought the Item could be remOVed. Ms. Dukes, also indicated the 10 page lease was proposed by Ms. Simmons attomey, not /he CRA. Ms. Dukes clarified the CRA was interested in offering an Interim lease, not a long term lease because they did not know what the faCility would lOOk like until they got in there and commenCed renovations. The secOnd Item had to do with the prohibition of sale of food. Ms. Simmons announced she had no objeCt/on to the addition of this Item in the second lease, but not for the first. Ms. Simmons had been providing the Marina Village construction crew With fOOd and beverages. Ms. Bright explained the food being sold in open containers was against CRA policy. She commented she SPoke with the boat owners and they preferred she offer pre-packaged food and SOda outside in a vending machine. Ms. Simmons had no objections to the request. She reported fOOd in open containers had been eliminated. Attomey Spillias explained it appeared there was a disconnect between Ms. Simmons and her attorney. He suggested having a meeting with a CRA representative, Ms. Simmons and her counsel. Ms. Horenburger asked about the size of the dive shop and how the leasing rate Was established. Mr. Reardon explained the rate was inherited from Two George's, but the CRA owned the property. Mr. Reardon explained as a government entity, they do not pay taxes on the property, but when the space is leased, taxes WOUld be paid, but he did not know how much the taxes WOuld be. He explained he submitted a report to the County on January 15, 2007 outlining what leases they had on the bUilding and advised next year they would be subject to property tax. Mr. Reardon asked Attomey Spllllas if before any space was 'eased by the CRA, whether they had to publish announcements in the newspaper, annOUncing the leasing of space in order to allow another dive shop to opt to pay the regular retail price as oPPOSed tD the $1.36 per square foot interim amount. Mr. Reardon reported he read the requirement in the Rorlda statutes and he was unsure if they could continue the matter without doing so. Attorney Spillias clarified the issue was in some respects, a continuation of the eXisting lease which ended With Two George'S. Attorney Spllllas clarified when the CRA Purchased it from lWo George's they became Two George's sUCCessor. He did advise they would need to publiSh for the long-term lease, but not for the interim lease. ,. 14 Meeting Minutes Community Redevelopment Agency Boynton Beach, FL February 6, 2007 Mr. Reardon clarified for the record, there was a men's and ladles' bathroom at Two George's. Ms. Horenburger thought the temporary lease should reflect a Cost and assessmen~ and an in lieu of tax fee. She clarified the CRA did not know how mUch taJc WOUld be owed and this year the taxes WOuld be increasing. She suggested obtaining the infonnatlon from the Property Appraisers office and that the Item be continued to the next meeting. She thought the calculations COuld be built into the lease. , Ms. Bright indicated staff could prepare the market rate calculation and a taJc rate calculation. The lease was a hold OVer on a month-to-month basis. Ms. Bright explained the Interim iease was to cover the time the CRA StDff was going to evaluate, with their construction contractor, how long the renovations would take. Ms. Simmons already agreed to move to a temporary site, and at that time, a .new lease would be negotiated. The board suggested having the attomeys consult on the malter. C. Review recommendations and resllOnses to Transit Study RFP Ms. Brooks, Planner read the item and explained there is a Transit Concurrency Exception Area, (TCEA) within the eRA, which allowed them to redevelop without having to run Into Level of Service issues. Two major requirements of the TCEA with the County's approval was the CRA would provide 5% affordable hOllSing of all new development and conduct a transit study. The CRA staff did not think they needed the study, but the County did not agree, so an RFP was Issued. She reported Hanna Matras, Economic Planner for the Oty, who also WOrks with the County on traffic Issues, received three Proposals. Staff reviewed the proposals and recommended PBSl be selected based on their experience with transit studies. Moticm Ms. Horenburger moved for approval. Vice Chair Norem seconded the motion that unanimously passed. D. Presentation by NorthWOOd Renaissance for a Community land Trust Ms. Brooks explained there was Prior disCUSSion about land trusts. She rePOlted they were develOping Products to have more affordable units in the market. Examples of those were down payment aSSIstance and rehabilitation programs, and the WOrkforce HOUSing Ordinance. She explained they addressed the mOderate-income Category but not the lOW-income category. She explained with a Comprehensive HOUSing Po/icy, they needed a tool for the very-low and fow.-income families. A Community land Trust was a very 900d tool for that because It allowed for individuals who could not otherwIse OWn a home from being precluded from owning a home and receiVe the tax benefits and eqUity benefits that are established through a land trust. Scott KlIne, NorthWOOd Renaissance, explained their mission was to Put homes within reach of WOrking families in Palm Beach County and to Improve neighborhoOds through a holistic approach. The organization Incorporated In 1992 and sought to proVide business and Job creation In the NorthWOOd Business DIstrict. In 1998 they expanded .. 15 Meeting Minutes Community Redevelopment Agency Boynton Beach, FL February 6, 2007 their focus to address the affordable housing issues in the City of West Palm Beach. In 2005, their services expanded to encompass County-Wide issues. The organization received the Bank of America Neighborhood Builders Award. In 2005, they were named as USK Community Development Champion and they were also presented with the 1000 Friends of Florida Community Steward Award. They prided themselves on their successful track record in obtainingl competitive grants and loans. They recently received $2.3M Federal Home Loan Bank's Edge Program for the Village Center project. They also received $9M in housing tax credits from the Florida Housing Finance Corporation to build 84 workforce rental apartments. In 2005 they received Citibank's Partners in Progress Award. The traditional solution was to provide public subsidi~s to an income-qualified buyer to bridge the affordability gap. The gaps, he commented, were becoming cost prohibitive. Not only were the subsidies not deep enough, but the homes were not being kept affordable. The primary benefits of a community land trust was public subsidies would be preserved and the trust would maintain the affordability of the home for future generations. The concepts of the land trust were they are driven by a community based non-profit entity, governed by a volunteer board representing the community's interest. The long-term control of the land is placed in the hands of the local community and the land trust ensures affordability, using a 99-year ground lease with the home buyer. Mr. Kline explained depending on how the trust was set up, the community land trust removed the cost of land from the equation and then reaches the buyers. Resale prices are restricted but the homeowner would still realize a reasonable return. They would only sell the home to income-qualified buyers and the trust had .the first right of refusal upon foreclosure of the homes. Northwood has constructed and rehabbed 30 affordable housing homes and assisted a family to become a first time homeowner. They offer an alternative to renting. The largest segment of the workforce and low-income wage earners would never be able to own their own home without substantial subsidies. There is a non-stable rental market. The trusts provide stable living environments. He apprised the board over the last year, Palm Beach County lost of 14,000 rental units to condo conversions and the remainder of the rentals were higher end. The trust leverages public dollars and added value. Mr. Klein reported last year, more workers moved out of Palm Beach County than moved in the County and indicated the trust would help sustain local economies. He advised over the next few years, more than lOOK affordable units would be needed and having affordable units helps to sustain and attract businesses. They revitalize distressed neighborhoods, replaced ugly vacant lots in blighted areas and constructed homes that compliment the neighborhood. Ms. Brooks thought this would be a good tool to add to the other tools the board has instituted in the last year. She reported they were one of the few CRA's conducting these types of efforts and she commended the board for their foresight. She recommended staff begin negotiations with Northwood Renaissance. or 16 Meeting Minutes Community Redevelopment Agency Boynton Beach, FL February 6, 2007 Ms. Bright explained this was a property management tool. It was suggested Ms. Bright also contact the Delray land Trust, but it was ascertained they did not have the level of interest Northwood had. Motion Vice Chair Norem moved to begin negotiations with Northwood. Reverend Chaney seconded the motion for discussion. Reverend Chaney asked about land trusts and if other land trusts had expertise. Ms. Brooks explained the Delray land Trust was brand new, the County was forming one, but it was not up and running yet. She explained there was much more to a land trust than forming a corporation. She thought It behooved the board to work with entitles that were familiar with non-profit housing. She announced the Northwood Renaissance staff had access to subsidies that large non-profit developers did not. Ms. Brooks expressed this entity had the most experience in this area and further expressed government entities do not have access to many subsidies. Ms. Horenburger asked if they entered into an agreement if it would be for long term. Ms. Brooks recommended making the agreement renewable based on performance and also recommended a percentage of land they purchase be put into the trust. The land needed to remain affordable. Ms. Murray, Executive Director, explained they work collaboratively with all land trusts. She assured the board, their mission was to preserve housing. Ms. Horenbuger thought if they entered into an agreement, they should have the ability to transfer the land from one trust to another if they wanted. llQB A vote was taken and the motion unanimously passed. Attorney Spillias explained his firm represents the Northwood Renaissance CDC. Ms. Bright indicated they could use other counsel. Attorney Spillias agreed and commented as long as both lawyers had a waiver, all should be fine. E. Approval of Mediation Settlement for Jesus House of Worship Attorney Spillias indicated there was a mediation session and a settlement proposed. He indicated the matter could be diScussed openly, or if not, he suggested holding another Executive Closed Session. He suggested if an Executive Session was held, to hold it on February 15, 2007 before the workshop. At that time, he would explain the issues and if all the questions were answered, the board could vote on it that night. There was no deadline. Attorney Splllias preferred to hold a special meeting. Attorney Spillias announced for the record he was looking for gUidance with regard to settlement and cost of litigation in Boynton Beach CRA vs. Jesus House of Worship, Case No. 502005CA004252XXXMB in the 15th Judicial Circuit in and for Palm Beach County. It 17 Meeting Minutes Community Redevelopment Agency Boynton Beach, FL February 6, 2007 The attorney client session would be at a special meeting at 6:00 p.m. on February 15th in Chambers, to be attended by the board, The Executive Director, and Legal Counsel. Motion A motion was made by Ms. Horenburger to hold executive closed-door session. Vice Chair Norem seconded the motion that unanimously passed. X. New Business: A. Evaluate Alternatives to Support the City's Strategic Initiatives Against Gang Violence. Ms. Horenburger Indicated there was a task force in the Sheriff's Department and they were short personnel. She did not know whether the Oty had a Police Officer on the task force. She thought they should explore whether the shortfall in personnel was due, in part to the City and if so, to consider funding an additional Police Officer to become involved in the effort. Reverend Chaney asked if two members of the board served on the board, whether a Conflict of Interest existed. Ms. Bright explained as long as the meeting was noticed, there were minutes taken and the members did not discuss the issue among themselves outside of the meeting, there would be no conflict. B. Consideration of a Match to the Palm Beach County Development Regions Grant Program for Village Ice Cream in the Amount of $50,000 " Ms. Brooks explained the CRA particIpates in the above program, which encouraged new and existing businesses to expand. The program provides a grant of up to $50K from the County and requires a match from the local municipality or the CRA. She announced Village Ice Cream Cafe applied for the grant and recently purchased space at Marina Village offering hand made ice cream and other confections. Ms. Brooks recommended supporting the application and recommending it for funding. She noted the applicant has closed on the property and the funds were budgeted. Motion Ms. Horenburger moved to approve the request. Mr. Sims seconded the motion that unanimously passed. C. Consideration to apply to the State for designation of the marina and mangroves as Waterfront Florida Communities. Ms. Brooks explained this was a State program designed to preserve and enhance existing marinas and keep them as working marinas. Many marinas were being lost to condominium construction and the State was attempting to preserve the traditional and marine related jobs in the community. The measure was also an economic development initiative. If the City received the designation, they would receive up to $50K to plan for improvements to the marina. " 18 Meeting Minutes Community Redevelopment Agency Boynton Beach, FL February 6, 2007 Motion Ms. Horenburger moved to approve the item. Vice Chair Norem seconded the motion that unanimously passed. D. Consideration of Entering into a Purchase Agreement with Thomas Walsh for the 211 E. Ocean Avenue property Ms. Bright explained over a year ago, Ocean Avenue was designated as the downtown pedestrian core. The subject property was across from Kenny's Market Place, and eRA staff negotiated a purchase agreement for $850K. The CRA would like to purchase the property to activate redevelopment Motion Vice Chair Norem moved to approve the purchase agreement. Ms. Horen burger seconded the motion that unanimously passed. E. Consideration of additional staff. Ms. Bright explained staff was overworked and needed two positions; one in the administrative area and the other in property management. She informed the board the positions were in the budget. She reported they were buying quite a bit of property and they needed a person in Property Management. She explained no matter how bleak the market, they were always looking for individuals to purchase land. The property management position would be about $70K and the administrative position in the mid $30K range. Reverend Chaney requested an organizational chart, and a personnel plan indicating what they have for the budget, what positions they had, what they were projecting and future projected positions. Ms. Bright pointed out there were some vacancies that were not filled that were absorbed by staff. There was consensus to fill the vacancies. Attorney Spillias advised there was no vote needed. Xl. Comments by Staff XII. Comments by Executive Director Ms. Brighter reported Arthur Slavin, 500 Ocean Plaza, indicated to Ms. Bright he has documents due. He was supposed to submit documents in 90 days. Ms. Bright announced they would bring something back next month. Ms. Bright announced Palm Beach County Days were on March 6, 7 and 8th and she would make arrangements for members wanting to attend. Those interested should let her know. .. 19 Meeting Minutes Community Redevelopment Agency Boynton Beach, FL February 6, 2007 Ms. Bright thanked Mr. Reardon for his efforts and for the photos of the Heart of Boynton (HOB) Beautification Day. The motto was Neighbor Helping Neighbor, sponsored by the CRA and St. John Missionary Baptist Church. Mr. Reardon gave a Powerpoint presentation about the HOB Beautification Day. Reverend Chaney commented 150 volunteers showed up for the Beautification Day and it was one of the best events he attended.' Ms. Bright indicated she was working with Mr. Reardon to show the board what projects were cancelled and the potential unrealized TIF funds. The information would be brought to the next meeting. XIII. Comments by CRA Board Attorney None. XIV. Comments by CRA Board None. XV. Adjournment There being no further business to discuss, the meeting properly adjourned at 9:35 p.m. Respectfully submitted, ~ r:J.w~1iffl11 Catherine C rry-Guberman Recording Secretary 020706 '. 20 APPRAISAL OF 211 EAST OCEAN AVENUE 1,736 SQUARE FEET OF IMPROVEMENT ON A 13,945 SQUARE FOOT SITE BOYNTON BEACH, FLORIDA THOMAS D. WALSH FOR BOYNTON BEACH CRA C/O VIVIAN L. BROOKS, PLANNING DIRECTOR BY ROBERT B. BANTING, MAl, SRA STATE-CERTIFIED GENERAL REAL ESTATE APPRAISER RZ4 AND MICHAEL J. BRADY STATE-CERTIFIED RESIDENTIAL ESTATE APPRAISER RD3648 WITH ANDERSON & CARR, INC. 521 SOUTH OLIVE AVENUE WEST PALM BEACH, FLORIDA 33401 DATE OF VALUE: DECEMBER 7, 2006 DATE OF REPORT: DECEMBER 13,2006 FILE NO.: 260731.000 ROBERT B. BANTING, MAl, PRESIDENT State-Certified General Real Estate Appraiser RZ4 FRANK J CARDa, MAl, VICE PRESIDENT State.Certified General Real Estate Appraiser RZI 190 ~~()~l2'()~ ~ (:~l2l2~ I~(:. <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< L4J7J7raisers .}lealtors >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 521 SOUTH OLIVE AVENUE WEST PALM BEACH, FLORIDA 33401 www.andersoncarr.com Telephone (561) 833-1661 Fax (561) 833-0234 December 13,2006 Q!8lisl' c)efV!ce c5illce 1947 Ms. Vivian L. Brooks Planning Director Boynton Beach CRA 915 South Federal Highway Boynton Beach, Florida 33435 Dear Ms. Brooks: At your request, we have prepared an appraisal of 211 East Ocean Avenue, Boynton Beach owned by Thomas D. Walsh The property is improved with a two story, single family building. The improvements (1,736 SF total) are situated on a 13,945 square foot site (0.32 acres). This is a low Floor Area Ratio of 0.12. This implies that the land could support additional building improvements or an expansion of the existing structure. The existing improvements appear to be functional and reasonably well maintained. However, the neighborhood is in a period of rapid change and redevelopment and the existing improvements are approaching the end of their economic life. The subject site at 13,945 square feet or 0.32 acres is somewhat small for independent redevelopment. Due to the site size, it will likely be necessary to assemble the subject parcel with one or more of the adjacent properties in order to develop the site to its maximum obtainable potential. It would also be feasible to remodel the building for an office or retail use as has been successfully done in historic areas of Delray Beach, West Palm Beach, Lake Worth and Boynton Beach. The subject property is located within a district of Boynton Beach which is currently zoned R-3 Multiple Family with a future land use of LRC Local Retail Commercial. The subject is located in the Ocean District Community Redevelopment area. According to Eric Johnson at the City of Boynton Beach Planning Department, the area is in the process of having the zoning changed to MX Mixed Use and future land use changed to MU-L1 Mixed Use Low 1, allowing up to 20 dwelling units per acre and a height up to 45 feet. Based on our review of the Long Range Land Use plan and conversations with Eric Johnson at the City of Boynton Beach Planning Department, it is our opinion that the current future land use plan designation for the subject is in error. The current zoning and future land use are in conflict and would not allow retail or commercial development of the subject site. Once the new zoning and future land use are in place, the property owner could request a zoning change to MX Mixed Use. The subject would more likely be developed in accordance with the Ocean District Community Redevelopment plan which slates the subject and the surrounding neighborhood for development with Mixed Use Low which would allow a maximum 45 foot building height and a maximum of 20 dwelling units per acre. A~[)~l?'{)~ <I: CAI2I2~ I~C. Ms. Vivian L. Brooks December 13, 2006 The subject property is currently listed for sale in the local MLS, at an asking price of $1,100,000. The purpose of this appraisal is to report our opinion of the market value of the fee simple estate, as of December 7, 2006. As of the effective date of the appraisal, our estimate of the market value of the fee simple interest is: EIGHT HUNDRED FIFIY THOUSAND DOLLARS $850,000 The following presents a complete appraisal in a summary report and our analysis of the data, along with other materials on which the estimate of value was predicated. This letter must remain attached to the report, which contains 62 pages plus related exhibits, in order for the value opinion set forth to be considered valid. Your attention is directed to the Assumptions and Limiting Conditions contained within this report. Respectfully submitted, ANDERSON & CARR, INC. Robert B. Banting, MAl, SRA State-Certified General Real Estate Appraiser RZ4 Michael J. Brady State-Certified Residential Real Estate Appraiser RD3648 RBB/MJB:cmp II A~I)~I2'()~ & C::AI2I2~ I~C::. TABLE OF CONTENTS Summary of Important Facts Certification Assumptions and Limiting Conditions Photographs, Maps, Aerials Purpose and Date of Appraisal Property Appraised Legal Description Function, Intended Use and Intended User of Report Client Scope of Work Property Rights Appraised Definition of Market Value Natural, Cultural, Recreational, Historical, or Scientific Significance Typical Buyer Profile Exposure / Marketing Times Location / Neighborhood Summary Property Data Owner of Record Palm Beach County Property Control Number Assessment and Taxes Census Tract Flood Zone Utilities Zoning and Comprehensive Land Use Plan Concurrency Sales History Site Analysis Improvement Analysis Highest and Best Use The Valuation Process Sales Comparison Approach Qualifications for Robert B. Banting, MAl, SRA State-Certified General Real Estate Appraiser RZ4 Qualifications for Michael J. Brady State-Certified Residential Real Estate Appraiser RD3648 Addendum: Survey . 1-2 3 4-7 8-15 16 16 16 16 16 17 17 18 18 19 20 21-31 32-38 32 32 32 32 32 32 33 34 34 35 36-38 39-40 41 42-62 4~U~VS()~ & C4VV~ I~C. SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS Client: Boynton Beach CRA c/o Vivian L. Brooks Planning Director 915 South Federal Highway Boynton Beach, FL 33435 Ownership (from tax rolls): Thomas D. Walsh Property Rights Appraised: Fee Simple Estate Special Assumptions Reference: None Unusual Market Externality: Urban redevelopment area Location: 211 East Ocean Avenue, Boynton Beach, Palm Beach County, Florida. Building Area: 1,736 SF Site/Land Area: 13,945 SF (Based on owner provided survey) Hazardous Waste Conditions: None observed. See Limiting Condition #12. Zoning: R-3, Multiple Family by City of Boynton Beach. Land Use: LRC, Local Retail Commercial by City of Boynton Beach. Flood Zone & Map Number: Zone C, 120196 0004 C, Map dated 9/30/82 Improvements: Two story, 1,736 SF residential building. ~I)~I?'()~ & CAI?I?~ I~C. SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS (CONTINUED) Current Use: Residential Highest and Best Use: Conversion of existing improvements to commerCial use and/or assemblage followed by Mixed Use Redevelopment Marketing Time: Six to twelve months Market Value, Fee Simple Estate: $850,000 Date of Value: Date of Report: December 7, 2006 December 13,2006 Appraisers: Robert B. Banting, MAl, SRA State-Certified General Real Estate Appraiser RZ4 Michael J. Brady State-Certified Residential Real Estate Appraiser RD3648 2 ~()~~'{)~ & (;A.~~~ I~(;. CERTIFICATION I certify that, to the best of my knowledge and belief: The statements of fact contained in this report are true and correct. The reported analysis, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, unbiased professional analyses, opinions, and conclusions. I have no present or prospective interest in the property that is the subject of this report, and I have no personal interest or bias with respect to the parties involved. My compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event. This appraisal conforms to the Uniform Standards of Professional Appraisal Practice CUSP AP") adopted by the Appraisal Standards Board of the Appraisal Foundation, except that the Departure Provision, permitting an appraiser to deviate from USP AP Standards, shall not apply. My analyses, opinions, and conclusions were developed, and this report has been prepared in conformity with the requirements of the Code of Professional Ethics and the Uniform Standards of Professional Appraisal Practice of the Appraisal Institute. This appraisal assignment was not made, nor was the appraisal rendered on the basis of a requested minimum valuation, specific valuation, or an amount which would result in approval of a loan. The use of this report is subject to the requirements of the Appraisal Institute and the State of Florida Division of Real Estate, Florida Real Estate Appraisal Board, relating to review by their duly authorized representatives. As of the date of this report, Robert B. Banting, SRA, MAl has completed the requirements of the continuing education program of the Appraisal Institute. Michael J. Brady and Robert B. Banting, SRA, MAl have made a personal inspection of the property that is the subject of this report. No one provided significant professional assistance to the person(s) signing this report. The appraisers have performed within the context of the competency provision of the Uniform Standards of Professional Appraisal Practice. ~=s-----~ ( ...--/ .. ~~ -~ '" - -;? ..- .._'-~.~ Ro~~rt H. an l:g, ~~'i' State-Certified General Real Estate Appraiser RZ0004 J<;!~'~''P.;/ ;. ,Ll:{ (.{. Michael J. Bra State-Certified Residential,' Real Estate Appraiser RP3648 3 AN[)I:~~()1illJ & CA~~~ IIillJC. ASSUMPTIONS AND LIMITING CONDITIONS 1. Unless otherwise stated, the value appearing in this appraisal represents our opinion of the market value or the value defined AS OF THE DATE SPECIFIED. Values of real estate are affected by national and local economic conditions and consequently will vary with future changes in such conditions. 2. Possession of this report or any copy thereof does not carry with it the right of publication nor may it be used for other than its intended use. The physical report(s) remains the property of the appraiser for the use of the client. The fee being for the analytical selVices only. The report may not be used for any purpose by any person or corporation other than the client or the party to whom it is addressed or copied without the written consent of an officer of the appraisal firm of Anderson & Carr, Inc. and then only in its entirety. 3. Neither all nor any part of the contents of this report shall be conveyed to the public through advertising, public relations efforts, news, sales or other media without written consent and approval of an officer of Anderson & Carr, Inc. nor may any reference be made in such public communication to the Appraisal Institute or the MAl, SRA or SRP A designations. 4. The appraiser may not divulge the material contents of the report, analytical findings or conclusions, or give a copy of the report to anyone other than the client or his designee, as specified in writing except as may be required by the Appraisal Institute, as they may request in confidence for ethics enforcemen t or by a court of law or body with the power of subpoena. 5. Liability of Anderson & Carr, Inc. and its employees is limited to the fee collected for the appraisal. There is no accountability or liability to any third party. 6. It is assumed that there are no hidden or unapparent conditions of the property, subsoil or structures which make it more or less valuable. The appraiser assumes no responsibility for such conditions or the engineering which might be required to discover these facts. 7. This appraisal is to be used only in its entirety. All conclusions and opinions concerning the analysis which are set forth in the report were prepared by the appraisers whose signatures appear on the appraisal report. No change of any item in the report shall be made by anyone other than the appraiser and the appraiser and firm shall have no responsibility if any such unauthorized change is made. 4 AN()~~S()~ & (:4.~~~ I~(:. ASSUMPTIONS AND LIMITING CONDITIONS (CONTINUED) 8. No responsibility is assumed for matters legal in character or nature, nor matters of survey, nor of any architectural, structural, mechanical or engineering nature. No opinion is rendered as to the title which is presumed to be good and merchantable. The property is appraised as if free and clear, unless otherwise stated in particular parts of the report. 9. No responsibility is assumed for accuracy of information furnished by or from others, the clients, his designee or public records. We are not Ilable for such information or the work of subcontractors. The comparable data relied upon in this report has been confirmed with one or more parties familiar with the transaction or from affidavit. All are considered appropriate for inclusion to the best of our knowledge and belief. 10. The contract for appraisal, consultation or analytical service is fulfilled and the total fee payable upon completion of the report. The appraiser or those assisting the preparation of the report will not be asked or required to give testimony in court or hearing because of having made the appraisal in full or in part; nor engaged in post- appraisal consultation with client or third parties, except under separate and special arrangement and at an additional fee. 11. The sketches and maps in this report are included to assist the reader and are not necessarily to scale. Various photos, if any, are included for the same purpose and are not intended to represent the property in other than actual status, as of the date of the photos. 12. Unless otherwise stated in this report, the existence of hazardous material, which mayor may not be present on the property, was not observed by the appraiser. The appraiser has no knowledge of the existence of such materials on or in the property. The appraiser, however, is not qualified to detect such substances. The presence of substances such as asbestos, urea-formaldehyde foam insulation, or other potentially hazardous materials may affect the value of the property, The value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired. 13. The distribution of the total valuation of this report between land and improvements applies only under the existing program of utilization. The separate valuations for land and building must not be used in conjunction with any other appraisal, no matter how similar and are invalid if so used. 5 A~[)~VS()~ & CAl?l? I~C. ASSUMPTIONS AND LIMITING CONDITIONS (CONTINUED) 14. No environmental or impact studies, special market studies or analysis, highest and best use analysis study or feasibility study has been requested or made unless otherwise specified in an agreement for services or in the report. The appraiser reserves the unlimited right to alter, amend, revise or rescind any of the statements, findings, opinions, values, estimates or conclusions upon any subsequent such study or analysis or previous study or analysis, subsequently becoming known to him. 15. The value estimated in this appraisal report is gross without consideration given to any encumbrance, restriction or question of title, unless specifically defined. The estimate of value in the appraisal report is not based in whole or in part upon the race, color or national origin of the present owners or occupants of the properties in the vicinity of the property appraised. 16. This appraisal report has been prepared for the exclusive benefit of Boynton Beach eRA. It may not be used or relied upon by any other party. Any party who uses or relies upon any information in this report, without the preparer's written consent, does so at his own risk. 17. The Americans with Disabilities Act (ADA) became effective January 26,1992. The appraisers have not made a specific compliance survey and analysis of this 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 value of the property. Since the appraisers have no direct evidence relating to this issue, possible non-compliance with the requirements of the ADA in estimating the value of the property has not been considered. 6 AN()I:V~()~ & (;AVV~ I~(;. ASSUMPTIONS AND LIMITING CONDITIONS (CONTINUED) 18. The subject property is located within a district of Boynton Beach which is currently zoned R-3 Multiple Family with a future land use of LRC Local Retail Commercial. The subject is located in the Ocean District Community Redevelopment area. According to Eric Johnson at the City of Boynton Beach Planning Department, the area is in the process of having the zoning changed to MX Mixed Use and future land use changed to MU-Ll Mixed Use Low 1, allowing up to 20 dwelling units per acre and a height up to 45 feet. Based on our review of the Long Range Land Use plan and conversations with Eric Johnson at the City of Boynton Beach Planning Department, it is our opinion that the current future land use plan designation for the subject is in error. The current zoning and future land use are in conflict and would not allow retail or commercial development of the subject site. Once the new zoning and future land use are in place, the property owner could request a zoning change to MX Mixed Use. The subject would more likely be developed in accordance with the Ocean District Community Redevelopment plan which slates the subject and the surrounding neighborhood for development with Mixed Use Low which would allow a maximum 45 foot building height and a maximum of 20 dwelling units per acre. 19. ACCEPTANCE OF, AND/OR USE OF THIS APPRAISAL REPORT CONSTITUTES ACCEPTANCE OF THE PRECEDING CONDITIONS. 7 ~UI:l?S{)N & {:Al?l?~ INC. SUBJECT PHOTOGRAPHS Front/side view of subject looking northeast (photo taken 12/7/2006) Rear view of subject facing south (photo taken 12/7/2006) 8 AN()r=VS()l~ & C~V~ I~C. SUBJECT PHOTOGRAPHS Street scene looking east (photo taken 1217/2006) Street scene looking west (photo taken 1217/2006) 9 4JlIIl/()I:I2S()~ <I: C4.I2I2~ I~C. SUBJECT PHOTOGRAPHS View of kitchen (photo taken 12/7/2006) <fc. ." ~ U $,lt- ~ View of powder room (photo taken 12/7/2006) 10 A~I)~~'()~ & CA~~. I~C. SUBJECT PHOTOGRAPHS View of living room and parlor (photo taken 12/7/2006) \ I" View of rear enclosed porch (photo taken 12/7/2006) 11 ANUr=VS()~ & C..u?V. I~C. SUBJECT PHOTOGRAPHS View of master bedroom (photo taken 12/7/2006) ~ ~.~:. ~?'""~~::.::_y~ ~ View of main bath (photo taken 12/7/2006) 12 ~Uf:V~c)~ & CAVV~ I~C. LOCATION MAP "I : F l i NW 14th ~'\IQI OCean In~t [)r .300m ~OOft \$\~ . .' -'0\ \<",#~ ~~ . .:0 C' fl1 ~ Spa.nis,~B.tv~r br~ 01 Wilson 'I Boynto Beach Nw 13th ~.l/Q Rie~~~t~~orl NQ 13th AVQ ,taJ "'., < ~G,rth Ad '.--'1 'f" . ...... " MB nn e IS Way' \\I 12.t'n A.Je I NEloJ2th AVQ ~ .. . NfiithA~~ " 'r NQi11thAVQ g!.I~ Ne 12.t'n Ter N~JQt~_~Elo ~!!f!in;"'-I!!~Elo~ I$ing, ~ r, E!lvd ~ ~ N e ;1Oth~Ve Nw9thAvQ I I ,,/1 ~" , I -r:1:Ilf -'~~I _ ~j:~il;' :l::j : ~- --I i1;~V)r -' ~'. ~t--.III.~_?t~_~lIQ'1 ~I jtr,Jt ~:;:~1z + N. "h~_ i.:r;Ul l~ i :'~ N" 4\" Ave ill> lS9__i'" t l. " ~ ....". ,.) li~ j !' '0. Nw3rd AVQi N~ 3rdAye ,(fJ """--\ ' E'I Boynto n Be N~1s a... r' , O. .,"".'- i ..'."'._li..; Es.!!.tl:!.l!f'~}D r ~ i '. i Jf i Inst Gay pr "j '. I Nw 1st AVQ I~ ~~~~.~Jve , !~ E 0cGan Ava 1 I II\) I';!} I S'l AV.e OU'<fI'l"R't'dve- : ~ 1st AvQ I~ stL2ndAVQ Hudson AVQ i~2ndA~Q~nton Beach '1 . @ I ~ i, 11 Hor~on~E ,.~.4t~ AYQ \~ SG4th AVQ SlQrlingYi1la9EloBtvd ):>~, 5thM~i 't; sb 5th AVe en l~ 12,. Ht-!?!h.'9~ sw~: A~Q i i;. ~ .~ )' r!th.A~Q-'I" I"' s17th AJ,QI$ljfO Horizons 0' ,!th'~~8t'n A~-"---'j-' ~8~h-;J~' ilf, ~ ~priElo} Dr N / ~--:t""-'i-I~ .. ....1 ""1" iI';!}, :f j' ..!~nbria:r Dr Harbour Dr f.1! ~-l t---'j1~h~t: ..~~ '''s!1~h~L~ en Harbour Dr S ~,.!i '~~~~:m: :;:~h::J ~ R.ocaO, J.oeo I ir' 2001 Ma uest.oom Inc." C2001 Nav' aten Technob ies €asa Lorna BlVd 13 A!lllilI)I:~Sf)!lllil & CA~~. I!lllilC. AERIAL PHOTOGRAPHS 14 4.1'~[)~VS()~ <I: CAVV~ I~C. PLAT MAP (f;0:' ~:> PI I c:<' CWl G:"~ l'.~,:(: ,8, L m @il (!:~1i1 ~ (~~'S' ?/ii) c' ,~; 'J 's' i l"'OOj ~..',~-, r'1l8 ~\~!t p,<ll) ft; in5.1:l! ~ ~-., ,.. <m.l . r 0..::1. .:... . ...M,-4S~ Wi- . J '~8 I ~o CI r.-:d ~ 1Q1 0020 I:<~'c, (& " ~il~ , I 0 ;; '~j I ... '0 "'~,;.: .~~~ ZO'" " I';;) ro~o u .1ftEC 15 AN()I:l?~f)~ <I: CAl?l?~ INC. PURPOSE AND DATE OF APPRAISAL The purpose of this appraisal is to estimate the market value of the fee simple estate of the subject property, as of December 7, 2006. The function of this report is to provide the client with a market value estimate for potential acquisition purposes. PROPERlY APPRAISED The property is improved with a one and two story, residential building, which is suitable for conversion to an office use. The improvements (1,736 SF total) are situated on a 13,945 square foot site (0.32 acres). The site size is based on a survey supplied by the property owner, which was completed on 4/12/95 by Edward A. Pac, Ir. of Pac Surveying, Inc. LEGAL DESCRIPTION (Per Survey) Lots 13 and 14, BLOCK 4, Original Town of Boynton Beach, according to the Plat thereof, recorded in Plat Book 1 at Page 23, public records of Palm Beach County, Florida. " FUNCTION, INTENDED USE & INTENDED USERS OF THE REPORT The function and intended use of this report is to provide the client with a supportable estimate of value for the subject property that can be utilized for potential acquisition. The intended users of the report are representatives of the client. This report has been prepared utilizing generally accepted appraisal guidelines, techniques and methodologies as contained within the Uniform Standard of Professional Practice (USP AP), as promulgated by the Appraisal Foundation. As a State-Certified, Licensed or Registered Appraiser, the appraisers preparing this report are bound by these standards and regulated by the Florida Real Estate Appraisal Board of the Florida Department of Professional Regulation. CLIENT Ms. Vivian L. Brooks, Planning Director Boynton Beach CRA 915 South Federal Highway Boynton Beach, FL 33435 16 4NU~V'()~ & C::AVV~ I~C::. SCOPE OF ASSIGNMENT / WORK In keeping with the purpose of the appraisal and the appraisal process, the appraisers have engaged in original research to provide a complete analysis for the client. Data from analysis has been gathered from various sources, such as the Palm Beach County Public Records, First American Real Estate Data, Inc., county and local planning & zoning departments, local realtors, property owners, and other appraisal offices. The product of our research and analysis is formulated within this report for analysis of and direct comparison with the subject property being appraised. Additionally, we have used original research performed in preparation of other appraisals by this office, which is considered appropriate for the subject property. This report has been prepared in a summary appraisal format with supportive data maintained in Anderson & Carr, Inc. permanent files. PROPERTY RIGHTS APPRAISED The property rights being appraised are those of fee simple estate. "Fee Simple" is defined as absolute ownership unencumbered by any other interest or estate subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power and escheat. The Dictionary of Real Estate Appraisal, Fourth Edition, 2002, Appraisal Institute, page 113. PERSONAL PROPERTY, FURNITURE, FIXTURES AND EQUIPMENT This appraisal does not value the business, personal property, furniture, removable fixtures, or personal equipment. 17 A~()~V~()~ <I: (:AVV~ I~(:. DEFINITION OF MARKET VALUE The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently, knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (A) Buyer and seller are typically motivated; (B) Buyer and seller are well informed or well advised, and each is acting in what he considers his and/or her own best interest; (C) A reasonable time is allowed for exposure in the open market; (D) Payment is made in cash in U. S. dollars or in terms of financial arrangements comparable thereto; and (E) The price represents normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. SOURCE: Title XI of the Financial Institutions Reform. Recovery. and Enforcement Act of 1989 ("FIRREA"). NATURAL, CULTURAL, RECREATIONAL, HISTORICAL OR SCIENTIFIC SIGNIFICANCE To the best of our knowledge, the subject property does not possess any natural, cultural, recreational, historical or scientific value. If this assumption is incorrect and the subject property does in-fact exhibit any of these values the appraiser reserves the right to revise this report in order to analyze these factors that may result in a revised estimate of value. 18 A~()~V~()~ & CAVV. I~C. TYPICAL BUYER PROFILE The subject property is an older residential building in the downtown area of the City of Boynton Beach in the Ocean District Community Redevelopment District. In its as-is condition the property would lend itself well to many types of uses such as professional offices, retail sales or residential use. 'The building is in average condition. It appears well suited for these uses. The immediate neighborhood is in a period of redevelopment stemming from the efforts of the city of Boynton Beach and the Community Redevelopment Agency. The subject would likely be developed in accordance with the Ocean District Community Redevelopment Plan which slates the subject and the entire surrounding neighborhood for development with Mixed Use Low 1 which would allow a maximum 45 foot building height and a maximum of 20 dwelling units per acre. The subject site at 13,945 square feet, is somewhat small for independent redevelopment of a residential use. It will likely be necessary for the subject site to be assembled with one or more of the adjacent parcels in order to develop the site to its maximum development potential. However, considered on its own it could support a small office or retail use. Because of the preceding property characteristics, the most probable buyer would be a developer intending interim term hold followed by assemblage and redevelopment of the site. 19 4N1)~V~()~ & ~AVV~ I~~. EXPOSURE / MARKETING TIMES Exposure time is the estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the. appraisal: a retrospective estimate based upon an analysis of past events assuming a competitive and open market. Exposure time exists before the effective date of the appraisal. Source: Appraisal Standards Board ASB Advisory Bulletin Volume III, Number 4, November 1995. Marketing time is defined in Advisory Opinion 0-7 as "an estimate of the amount of time it might take to sell a property interest in real estate at the estimated market value level during the period immediately after the effective date of an appraisal". The advisory opinion also states that "the request to estimate a reasonable marketing time exceeds the normal information required for the conduct of the appraisal process, and should be treated separately from that process. " Most properties offered for sale have been exposed on the market for six to twelve months, or less. The subject is within a redevelopment district which is enthusiastically being promoted for redevelopment by city government. This improves the marketability of the subject site. Therefore, exposure time is estimated at six to twelve months. Many of the past sales that have occurred involved seller financing, however, institutional financing at reasonable rates is now readily available. Therefore, marketing time for the subject is estimated at between six and twelve months. 20 ~()~t:!S()~ & CAt:!t:!. I~C. PALM BEACH COUNTY SUMMARY 1-' ~, , . ''\ , , " , "~I Palm Beach County is located along Florida's southeastern coast. It contains 2,023 square miles, and has 37 municipalities, according to information from the Chamber of Commerce of the Palm Beaches. The population reached 863,518 in 1990, having grown by an average offive percent a year in the late 1980's. The 2000 population was 1,131,184, an increase of approximately 31 percent over 1990, according to the US Census Bureau. The estimated 2005 population was 1,268,548. This growth has kept the County as the third most populous county in the State of Florida. The breakdown of the population by sex indicates approximately 48 percent males, and 52 percent females. 21 ~U~VSf)~ ~ CAVV~ I~C. PALM BEACH COUNTY SUMMARY (CONTINUED) More than ninety-six percent of the growth has been a result of in-migration of new residents, including a continued influx of retirees from the northern states, along with newcomers from other South Florida counties, primarily Miami-Dade and Broward, seeking an improved quality of life. ' Tourism, including visitors, is a leading industry, employing over 52,000 people, and generating about 3.6 million visitors annually. The economic impact of tourism is $1.5 billion annually. The recently expanded Palm Beach International Airport, a highly visible sign of the county's explosive growth, has experienced strong passenger traffic growth, whilst playing a major supporting role to the tourism industry. This airport was voted number one in appearance and passenger appeal, in a recent survey of 35 airports. On October 23, 1998, a new state of the art terminal building was dedicated at this airport. Major employers in the county are: Palm Beach County School Board, Palm Beach County Government, Pratt & Whitney, Columbia Healthcare Systems, Intracoastal Health Systems, Florida Power & Light, Flo Sun, and Motorola. Recently, Motorola announced cutbacks of up to 800 employees. However, the county's economy remains strong. The county has the highest total effective buying power in the state. Wealthy individuals and families are attracted by the climate and recreational opportunities. The county boasts forty-seven miles of coastline, along with the Intracoastal Waterway, as well as a bounty of attractions, events, and festivals. With over 140 golf courses, the county is considered the "golf capital of the world." The county includes both unincorporated areas and 37 incorporated municipalities, the largest of which is West Palm Beach, the county seat location. Boca Raton, located at the southern tip of the county is the second largest city, and one of the highest income retail trade areas in the V.S. The town of Palm Beach is one of the wealthiest communities in the V.S. The appeal, which has led people to relocate here, has reached the corporate community. In recent years several companies, including W.R. Grace, Sunbeam, MBNA, and Wackenhut have located national or regional headquarters facilities in the county. 22 4.~I)~V'()~ <I: t:4.VV. I~t:. PALM BEACH COUNTY SUMMARY (CONTINUED) The county has many parks and recreational facilities, many attractions, events, and festivals. Numerous hospitals and smaller medical facilities serve the County. The School Board oversees education from K through 12th grade, adult educational classes, vocational education, and Palm Beach Community College. Upper level curriculum is offered at Florida Atlantic University, Lynn University, Northwood University, Barry University, and Palm Beach Atlantic College. Conclusion The factors, which have fed the county's past growth, remain in force. As its population increases, Palm Beach County is becoming a major market in its own right. In addition, communications and information technology will allow more companies to relocate their operations here. The real estate market is strong, and population growth, while moderating in percentage terms, remains high on an absolute basis. As population grows, more supporting commercial, industrial and services development will be required. Furthermore, employment has been growing at a faster rate than population. These factors combined with a growing economy and a finite quantity of developable land create a positive real estate outlook for the long term. 23 ~()~V~f)~ ~ CAVV~ I~C. CITY OF BOYNTON BEACH SUMMARY t-- [IIII~ J't"" """ ...f..-. _... ~ I I :jWmUMt Boynton Beach is located in the eastern part of Palm Beach County covering an area of approximately 15.5 square miles. The city is located eleven miles south of Palm Beach, thirty-three miles north ofFt. Lauderdale, and has an annual average temperature of 74.7 degrees. This is made possible in part by the cool Atlantic Ocean breezes in the summer and in the winter by the influence of the Gulfstream just a mile off shore. When compared with the history of other American or Florida cities, the history of Boynton Beach is not a long one. The area was not settled in large numbers until Henry Flagler's railroad, the Florida East Coast railroad, was built from Daytona to Miami in 1894 to 1896. In the 1920's a building boom occurred throughout all of South Florida. The leading Palm Beach architect was Addison Mizner. Mizner left a legacy of Spanish- Mediterranean style structures in Palm Beach County. The Boynton Woman's Club, built in 1925 as a memorial to the town founder, is an original example of Mizner Architecture now included on the National Register of Historic Places. 24 4.~()r=~~()~ & C4.~~~ I~C. CITY OF BOYNTON BEACH SUMMARY (CONTINUED) <i29 itiim~L The basis of Boynton Beach's economy, until about World War II, was agriculture. The main crops were fruits and vegetables. Today, and for the last ten years, the economic base of the Boynton Beach area has been land development. The area is very dependent on the buying and selling of land and the construction of dwelling units and support facilities to house and support the in-migration of retired people from the northern areas of the United States. These people have chosen to live their remaining years in the warm climate of South Florida. The in-migration of retirees has caused significant population growth in Boynton Beach in years. The 1990 population, according to the U.S. Census Bureau, was 46,284. The 2000 census count, was 60,389 people, an increase of 30.5% over the ten year period. The 2005 population was estimated by the US Census Bureau to be 66,885 which indicates an average increase of 1,299 persons per year over the five year period. The Greater Boynton Beach area includes the area south of Hypoluxo Road, west of the Atlantic Ocean, north of the L-30 Canal, and east of the Everglades Wildlife Refuge. Along with the City, it includes the very small municipalities of Briny Breezes, Ocean Ridge, Gulfstream, the Village of Golf, and a 50 square mile portion of unincorporated Palm Beach County. 25 AN()I:I2~()N & CAl!I2~ INC. CITY OF BOYNTON BEACH SUMMARY (CONTINUED) Of the total adult population approximately forty-three percent is fifty-five years old or more. Fifty percent of the total adult population in Boynton Beach is considered retired. The median age, however, is on~y 43.5 years according to Claritas figures. The average household size in 2005 was 2.30 people in Greater Boynton Beach. Single unattached houses and condominiums account for approximately 73 percent of the dwelling units. Home ownership is put at approximately 63 percent. Total household income of $25,000 or more applies to seventy-three percent, of total households of Boynton Beach. This study indicates that Greater Boynton Beach is a typical South Florida area with a large number of retirees as part of its population. Due to the rapid population growth, many service, professional, and retail businesses have been expanded or created to cater to the needs of increased growth. Most businesses are located along Federal Highway, Boynton Beach Boulevard, Ocean Avenue, Woolbright Road, and Congress Avenue. According to the City of Boynton Beach Planning Department, the city covers some 15.26 square miles. An estimated 1.28 square miles are planned to be added through future annexations. The Greater Boynton area amounts to some 49.8 square miles. Growth has been so dynamic that in the early 1990's a community plan was created for the west Boynton area. The plans recommendations are now part of the Palm Beach County Comprehensive Plan. Significant efforts have been made to attract new business and industry to the Boynton Beach community. The success of this effort is reflected by the presence of the Boynton Beach Mall, AP AC, and various other smaller businesses that have moved into or are planning to move into this community. The development of Quantum Park, a 562 acre planned industrial development, is attracting more business's particularly in light of the Gateway Boulevard (N.W. 22nd Avenue) 1-95 interchange at the project. This expansion of business should attract younger working age people and their families to this area. This in turn should cause an expansion of service, professional, retail businesses, and employment, catering to the needs of this population. 26 ANU~~'()~ & C4~~~ I~C. CITY OF BOYNTON BEACH SUMMARY (CONTINUED) Of considerable importance is the new Boynton Beach High School in Quantum Park. The $37.8 million facility was completed in August of 2001 housing 2,500 students. Included is an 1,880 seat gymnasium, outdoor tact, baseball, softball and football fields and a closed-circuit television production studio. Enhancing the school's and Quantum Park's access is the widening of Gateway Boulevard from 1- 95 to US Highway 1. Boynton Beach is also attempting to revitalize several areas of the city. In 1998 Urban Design and David Plummer & Associates designed a city wide Redevelopment Master Plan, Vision 20/20. The plan calls for many areas to be enhanced with street beautification projects, parks and community services. Most prominent is Boynton Marina project. The development, located just north of Ocean Avenue on the west side of the Intracoastal Waterway, is in current development The project coincides with redevelopment of Ocean Avenue from Seacrest Boulevard to the new bridge at the Intracoastal Waterway. Complementing this urban redevelopment is the Blue Lagoon Stormwater Facility to the north. The facility provides drainage for the project and has lagoon front walks with a central gazebo. Much of the growth and many contributing factors in Boynton Beach's presence in today's market has taken place, not in the city itself, but in the Greater Boynton area. The suburban area has grown extremely rapidly over the past few years with numerous new residential planned unit developments and major shopping centers. West of this area lies the Palm Beach County Agricultural Reserve, which is destined for future low density residential development. Disregarding city boundaries, the community has expanded westward to the Florida Turnpike. The growth in this suburban area is forecasted to continue as long as the current overall economic conditions prevail. 27 A~[)~I2~()~ '" CAI2I2~ I~C. BOYNTON BEACH DOWNTOWN ANALYSIS A neighborhood is defined as: "A group of complementary land uses; a congruous grouping of inhabitants, buildings, or business enterprises." SOURCE: Dictionary of Real Estate Appraisal, Fourth Edition, 2002. o ,"oom 2100ft The subject property is located in downtown Boynton Beach, in the Ocean District Community Redevelopment district. The neighborhood's boundaries are 1-95 to the west, the Intracoastal Waterway to the east, Southeast Second Avenue to the south, and Northeast Sixth Avenue to the north. The redevelopment district boundaries are Northeast 3rd Avenue to the north, Southeast 2nd Avenue to the south, Sea crest Boulevard to the west and the FEC Railroad tracks to the east. The district is characterized by older commercial properties along the major thoroughfares with moderately priced residential uses in the interior neighborhoods. 28 AN[)~l?~()~ & C4l?l?\!I I~C. NEIGHBORHOOD SUMMARY (CONTINUED) The neighborhood has good access. The primary thoroughfares are Boynton Beach Boulevard, Federal Highway, and Ocean Avenue. Boynton Beach Boulevard provides access to the Congress Avenue commercial district, a booming retail area, as well as rapidly developing residential areas lying west of the city. Ocean Avenue provides access to State Road AlA and wealthy beach communities. Federal Highway traverses Palm Beach County's older coastal neighborhoods. Federal Highway also provides access to Atlantic Avenue in downtown Delray Beach, an older commercial district that is redeveloping as a thriving restaurant and nightlife area. The City of Boynton Beach has a conceptual redevelopment plan for the district. Ocean Avenue underwent streetscape modification. East Ocean Avenue is seen as the "main street" of the downtown area as it does not have the volume of traffic the other main thoroughfares in the district. One of the goals for East Ocean Avenue is to make it a pedestrian friendly area of mixed use properties along with the public use properties within the district. All things considered, this neighborhood is likely to experience stable, or possibly increasing property values for the long term foreseeable future. It is yet to be seen, as hoped by the city and local business owners, if the completion of the on-going projects will create the momentum necessary to spur a dramatic wave of new private redevelopment. 29 A~[)~l!S()~ & CAl!l!~ I~C. NEIGHBORHOOD SUMMARY (CONTINUED) \ Llj ~~~I .\-J.L. J I / I '--. .-- h '-1 ,/---. I I I,~ I~ '. . ~rl ~-{rrrrJ r' : ~.w eLi, ::::::::::LJ ===F=i I e legend - 0:,t_&0I..N13fy __Om-x eOlJ\doif" J:c3!l('l.1oJd: CJ(':R.i~l'::lIJntll'ffY . '"",,, C.IJ{j~ BG'LT1'lIJi-:.,I:"j;r f.J Ck......l)wrj CCI1IUlU...i1) Redn'.lop......' Plan lkpda: ~.. naid. _M 1_ o-,y' ~.7 p ~...if~~.,,> ~:f_ 30 ~[)~I;lS{)~ & (;41?1?~ I~(;. NEIGHBORHOOD SUMMARY (CONTINUED) .1 ...Iii ... EOCEIWAVE . . SE 1Sr AVE ~ !'6 I:l '" ... --'--'-'- .-.". -_ '-'^.._.______.._m......__H.",_.._,__.__.__..........,_.._.u...__.~y.,.._.~ eL.~"'" . '_""'::l..'~ ~... '" H:: f\lllflo L'""1I1'" lIIdl'<'JC!f~ i:EB ".,...: ~":r .. ~ ~.:.... 1....1~'Ctrdf1l.: -....". 1"~..~r)y0;:;E_L ..P'f.i"]' ~"_t r.<~! 11; '[! .~E. 1"::"'<.1.1 ~. ,p 0.,... Di'itrTl c"''''lIIlit:> Rpdel'plol'ment Pia" .,.. IM<h llah _M 1~ ;; III ,m ------_.- 31 ~U~I?~f)~ & C4.I?I?~ I~C. PROPERTY DATA Owner Thomas D. Walsh Palm Beach County Property Control Numbers 08-43-45- 28-03-004-0130 Assessment and Taxes The total assessment for 2006 was $174,023, ofthat amount, $101,335 is attributed to the land and $72,688 is attributed to the improvements. The total 2006 ad valorem tax is $3,796 with an additional non-ad valorem charge of $192. Based on the value conclusion in this report the subject is significantly under assessed. Census Tract The subject is located in census tract 0061.00. Flood Zone The subject property is located on the National Flood Insurance Program Map, Community Panel Number 120196-0003-C dated September 30, 1982. This map depicts that the subject is situated within an area designated as Flood Zone "C" which is an area of minimal flooding. Utilities The subject property is serviced with all customary public utilities including water, sewer, electric and telephone service. The subject also has a well for irrigation purposes. 32 4.~I)~~\()~ & C4.I?~. I~C. PROPERlY DATA (CONTINUED) Zoning The subject property is located within a district of Boynton Beach which is currently zoned R-3 Multiple Family with a future land use ofLRC Local Retail Commercial. The subject is located in the Ocean District Community Redevelopment area. According to Eric Johnson at the City of Boynton Beach Planning Department, the area is in the process of having the zoning changed to MX Mixed Use and future land use changed to MU-L1 Mixed Use Low 1, allowing up to 20 dwelling units per acre and a height up to 45 feet. Based on our review of the Long Range Land Use plan and conversations with Eric Johnson at the City of Boynton Beach Planning Department, it is our opinion that the current future land use plan designation for the subject is in error. The current zoning and future land use are in conflict and would not allow retail or commercial development of the subject site. Once the new zoning and future land use are in place, the property owner could request a zoning change to MX Mixed Use. The subject would more likely be developed in accordance with the Ocean District Community Redevelopment plan which slates the subject and the surrounding neighborhood for development with Mixed Use Low which would allow a maximum 45 foot building height and a maximum of 20 dwelling units per acre. We feel that the appropriate Comprehensive Land Use Plan for the subject property is MX - Mixed Use. The following is an excerpt from the City of Boynton Beach Land Use Plan: Mixed Use: This land use category shall consist of all Central Business District zoning districts and/or any zoning district( s) which may be established subsequent to the adoption of the Plan provided that all of the above mentioned zoning districts are shown on the Future Land Use Map within the Mixed Use land use category. (The residential zoning districts currently shown within the Mixed Use land use category include: R-l-AA Single Family; R-I-A Single Family; and R-3 Multi-Family; in addition to the commercial uses allowed in C-l OfficelProfessional, C-2 Neighborhood, and C-3 Community Commercial Districts.) 33 A~()r=VS()~ & CAVV~ I~C. PROPERlY DATA (CONTINUED) Concurrency The strongest growth control measure ever imposed on Palm Beach County was passed by the Florida Legislature and became effective on February 1, 1990. Chapter 163, Florida Statutes, otheIWise known as the Growth Management Law mandated this. One provision of this law, known as "concurrency", dramatically limits the ability to develop real property. Concurrency requires that adequate infrastructure be available to selVe new development. Eight types of infrastructure are affected including; traffic, potable water, sewer, drainage, solid waste, recreation and open space, mass transit, and fire rescue. The subject property is an existing building and, therefore, is exempt from concurrency restrictions as developed. Future redevelopment of the subject tract could invoke concurrency related restrictions. The city of Boynton Beach has a concurrency exemption for its urban area. There is also a county wide residential exemption east of 1-95. Sales History The appraisers have not been provided with a title abstract on the property appraised, nor have they conducted a title search of their own. However based upon the most recent available data from the Palm Beach County Tax Rolls the subject was acquired in 1995 for $75,000 OR Book 08521, Page 1292. The property is currently being marketed for sale by the owner and it is listed in the local MLS, listing number R2748979 with an asking price of $1,100,000 and has been listed since December 1,2006. According to the owner it is also listed in Loop Net, a commercial property listing selVice. 34 4N()~V~()~ & C4.VV~ I~C. PROPERTY DATA (CONTINUED) Site Analysis We have relied on the legal descriptions, copies of the Survey (see addendum), the Palm Beach County property records and a physical inspection of the property for this analysis. The subject property is a rectangular shaped parcel measuring 110.13 feet on the north side of East Ocean Avenue and extends north 126.62 feet, to the northern property line. The site is 13,945 square feet or 0.32 acres. This is slightly larger than the tax card size of 12,001 square feet or 0.2755 acres. Should an updated survey indicate a substantially different site size the appraiser reserves the right to amend this report accordingly. The site has access from two curb cuts from East Ocean Avenue. Access to the subject property is considered good. The subject site is basically level (slopes slightly to East Ocean Avenue in the southern portion of the site), appears to be composed of typical loose south Florida sand, and has an elevation at or near road grade. 35 A~I)~VS()~ & CAVV~ I~C. IMPROVEMENT ANALYSIS We have relied upon the Palm Beach County tax rolls and a physical inspection of the property for the following analysis. The subject property is improved with a two-story building, with a single story porch in the rear and is in average condition. The interior of the house is also in average condition and appears to have been adequately maintained. The following is a description of the buildings. There is an area at the back of the improvement which has a clothes washer and dryer, covered by a shed type roof (see photo of rear of subject). This area adds no value. Building Type: Two story single family residence Year Built: 1902 Foundation: Crawl Space Utilities: Public water and sewer, private well for irrigation system Exterior Walls: Painted wood shingle siding Roofing: Asphalt shingle roof reportedly replaced in 2004 Sub- Flooring: Wood Floor Covering: Miami Dade Pine and vinyl Electrical: Individual light residential Doors: Solid wood exterior door, wood interior. Windows: Painted wood single hung windows 36 A~[)-=l!~()~ '" CAl?l?!l I~C. PROPERTY DATA (CONTINUED) Improvement Analysis (Continued) Bath: Ceramic tile floor, pedestal sink 'and stall shower with ceramic tile surround Cabinets/Counters: Wood cabinets and mica counter tops Functional Utility: Building designed and constructed for its intended single- family residential use. Site Improvements: The site is fenced with a 6 foot wood fence and a circular driveway with brick pavers and an awning covering a parking area in the front of the building. 37 ~()~I:?'()~ & CAI:?I:?~ I~C. PROPERTY DATA (CONTINUED) 1m rovement Data (Continued) 28.0' Covered Porch 28.0' Enclosed Porch KIIchon C>nlng Room in " b g b ~ b ~ 8eclroom Bedroom Powder Room Uvtng Room Parlor 28.0' Covered Pal1dng FIRST FLOOR Bath b :e Bedroom 28.0' SECOND FLOOR mments: ~-----'---'----'---'-'-'-'------'- --------_._-~_...- -~._.__.._-_._-- ------...---. ------ - ,- AREA CALCULATIONS SUMMARY Code Cncllpllon Slzt .... T"'-Io GUl I 'GIA2 I PIP jCWt P1r.t "looE' JlAclo..<< Porch Sec0II4 Ploor Covered. Porch Covered .arkiDg 7~1, DO 210.00 121.00 371. DO 364.00 TOTAL BUILDING (rounded) 100e.00 7".00 378.00 3"'.00 1736 38 Scale: 1 II 15 Ph'.t rloor 26.0 x :28.0 _Qc10..4 Porch 10.0 x 28.0 SecoDd Floor 26.0 x 28.0 210.00 121.00 +- 3 Calculations Total (rounded) 1736 AN()-=I?Sf)~ '" {:4.I?I?~ I~{:. HIGHEST AND BEST USE "Highest and Best Use" may be defined as that reasonable and probable use that will support the highest present value, as defined, as of the effective date of the appraisal. Alternatively, that use, from among reasonably probable and legal alternative uses, found to be physically possible,' appropriately supported, financially feasible, and which results in highest land value.1 Physically Possible: The subject site is a generally rectangular parcel with 13,945 square feet of land area. The size and shape would allow the development of the site with a number of alternative uses. Legally Permissible: The subject is currently zoned R-3 Multiple Family but will, in all likelihood, be allowed for rezoning to Mixed Use Low following a land use amendment changing the small area of residential to be in line with the neighboring mixed use designatied parcels. That Mixed Use Low designation will allow a number of alternative uses, but the primary uses envisioned by the zoning are commercial, office or medium density residential uses. The proposed zoning will allow a residential development density of up to 20 units per acre and a maximum building height of 45 feet. Financially Feasible: Just to the east in the Central Business District Redevelopment area several projects have been well received. The Promenade development opened its sales office in mid February 2005 and reportedly largely sold out 318 condominiums units in a week. Those contracts were returned by the developer who cited hurricane related cost increases and the repriced units have been put back on the market, The Marina Village development by the Related Group opened its sales office on May 22, 2003 following approximately one week of limited pre-sales. As of close of business on the first day of active sales, the development reported that it had sold 75% of its 338 condominiums. Due to the magnitude of the interest in the property, asking prices for the units increased throughout the day. Initial advertised pricing indicated two bedroom units in the $180,000 range. Prior to opening the sale office, asking prices had increased to the $240,000 range and by the end of the day prices had dramatically increased again to as high as $500,000 for prime units. I Real Estate ApD~aisal Terminology. American Institute of Real Estate Appraisers. Society of Real Estate Appraisers. 39 4.~()-=l?S()~ & C4.Vl? I~C. HIGHEST AND BEST USE (Continued) Since that time, the demand for residential condominiums has cooled significantly. Although the subject site does not offer the potential for unobstructed water views like the Marina Village development, there is some indication of continued demand for afford ably priced residential structures. The subject is within an area envisioned as "main street" with pedestrian traffic, small shops and boutiques. It is within walking distance to City offices and a park. A mixed use Commercial/Residential development of the subject site appears to be financially feasible. Maximally Productive: Based on the success of the initial presales in the Promenade development and the Marina Village condominium development just to the south, the maximally productive use of the subject site would be for assemblage with surrounding properties and development with a multi story building or buildings having first floor commercial uses and condominium residences on the upper floors or a mix of commercial and residential buildings. The subject site at 13,945 square feet is likely too small for independent redevelopment. Although a redevelopment of the subject with a more intense use would be physically possible, it is unlikely that the subject tract could be redeveloped independently and still attain the maximum density allowable under the appropriate Mixed Use long range land use plan. For this reason, the subject would likely be assembled with one or more of the adjacent properties prior to redevelopment. As improved, all indications are that the value of the underlying land is approaching the value from the land combined with the existing improvements. A buyer of the subject property would look, at least partially, to the current improvements to provide income to help support the investment for an interim period. This status quo would need to continue until such time that the subject site was assembled with a sufficient amount of adjacent land to allow redevelopment of the assembled parcel. Based on the preceding discussion, the highest and best use of the subject land and improvements is interim hold followed by assemblage and redevelopment with a commercial/residential development in accordance with the proposed Mixed Use zoning which would allow 20 units per acre and up to 45 feet in building height. Alternatively, the existing building could be converted to commercial use on a stand alone basis. 40 ~()I:V~()~ & CAVV!J I~C. THE VALUATION PROCESS Generally, the appraiser uses three approaches to value in estimating the market value of a particular property. These approaches are the Cost Approach, the Income Approach, and the Sales Comparison Approach. The Cost Approach is based upon the principle of substitution which affirms that a prudent purchaser will pay no more for a property than the cost of constructing an equally desirable substitution. This approach is most applicable for new properties which represent the highest and best use and for special purpose properties when no comparisons are available. The Income Approach is based upon capitalization of the net income attributable to the real estate capitalized into an estimate of the present worth of the anticipated future benefits. This approach views the property through the eyes of the typical rational investor and is most applicable for investment type properties. The Sales Comparison Approach requires that the appraiser locate recent sales of similar properties and through an adjustment process arrive at an indication of what these properties would have sold for if they possessed all of the salient characteristics of the subject property. These adjusted sales prices are then correlated into an estimate of the market value of the property via the Sales Comparison Approach to Value. The final step in the appraisal process is the reconciliation or correlation of the value indications. In the reconciliation or correlation, the appraisers consider the relative applicability of each of the applicable approaches, examines the range between the value indications, and places major emphasis on the approach that appears to produce the most reliable solution to the specific appraisal problem. Due to the age of the existing improvements we have not utilized the Cost Approach. The Income Approach was not used do to a lack of historic residential rental data and uncertainty of the future use of the site. 41 A~U~~'f)~ & CA~~~ I~C. SALES COMPARISON APPROACH TO VALUE The sales comparison approach is the preferred method for valuing improved properties when comparable sales are available. In this approach, similar properties in the competing market area are analyzed and compared to the subject property with appropriate adjustments made to indicate the value of the subject. A search was conducted for the most recent sales of and contracts on properties both in the immediate vicinity of the subject and in reasonably similar market areas which are similar to the subject. We tried to find sales of former residential improvements that were converted to office and/or commercial use or small commercial buildings. These sales were analyzed and compared to the subject in order to arrive at a value indication. We selected comparable sales that were the most similar to the subject in terms of location, density, and size. They were compared with the subject and adjustments were made for differences. The sales used were the best comparables that we were able to verify with a party to the transaction. Differences between the sales and the subject were made on a qualitative basis. We used appraisal analysis to show significant relationships between the sales prices per square foot of building and also the sales price per square foot of land area. We then reconciled the comparables' value indications to reach a value indication for the subject. . The sales are found on the following pages, and the analysis follows. 42 NlWI)~l?~()~ & C4.l?l?~ I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO. 1-120 North Swinton Avenue, Delray Beach Our File: 250605-1 OR Book 18699, Page 1684 Dee~ dated May 27,2005 Grantor: Alan and Ann Kasten Aker Gran tee: Rabih J. and Shannon K. Boueri Legal: The South 6.0 feet of Lot 12, all of Lot 13, and the North 1.25 feet of Lot 14, Block 59, Town of Linton (now Delray), according to the map or plat thereof as recorded in Plat Book 1, Page 3, Sheet 2, Public Records of Palm Beach County, Florida. Parcel No.: 12-43-46-16-01-059-0121 Location: West side of N. Swinton Avenue, mid-block between NE 15t and NE 2nd Streets, Delray Beach. Zoning: CBD, Central Business District Land Use Plan: r CC, Commercial Core by City of Delray Beach 43 A~()I:~~()~ ~ CA~~. I~C. SALES COMPARISON APPROACH TO VALUE (CONTINUED) SALE NO.3 (CONTINUED) Utilities: Water and sewer. Site Size: 11,003 square feet (.25 acres) Improvements: A two-story wood house constructed circa 1928 containing 1,218 square feet. FAR: 11% Sales Price: $675,000 $554.19 Price/SF Bldg.: Price/SF Land: $61.35 Financing: Conventional terms; $225,000 loan at a fixed rate with Bank of America Comments: According to Lawrence Dawson "Greg", seller's broker and working for Prudential Florida WCI Realty in the transaction, the property has been restored and will be utilized by the current owner (architect) as two office spaces. Mr. Dawson confirmed the sale price of $675,000 and verified that the sale was an arm's length transaction. The property originally listed at an asking price of $750,000. Mr. Dawson further stated that the property contained 11 on-site parking spaces and an additional 400 square feet of under air garage space. (ies 9/05) 44 ~1)f:l?Sf)~ &: CAl?l?~ I~C. SALES COMPARISON APPROACH TO VALUE. (CONTINUED) SALE NO.2 -125 Butler Street, West Palm Beach, Florida Our File: 260177, 260731-2 and 3C OR Book 18850, Page 1182 Deed Da~ed July 01, 2005 Grantor: Raymed, Inc. Grantee: Thomas Family Partnership, Ltd. Legal: GaIlaghers Resub, Bethesda Park Lots 1 to 6, Inclusive (Less N. 32') Block 6, in Plat Book 6, Page 69, Palm Beach County, FL. Parcel No.: 74-43-43-15-14-006-0011 Location: Northeast corner of Butler Street and Broward Avenue, West Palm Beach, Florida. Zoning: CMUD, Currie Corridor Mixed Use District by the City of West Palm Beach. Site Size: Rectangular in shape, 25,200 square feet 45 ~1)r=12~()~ & CAVI2. I~C. SALES COMPARISON APPROACH TO VALUE (CONTINUED) SALE NO.2 (CONTINUED) Utilities: Water and sewer. Improvements: One story, 5,460 sf CBS medical building built in 1969 in average condition. FAR: 22% Sales Price: $1,815,000 Price SF/Bldg: $332.42 Price SF/Land: $72.02 Financing: Cash to seller Comments: Sale data obtained from the public records, Co-Star Camps and verified with the buyer Connie Thomas. Arm's-length transaction. Buyer"plans to occupy building when they are released from a lease in another building. In the interim, they are attempting to lease out this building at $22 per square foot net. (ked, mjb 12/2006) 46 ~I)~l?~()~ & C4.l?l?~ I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO.3 - 31410th Street, West Palm Beach, Florida Our File: 250646, 260731 - 2, 3C OR Book 19287, Page 0524 Deed Dated: September 15,2005 Grantor: A & R Care of Florida, Inc. Grantee: 314 10th Street, Ltd. Partnership Legal: Lots 6 to 9 Block 4, Gruber Carlberg, Plat Book 7 Page 63, as recorded in the Public Records of Palm Beach County, Florida. Parcel No.: 74-43-43-15-19-004-0060 Location: South side of 10th Street, about 150' east of Dixie Highway, West Palm Beach, Florida 47 ~()t=~'()~ & CA~~. I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO.3 (CONTINUED) Zoning: OC: Office Commercial, West Palm Beach Site Size: 13,939 square feet Improvements: Two one-story buildings that were built in 1926 and contain 3,008 square feet of living area. FAR: 22% Sale Price: $865,000 $287.56 Price/SF Bldg: Price/SF Land: $62.06 Financing: Cash to seller, no impact on sale price. Comments: Information was obtained from public record and verified by the attorney, Kerry Schwencke and the buyer, Michael Carp, The property had been listed for sale in the local MLS for $895,000; the listing was cancelled. The property had been an assisted living facility and was purchased by a contractor to renovate for use as an office building. (cab, mjb 12/2006) 48 A~U~l?'{)~ <I: (:Al?l?~ I~(:. SALES COMPARISON APPROACH (CONTINUED) SALE NO.4 - 31111th Street, West Palm Beach, Florida Our File: 260165, 260731- 2 and 3C OR Book 19796, Page 0072 Deed Dated January 5,2006 Grantor: Philip Longo Grantee: H. P. Schwarz LLC Legal: The W 5 feet, of the S Y2, of Lot 16, and all of Lots 17 and 18, Block 2, Gruber Carlberg, Plat Book 7 Page 63, as recorded in the Public Records of Palm Beach County, Florida. Parcel No.: 74-43-43-15-19-002-0161 Location: North side of 11th Street, roughly 145 feet west of North Olive Avenue, West Palm Beach. 49 ~Uf:I2'()~ <I:: CAI2I2~ I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO.4 (CONTINUED) Zoning: DMPBTI (Downtown Master Plan Building Type I) West Palm Beach Site Size: 7,350 square feet Improvements: Two-story hollow tile construction residential/office building containing 2,101 square feet and accompanying cottage that contains 340 square feet of living area. Total are is 2,441 square feet. FAR: 33% Sale Price: $725,000 Price/SF/Bldg. : $297.01 Price/SF/Land: $98.64 Financing: Cash to seller Comments: Information was obtained from public records, property owner and a personal inspection of the premises. Property was in good condition and was originally constructed as a residence, however, it's layout would not preclude office use. Several properties in the area of this sale were originally residential, but have been converted over time to offices. The neighborhood has good proximity to both the Palm Beach County Courthouse and Good Samaritan Medical Center. (bma 3/2006,mjb 12/2006) (A&C 250646) 50 4N[)t=VS()~ & {:~l?~ I~{:. SALES COMPARISON APPROACH (CONTINUED) SALE NO.5 -112 Southeast 23rd Avenue, Boynton Beach Our File: 260731-3B OR Book 20299, Page 1622 Deed Qated May 3, 2006 Grantor: Carey Elizabeth Matthews Revocable Trust Grantee: Marie K. Seide Legal: Lot 2, Highpoint, recorded in Plat Book 23, Page 225, of the Public records of Palm Beach County, Florida Parcel No.: 08-43-45-33-04-000-0020 Location: South side of Southeast 23rd Avenue, just east of South Seacrest Boulevard, Boynton Beach. Zoning: C-1 Commercial by City of Boynton Beach 51 ~Uf:l?'()~ <I: C::Al?l?~ I~C::. SALES COMPARISON APPROACH (CONTINUED) SALE NO.5 (CONTINUED) Utilities: Water and sewer Improvements: The site is improved with a CBS building of average quality having been constructed in 1952. The building contains a total of 2,107 square feet of gross enclosed building area. Site Size: Rectangular site containing. approximately 10,600 square feet, or 0.24 acres. FAR: 20% Sales Price: $540,000 Price/SF Bldg.: $256.29 Price/SF Land: $50.94 Financing: Cash to seller. Comments: Sale information taken from the MLS #R2601612, deed and Palm Beach County Property Appraisers data. According to the listing real estate agent, Nils Friis, this was an arms length transaction, buyer and seller paying customary closing costs and the property was in fair condition. (mjb 12/2006) 52 ANI)I'I2S()~ & C::AI2I2~ I~C::. SALES COMPARISON APPROACH (CONTINUED) SALE NO.6 - 275 North Swinton Avenue, Delray Beach Our File: 260731-3B OR Book 20340, Page 1850 Deed Dat~d May 10, 2006 Gran tor: Marine Holdings Office Properties, LLC Grantee: Pauline Blanchet Legal: Lots 1, Stratford Atta Bowe Replat, as recorded in Plat Book 77, Page 200, of the Public Records of Palm Beach County, Florida." Parcel No.: 12-43-46-16- D9-00 1-0000 Location: Southeast corner of North Swinton Avenue and Northeast 3rd Street, Delray Beach . 53 4.~()r:l?'()~ & C4.l?l?~ I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO.6 (CONTINUED) Zoning: OSSHAD by City of Delray Beach Utilities: Water and sewer Improvements: Single story residential building converted to office space, with 1,386 square feet of space. Site Size: 10,890 SF or 0.25 acres FAR: 13% Sales Price: $899,000 $648.63 Price/SF Bldg.: Price/SF Land: $82.55 Financing: The seller financed the sale with a $699,000 mortgage, five year balloon at a 9% interest rate. Comments: Sale verified by Sharon Baker, the seller and listing agent. This was an arms length transaction with no seller concessions. The seller financed the sale with a $699,000 mortgage, five year balloon at a 9% interest rate. The seller stated that the financing did not have any effect on the sale price. The property was in good condition. The sellers replaced the roof covering, painted the interior and replaced the floor covering prior to the sale. (mjb 12/2006) 54 A~()I.:l?~()~ & CAl?l?~ I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO.7 -413 Northwest 2nd Avenue, Boynton Beach, Fl. Our File: 260731-3B OR Book 20511, Page 1548 Deep Dated June 8, 2006 Grantor: Jerome M. Kerwin Grantee: Ocean Capital Lending, LLC Legal: The east 9.5 feet of Lot 87, all of Lots 88, 89, and 90, Less the south 10 feet conveyed to the State of Florida for right of way, OR Book 1320, Page 34, Ridgewood, Plat Book 13, Page 7, Palm Beach County, Florida. Parcel No.: 08-43-45-21-15-000-0871 Location: North side of Boynton Beach Boulevard, east of 1-95 in Boynton Beach, Florida. Zoning: C2, City of Boynton Beach 55 ~[)I:~'f)~ & C4.~~~ I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO.7 (CONTINUED) Utilities: All standard utilities Improvements: Single story, commercial building with a basement, built in 1972, containing approximately 1,202 square feet of enclosed building area in average condition and 768 square feet of basement area in fair condition. The basement was not included in the building area square footage calculation. Site Size: Rectangular shaped site containing approximately 11,761 square feet, or .27 acre. FAR: 12% Sales Price: $485,000 Price/SF Bldg: $403.49 Price/SF Land: $41.24 Financing: Seller held a small second mortgage. No effect on sales price. Comments: This sale was confirmed as an arms length sale with no seller concessions by the listing Realtor, Dan Lichtenberger. The buyers occupy the building and have put approximately $100,000 into renovations including the basement. (mjb 12/06) 56 4.11~I)~VS()~ <I: ~Al?l?~ I~~. SALES COMPARISON APPROACH TO VALUE (CONTINUED) Sale 1 oViII1l9'" Of OTtol.! ~ ~: t'; '2~t,.ay hfth j I Atlantic A...ve-:" ~! I "~ 1~ I Sale 6 I'd I c: l<m,. Pol" 't:', ' :r o ~ ~ I' 8 unl!lf'l f3Mf '. I '.'.il. ~. // \/), 'Ilr lil f,j' - I t....' ,eD1; I" ' .1 ,'I L<:.[f :CAi Sales Location Map 5w 15th Ave Indkln Spring Golf And , toUMrr . du6 .... $ i , -1_1 ---If 'it WW~!lcl.._, n H GoIfFtcl ,I i Delaire lpwmry Club 57 I i :; / I II , i>', 1, it" I:t:, ; .' .i : ' jrffty........ ,I \i tot. i~: fii" ......m <:l~' ' " i.:' ,J ',1 ; f if Atlantic OCean OL-....:.. ,,1m lkm A~()~V~f)~ & CAVV~ I~C. SALES COMPARISON APPROACH TO VALUE (CONTINUED) Sales Location Map 2m m "oy~1 Palm Ie.m o (]1 ,. 7.. '.-oLO~<l~~~~~; .' =c{9a\,-,,\~~ ...........-,. r--J.....~ (4411 W.llm~- o h Ii z!83' Ii I' I: 1'. 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SALES COMPARISON APPROACH TO VALUE (CONTINUED) Discussion of Analysis In this analysis, we considered differences between the sales and the subject in terms of the Floor Area Ratio (FAR) to the sales price' per square foot of building area and the Floor Area Ratio (FAR) to the sales price per square foot of land area. Floor area ratio (FAR) is defined in the Fourth Edition (2002) of The Dictionary of Real Estate Appraisal as the relationship between the above-ground floor area of a building, as described by the building code, and the area of the plot on which it stands; in planning and zoning, often expressed as a decimal. In order to calculate FAR the total building area is divided by the total land area. FAR is used to show how much land comes with each square foot of building area. In other words, a low FAR represents a low lot coverage and a property having more land area per square foot of building area. The subject has an relatively small building improvement on a large parcel of land in a redevelopment area. As discussed in the typical buyer profile section of this report, a potential purchaser would most likely be purchasing this property to assemble and redevelop the property (land value) or to retrofit the building for a commercial use (building square foot value). We have looked at both scenarios taking into account the subject's low Floor Area Ratio. The Floor Area Ratio is a very significant attribute in the value of the subject. As illustrated on the chart on page 59, the subject has a FAR of .12. This is a low lot coverage and the subject has site area available for expansion of the current improvement or redevelopment potential for a larger improvement than what currently exists. The chart that follows shows that the higher the FAR is, the higher price per square foot of land area is. The subject is most similar to sales 1,6 and 7. Sale 1 has a FAR of 0.11 and a Price/SF of Land of $61.35. Sale 6 has a FAR of 0.13 and a Price/SF of Land of $82.55. Sale 7 has a FAR of .10 and a Price/SF of Land of $41.24. Based on the following chart and an analysis of the sales data, we have concluded that the value is $60 per square foot of land or $60 x 13,945 SF = $836,700, rounded to an indicated value of $837,000. 60 A~[)r=~S()~ & (:A~~9 I~(:. SALES COMPARISON APPROACH TO VALUE (CONTINUED) Discussion of Analysis (Continued) ----" ---._~..__. ---.-----.-- ----- ----- -----.----- FAR To SP/SF Site I i I L_______~__ ______ $120 $100 J!! $80 Ci) 11. $60 ~ fI) $40 $20 $0 0,05 0.10 0.15 0,20 FAR 0.25 0.30 0.35 -- --._._'--------------_..._-_._~.__.- ----.. Again, referring to the chart on page 59, the subject has a FAR of 0.12. The chart below shows that as the lot coverage increases, that is to say as the floor area increases, the price paid per square foot of building area decreases. The subject is most similar to sales 1, 6 and 7. Sale 1 has a FAR of 0.11 and a Price/SF of Bldg. of $554.19. Sale 6 has a FAR of 0.13 and a Price/SF of Bldg. of $648.63. Sale 7 has a FAR of .10 and a Price/SF of Bldg. of $403.49.Based on our analysis of the sales data and the chart below the value per square foot is concluded at $500 per square foot of building or $500 x 1,736 SF = $868,000. FAR TO SP/SF Bldg. -j $700 $600 0, $500 't:l m $400 ~ $300 ~ $200 $100 $0 0.05 0.10 0.15 0.20 FAR 0,25 0.30 0.35 - ------------.---.--.-.------.--.- ---.---.---- -- --------.----------- --- .---,.--- - 61 ~[)r:V'f)~ & (;4.VV~ I~(;. SALES COMPARISON APPROACH TO VALUE (CONTINUED) Discussion of Analysis Summary and Conclusion Our opinion of the market value of the fee simple interest of the subject as of December 7, 2006 is as follows: Price per square foot of land method: $837,000 $868,000 Price per square foot of building method: In the final analysis, we gave some weight to both the indicated price per square foot of land and the indicated price per square foot of building. Reconciled to: VALUE VIA SALES COMPARISON APPROACH: $850,000 62 QUALIFICATIONS OF APPRAISER ROBERT B. BANTING, MAl PROFESSIONAL DESIGNATIONS - YEAR RECEIVED MAl - Member Appraisal Institute - 1984 SRA - Senior Residential Appraiser, Appraisal Institute - 1977 SRPA - Senior Real Property Appraiser, Appraisal Institute - 1980 State-Certified General Real Estate Appraiser, State of Florida, License No, RZ4 - 1991 EDUCATION AND SPECIAL TRAINING Licensed Real Estate Broker - #3748 - State of Florida Graduate, University of Florida, College of Business Administration, BSBA (Major - Real Estate & Urban Land Studies) 1973 Successfully completed and passed the following Society of Real Estate Appraisers (SREA) and American Institute of Real Estate Appraisers (AI REA) courses and/or exams: Note: the SREA & AIREA merged in 1991 to form the Appraisal Institute, SREA R2: SREA 201: SREA: SREA: AIREA 18: SREA 101: AIREA: AIREA: AIREA: AIREA 2-2: AIREA: AIREA: AIREA: Case Study of Single Family Residence Principles of Income Property Appraising Single Family Residence Demonstration Report Income Property Demonstration Report Capitalization Theory and Techniques Introduction to Appraising Real Property Case Studies in Real Estate Valuation Standards of Professional Practice Introduction to Real Estate Investment Analysis Valuation Analysis and Report Writing Comprehensive Examination Litigation Valuation Standards of Professional Practice Part C ATIENDED VARIOUS APPRAISAL SEMINARS AND COURSES, INCLUDING: The Internet and Appraising Golf Course Valuation Narrative Report Writing Appraising for Condemnation Condominium Appraisal Reviewing Appraisals Eminent Domain Trials Tax Considerations in Real Estate Mortgage Equity Analysis Partnerships & Syndications Advanced Appraisal Techniques Federal Appraisal Requirements Valuation of Leases and Leaseholds Valuation Litigation Mock Trial Rates, Ratios, and Reasonableness Analyzing Income Producing Properties Standards of Professional Practice Regression Analysis In Appraisal Practice Discounting Condominiums & Subdivisions Condemnation: Legal Rules & Appraisal Practices Analyzing Commercial Lease Clauses Testing Reasonableness/Discounted Cash Flow Hotel and Motel Valuation Analytic Uses of Computer in the Appraisal Shop Residential Construction From The Inside Out Development of Major/Large Residential Projects Federal Appraisal Requirements Engaged in appraising and consulting assignments including market research, rental studies, feasibility analysis, expert witness testimony, cash flow analysis, settlement conferences, and brokerage covering all types of real estate since 1972, President of Anderson & Carr, Inc., Realtors and Appraisers, established 1947 Past President Palm Beach County Chapter, Society of Real Estate Appraisers (SREA) Realtor Member of Central Palm Beach County Association of Realtors Special Master for Palm Beach County Property Appraisal Adjustment Board Qualified as an Expert Witness providing testimony in matters of condemnation, property disputes, bankruptcy court, foreclosures, and other issues of real property valuation, Member of Admissions Committee, Appraisal Institute - South Florida Chapter Member of Review and Counseling Committee, Appraisal Institute - South Florida Chapter Approved appraiser for State of Florida, Department of Transportation and Department Natural Resources, Instructor of seminars, sponsored by the West Palm Beach Board of Realtors, Authored articles for The Palm Beach Post and Realtor newsletter. Real Estate Advisory Board Member, University of Florida. TYPES OF PROPERTY APPRAISED - PARTIAL LISTING Air Rights Medical Buildings Amusement Parks Department Stores Condominiums Industrial Buildings Mobile Home Parks Service Stations Auto Dealerships Vacant Lots - Acreage Shopping Centers leasehold Interests Apartment Buildings Hotels - Motels Office Buildings Special Purpose Buildings Residential Projects Financial Institutions Churches Marinas Residences - All Types Restaurants Golf Courses Easements "I am currently certified under the continuing education program of the Appraisal Institute." QUALIFICATIONS OF APPRAISER MICHAEL J. BRADY State Certified Residential Real Estate Appraiser, State of Florida, License # RD-3648 Licensed Real Estate Broker, State of Florida, License # BK3008804 Associate Member Appraisal Institute Member International Right of Way Association EDUCATION AND SPECIAL TRAINING Graduate, State University of New York at Brockport, Bachelor of Science, (Major: Political Science) 1978 Attended and completed the following courses/seminars: Appraisal Institute Course 520: Highest & Best Use and Market Analysis Course 510: Advanced Income Capitalization Course 310: Basic Income Capitalization Course 400: National Uniform Standards of Professional Appraisal Practice Update Course 410: Uniform Standards of Professional Appraisal Practice . Course 420: Business Practices and Ethics Course 710: Condemnation Appraising: Basic Principles and Applications Course 720: Condemnation Appraising: Advanced Topics and Applications Scope of Work: Expanding your Range of Services Effective Appraisal Writing Florida State Law and USPAR Review for Real Estate Appraiser FHA and the Appraisal Process Appraisal of Nonconforming Users Supporting Sales Comparison Grid Adjustments for Residential Properties International Right of Way Association Course 400: Principals of Real Estate Appraisal Gold Coast Professional Schools Course AB2 and AB2B Certified Residential Appraisal Course 2 Greater Rochester Association of REALTORS Introduction to Real Estate Appraising (RI) Valuation Principles and Procedures (RII) The Relocation Appraisal 101 08/03 to Present 04/01 to 08/03 03/95 to 12/99 10/92 to 12/94 01/99 to 12/99 01/88 to 12/98 10185 to 12/87 Anderson & Carr, Inc, Appraiser Associate Premier Appraisals, Inc. Staff Appraiser Bruckner, Tillett, Rossi, Cahill & LeGrett Real Estate Appraisal, Analysis and Consulting Group Staff Appraiser Lakeside Appraisal, Inc, Staff Appraiser Prudential Rochester Realty Real Estate Salesperson ERA Paul Fischer Realtors Real Estate Salesperson ERA Lighthouse Properties Real Estate Salesperson Tvpes of Prooertv Appraised-Partial Listin2 Residential-All Types Vacant Lots-Acreage Medical Buildings Office Buildings Condominiums Industrial Buildings Special Purpose Buildings Apartment Buildings Restaurants Eminent Domain Appraisals "'... -::; c:>- ~'" ...; i~ Q- ~'" IB! ..... -< ::r::. "'0 "'~ ~m ~~ K\- ~'" ! .!!: l!'; ! ~; .. l.O ::: U'1 I ~ :'0 N ;:; lig i- ",,,,,16 !il i!lIl;; ;j!lZ ~~i I <i ~ 'I' III ! ...-~ 'fE.. W1EA..t R/w N, E. lIt srnm l!J~~ ~~;~III~~~I!li~~~~II~ !~~~I~;ii:;i~ ii=~lji!i I. ~ '" i;!l ~ - c h ~ a '-' iV ~ .... !\,) ~S 126.62' At) '" . '" " '" I', ',,- '" '- ',,,, "\ " ~ '\, ~ ',<~>, "" ~I 'j ", "-, " ' ~""'~<r<",, '''-. " , . 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" z ~'C-:o.: ... ... ~:; !i' ~ < ....m -~ m ~ NOO ..,,~ ~ !" r-' -1 ~ CD ~~~'" ~ "" .." ~"""1rQ ~ . ~~~ C> '" Z ~~;: co ?Em.. m -iW'" .. <"> "'10;"; .'" ~. '" , Z ;: iiIi~ II 00 e "'615 ,. ""m-< """":;j -c::> zz PURCHASE AGREEMENT This Purchase Agreement (hereinafter "Agreement") is made and entered into as of the Effective Date (hereinafter defined), by and between BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY, a public agency created pursuant to Chapter 163, Part III, of the Florida Statutes (hereinafter "CRA" or "PURCHASER") and THOMAS D. WALSH (hereinafter "SELLER"). In consideration of the mutual covenants and agreements herein' set forth, the Parties hereto agree u~~: ' 1. PURCHASE AND SALEIPROPERTY. SELLER agrees to sell and convey to CRA and CRA agrees to purchase and acquire from SELLER, on the terms and conditions hereinafter set forth, the Property located in Palm Beach COlmty, Florida (the "Property") and more particularly described as follows: Lots 13 and 14, Block 4, ORIGINAL TOWN OF BOYNTON BEACH, according to the Plat thereof, recorded in PI~t Book 1, Page 23, of the Public Records of Palm Beach County, Florida. 2. PURCHASE PRICE AND PAYMENT. The Purchue Price to be paid for the Property shall be Eight Hundred and Fifty Thousand Dollars ($850,000.00), payable in cash, by wire transfer of United States Dollars at the Closing. 3. DEPOSIT. 3.1 Earnest Money Deposit. Within three (3) Business Days after the Effective Date, Purchaser shall deliver to Lewis, Longman & Walker, P.A.("Escrow Agent") a deposit in the amount ofTen Dollars ($10.00) (the "Deposit"). 3.2 Application/Disbursement of Deposit. The Deposit shall be applied and disbursed as follows: The Deposit shall be delivered to SELLER at Closing and the CRA shall receive credit for such amount against the Purchase Price. If this Agreement is terminated during the Feasibility Period (hereinafter defined) for any reason, the Deposit shall be immediately refunded to the CRA. If this Agreement is terminated due to a default, pursuant to Section 12, the Deposit shall be delivered to (or retained by, as applicable) the non-defaulting Party, and the non-defaulting Party shall have such additional rights,! if any, as are provided in Section 12. 3.3 Escrow Agent. CRA and SELLER authorize Escrow Agent to receive, deposit and hold funds in escrow and, subject to clearance, disburse them upon proper authorization and in accordance with Florida law and the terms of this Agreement. The patties agree that Escrow Agent will not be'liabIe to any person for misdelivery of escrowed items to CRA and SELLER, 'wlless the misdelivery is due to Escrow Agent's willful breach of this PURCHASE AGREEMENT Page 2 of 12 I Agreement or gross negligence. If Escrow Agent interpleads the subject Il}atter of the escrow, Escrow Agent will pay the filing fees and costs from the deposit and will recover reasonable attorney's fees and costs to be paid from the escrowed funds which are charged and awarded as court costs in favor of the prevailing party. All claims against Escrow Agent will be arbitrated, so long as Escrow Agent consents to arbitrate. 4. TIME FOR ACCEPTANCE OF OFFER AND COUNTEROFFERS: EFFECTIVE DATE. If this Agreement is not executed by and delivered to all parties on or before February 8, 2007, the Deposit will, at CRA's option, be returned and this offer,shall be deemed withdrawn. Unless otherwise stated, the time for acceptance of any counteroffers shall be five (5) days from the date the counteroffer is delivered. The date of this Agreement (the "Effective Date") shall be the date when the last one of the CRA and SELLER has signed or initialed this offer or the final counteroffer. 5. CLOSING. The purchase and sale transaction contemplated herein shall close on or before February 28, 2007 (the "Closing"), unless extended by other provisions of this Agreement or by written agreement, signed by both parties, extending the Closing, 6. TITLE TO BE CONVEYED. At Closing, SELLER shall convey to CRA, by Warranty Deed complying with the requirements of the Title Commitment (hereinafter defined), valid, good, marketable and insurable title in fee simple to the Property, free and clear of any and all liens, encumbrances, conditions, easements, assessments, restrictions and other conditions except only the following (collectively, the "Permitted Exceptions"): (a) general real estate taxes and special assessments for the year of Closing and subsequent years not yet due and payable; (b) covenants, conditions, easements, dedications, rights-of~way and matters of record included on the Title Commitment or shown on the Survey (defined in Section 7), to which CRA fails to object, or which CRA agrees to accept, pursuant to Section 7.1 and Section 7.2 hereof. 7.0 Investigation of the Property. During the term of this Agreement ("Feasibility Period"), CRA, and CRA's agents, employees, designees, Contractors, surveyors, engineers, architects, attomeys and other consultants (collectively, "Agents"), shall have the right, at CRA' s expense, to make inquiries of, and meet with members of Governmental Authorities regarding the Property and to enter upon the Property, at any time and from time to time with reasonable notice to SELLER and so long as said investigations do not result in a business intemlption, to perform any and all physical tests, inspections, and investigations of the Property, including but not limited to Phase I and Phase II investigations, which CRA may deem necessary. During this Feasibility Period, CRA may elect, in CRA's sole and absolute discretion, to terminate this contract and receive back all Deposits hereunder. If CRA elects to terminate this Agreement in accordance with this Section, CRA shall: (i) leave the Property in substantially the condition existing on the Effective Date, subject to such disturbance as was reasonably necessary or convenient in the testing and investigation of the Property; (ii) to the extent practicable, shall repair and restore any damage caused to the Property by CRA's testing and investigation; and (Hi) release to SELLER, at no cost, all reports and other work generated as a result of the CRA's testing and investigation. CRA hereby agrees to indemnify and hold SELLER harmless from and against all claim;;, losses, expenses, demands and liabilities, including, but not limited to, attorney's fees, for nonpayment for services rendered to CRA (including, without limitation, any . 2 PURCHASE AGREEMENT Page 3 of 12 j construction liens resulting therefrom) or for damage to persons' or prop'erty (subject to the limitation on practicability provided above) arising out of CRA's investigation of the Property. CRA's obligations lmder this Section shall survive the termination, expiration or Closing of this Agreement. However, CRA's indemnification obligations shall not exceed the statutory limits as described within Section 768.28, Florida Statutes, and CRA does not waive its sovereign immunity rights. SELLER hereby agrees to indemnify and hold CRA harmless from and against all claims, losses, expenses, demands and liabilities, including, but not limited to, attorney's fees, for nonpayment for services rendered to SELLER or for damage to persons or property (subject to the limitation on practicability provided above) arising out of CRA' s investigation of the Property. SELLER'S obligations under this Section shall survive the termination, expiration or Closing of this Agreement. 7.1 . Seller's Documents: SELLER shall deliver to CRA the following documents and instruments within five (5) days of the Effective Date of this Agreement: copies of any reports or studies (including environmental, engineering, stll"Veys, soil borings and other physical reports) in SELLER'S possession or control with respect to the physical condition ofthe Property, if any. 7.2 Title Review. Within ten (10) days of the Effective Date, CRA shall obtain, at the CRA's expense, from a Title Company chosen by CRA (hereinafter "Title Company"), a Title Commitment covering the Property and proposing to insure CRA in the amount of the Purchase Price subject only to the Permitted Exceptions, together with complete and legible copies of all instruments identified as conditions or exceptions in Schedule B of the Title Commitment. CRA shall examine the Title Commitment and deliver written notice to SELLER no later than twenty (20) days after the Effective Date notifying SELLER of any objections CRA has to the condition of title (hereinafter "CRA Title Objections"). If CRA fails to deliver the CRA Title Objections to SELLER within the aforesaid review period, title shall be deemed accepted subject to the conditions set forth in the Title Commitment. If CRA timely delivers the CRA Title Objections, then SELLER shall have thirty (30) days to diligently and in good faith undertake all necessary activities to cure and remove the CRA Title Objections (hereinafter "Cure Period"). In the event that SELLER is unable to cure and remove, or cause to be cured and removed, the CRA Title Objections within the Cure Period, to the satisfaction of CRA, then CRA, in CRA's sole and absolute discretion, shall have the option of (i) extending the Cure Period and the Closing for one additional thirty (30) day period, or (ii) accepting the Title to the Property as of the time of Closing or (iii) canceling and tenninating this Agreement, in which case, the Deposit shall be returned to CRA and the Parties shall have no fmiher obligations or liability herelmder, except for those expressly provided herein to survive termination of this Agreement. Prior to the Closing, CRA shall have the right to cause the Title Company to issue an updated Title Commitment ("Title Update") covering the Property. If any Title Update contains any conditions which did not appear in the Title Commitment, and such items render title unmarketable, CRA shall have the right to object to such new or different conditions in WIiting prior to Closing. All rights and objections of the Parties with respect to objections arising from the Titl~ Update shall be the same as objections to items appearing in the Title Commitment, subject to the provisions of this Section, , 3 PURCHASE AGREEMENT Page 4 of 12 7.3. Survey Review. CRA, at CRA's expense, may obtai~ a current boundary survey (the "Survey") of the Property, indicating the number of acres 'comprising the Property to the nearest 1/100th of an acre. If the Survey discloses encroachments on the Propeliy or that improvements located thereon encroach on setback lines, easements, lands of others or violate any restrictions, covenants of this Agreement, or applicable governmental regulations, the same shall constitute a title defect and shall be governed by the provisions of Section 7.3 concerning title objections. 8. CONDITIONS TO CLOSING. CRA shall not be obligated to close on the purchase of the Property unless each of the following conditions (collectively, the "Conditions to Closing") are either fulfilled or waived by CRA in writing: 8,1. Representations and Warranties. All of the representations and warranties of SELLER contained in this Agreement shall be true and correct as of Closing. 8.2. Condition of Property. The physical condition of the Property shall be the same on the date of Closing as on the Effective Date, reasonable wear and tear excepted. 8.3. Pending Proceedings. At Closing, there shall be no litigation or administrative agency or other govemmental proceeding of any kind whatsoever, pending or threatened, which has not heen disclosed, prior to closing, and accepted by eRA. 8.4. Compliance with Laws and Regulations. The Property shall be in compliance with all applicable federal, state and local laws, ordinances, rules, regulations, codes, requirements, licenses, permits and authorizations as of the date of CIQsing. 9. CLOSING DOCUMENTS. The CRA shall prepare, or cause to be prepared, the Closing Documents set fOlih in this Section, except for documents prepared by the Title Company. At Closing, SELLER shall execute and deliver, or cause to be executed and delivered, to CRA the following documents and instruments: 9.1. Deed. A Warranty Deed (the "Deed") conveying to CRA valid, good, marketable and insurable fee simple title to the Property free and clear of all liens, ellcwnbrances and other conditions of title other than the Permitted Exceptions, 9.2 Seller's Affidavits. SELLER shall furnish to CRA an owner's affidavit attesting that, to the best of its knowledge, no individual or entity has any claim against the Property under the applicable construction lien law; and that there are no parties in possession of the Property other than SELLER. SELLER shall also furnish to CRA a non-foreign affidavit with respect to the Property. In the event SELLER is unable to deliver its affidavits referenced above, the same shall be deemed an uncured title objection. 9.3. Closing Statement. A closing statement setting forth the Purchase Price, the Deposit, all credi,ts, adjustments and 'prorations between CRA and SELLER, all costs and expenses to be paid ~t Closing, and the net proceeds due SELLER, which CRA shall also execute 4 PURCHASE AGREEMENT Page 5 of 12 and deliver at Closing, 9.4. Corrective Documents. Documentation required to clear title to the Property of all liens, encumbrances and exceptions, if any, other than Permitted Exceptions. 9.5. Additional Documents, Such other documents as CRA or the Title Company may reasonably request that SELLER execute and deliver, and any other documents required by this Agreement or reasonably necessary in order to close this transaction and effectuate the terms of this Agreement. 10. PRORA TrONS. CLOSING COSTS AND CLOSING PROCEDURES. 10.1. Prorations. Taxes, assessments, rents, interest, insurance and other expenses of the Property shall be prorated through the day before Closing. CRA shall have the option of taking over existing policies of insurance, if assumable, in which event premilUTIs shall be prorated. Cash at Closing shall be increased or decreased as may be required by prorations to be made through the day prior to Closing. Advance rent and security deposits, if any, will be credited to CRA. Taxes shall be prorated based upon the current year's -tax with due allowance made for maximum allowable discount. If Closing occurs at a date when the current year's millage is not fixed and current year's assessment is available, taxes will be prorated based upon such assessment and prior year's millage. If current year's assessment is not available, then taxes will be prorated on prior year's tax. A tax proration based on an estimate shall, at request of either party, be readjusted upon receipt of tax bill. 10.2. Special Assessment Liens. Certified, confirmed and ratified special assessment liens imposed by public bodies as of Closing are to be paid by SELLER. Pending liens as of Closing shall be assumed by CRA. If the improvement has been substantially completed as of the Effective Date, any pending lien shall be considered certified, confirmed or ratified and SELLER shall, at Closing, be charged an amount equal to the last estimate or assessment for the improvement by the public body. 10.3. Closing Costs. Seller shall pay for all docmnentary stamps on the deed, recording the deed and half of all general closing expenses (settlement fee, courier fees, overnight packages, etc.). All other costs of closing shall be borne by CRA. 10.4 Closing Procedure. CRA shall fund the Purchase Price subject to the credits, offsets and prorations' set f01ih herein. SELLER and CRA (as applicable) shall execute and deliver to Closing Agent the Closing Documents, The Closing Agent shall, at Closing: (i) disburse the sale proceeds to SE;LLER; (ii) deliver the Closing Documents and a "marked-up" Title Commitment to CRA, and promptly thereafter, record the Deed and other recordable Closing Documents in the appropriate public records. 10.5 Existing M01igages and Other Liens. At Closing, SELLER shall obtain, or cause to be obtained, satisfaction or release of record of all mortgages, liens and judgments applicable to and enc1J1I1bering the Property. 5 PURCHASE AGREEMENT Page 6 of 12 11. j REPRESENTATIONS. COVENANTS AND WARRANTIES. , 11.1 Seller's Representations and Warranties. SELLER hereby represents, covenants and warrants to CRA, as of the Effective Date and as of the Closing Date, as follows: 11.2. Authority. The execution and delivery of this Agreement by SELLER and the consummation by SELLER of the transaction contemplated by this Agreement are within SELLER'S capacity and all requisite action has been taken to make this Agreement valid and binding on SELLER in accordance with its tenns. The person executing this Agreement on behalf of SELLER has been duly authorized to act on behalf of and to bind SELLER, and this Agreement represents a valid and binding obligation of SELLER. 11.3. Title. SELLER is and will be on the Closing Date, the owner of valid, good, marketable and insurable fee simple title to the Property, free and clear of all liens, encumbrances and restrictions of any kind, except the Permitted Exceptions (and encumbrances of record which will be discharged at Closing). 12. DEFAULT. 12.1. Purchaser's Default. In the event that this transaction fails to close due to a wrongful refusal to close or default on the part of CRA, subject to the provisions of Paragraph 12.3 below, the Deposit actually then being held by the Escrow Agent shall be paid by ~scrow Agent to SELLER as agreed liquidated damages and, thereafter, neither CRA nor SELLER shall have any ftuther obligation or liabilities WIder this Agreement, except for those expressly provided to survive the termination of this Agreement; provided, however, that CRA shall also be responsible for the removal of any liens asserted against the Property by persons claiming by, through or under CRA, but not otherwise. CRA and SELLER acknowledge that if CRA defaults, SELLER will suffer damages in an amOlmt which Calmot be ascertained with reasonable certainty on the Effective Date and that the amount of the Deposit being held by Escrow Agent most closely approximates the amowlt necessary to compensate SELLER. CRA and SELLER agree that this is a bona fide liquidated damages provision and not a penalty or forfeiture provision. 12.2. Seller's Default. In the event that SELLER shall fail to ftllly and timely perform any of its obligations or COVenalIts hereunder or if any of SELLER'S representations are untrue or inaccurate, then, notwithstanding allything to the contrary contained in this Agreement, CRA may, at its option: (l) declare SELLER'S in default under this Agreement by notice delivered to SELLER, in which event CRA may terminate this Agreement and demand that the Deposit be returned, including all interest thereon if any, in accordance with Section 3 alId neither Party shall have any furlher rights hereunder or (2) seek specific performance of this Agreement, without waiving any action for damages. 12.3. Notice of Default. Prior to declaring a default and exercising the remedies described herein, the non-defaulting Party shall issue a notice of default to the defaulting Party describing the event 9r condition of default in sufficient detail to enable a reasonable person to determine the action necessary to cure the default. The defaulting Party shall have fifteen (15) . 6 PURCHASE AGREEMENT Page 7 of 12 I days from delivery of the notice during which to cure the default, provided, l}owever, that as to a failure to close, the cure period shall only be three (3) Business Days from the delivery of notice. Both parties agree that if an extension is requested, such extension shall not be unreasonably withheld. If the default has not been cured within the aforesaid peliod, the non-defaulting Party may exercise the remedies described above. 12.4. Survival. The provisions of this Section 12 shall survive the termination of this Agreement 13. NOTICES. All notices required in this Agreement must be in writing and shall be considered delivered when received by certified mail, retmn receipt requested, or personal delivery to the following addresses: If to Seller: Thomas D. Walsh 4482 St. Andrews Drive Boynton Beach, FL 33463 If to Pmchaser: Boynton Beach Community Redevelopment Agency 915 S. Federal Highway Boynton Beach, Florida 33435 PH: 561/737-3256 FX: 561/737-3258 With a copy to: Kenneth G. Spillias, Esq. Lewis, Longman & Walker, P.A. 1700 Palm Beach Lakes Boulevard, Suite 1000 West Palm Beach, Florida 33401 PH: 561/640-0820 FX: 561/640-8202 14. BINDING OBLIGATION/ASSIGNMENT. The terms and conditions of this Agreement are hereby made binding on, and shall inure to the benefit of, the successors and permitted assigns of the Parties hereto. SELLER may not assign its interest in this Agreement without the prior written consent of CRA, which shall not be unreasonably withheld. CRA shall have the right to assign this Agreement to the City of Boynton Beach (the "City") without the prior consent of SELLER and the CRA shall be released from any further obligations and liabilities under this Agreement The CRA may not assign this Agreement to any other party without the prior written approval of SELLER, which shall not tUlreasonably withheld. If eRA has been dissolved as an entity '^fhile this Agreement and/or the attached Lease Agreement are in effect, the provisions of section 163.357(1), Florida Statutes, (as it may be amended from time to time), shall apply. 15. RISK OF LOSS. In the event the condition of the Property, or any part thereof, is materially altered by an act of God or other natural force beyond the control of SELLER, CRA may elect, as its sole. option, to terminate this Agreement and the parties shall have no further obligations under this agreement and all Deposits hereunder shall be refunded to CRA, or CRA 7 PURCHASE AGREEMENT Page 8 of 12 I may accept the Property without any reduction in the value of the Pfoperty. . 16. BROKER FEES. TIle Parties hereby confirm that neither of them has dealt with any broker in connection with the transaction contemplated by this Agreement. Each Party shall indemnify, defend and hold harmless the other Party from and against any and all claims, losses, damages, costs or expenses (including, without limitation, attorney's fees) of any kind or character arising out of or resulting from any agreement, arrangement or understanding alleged to have been made by either P8lty or on its behalf with any broker or finder in connection with this Agreement. The provisions of tIlls Section shall survive Closing or termination of this Agreement. 17.0 Environmental Conditions. 17 .1. For purposes of tills Agreement, pollutant ("Pollutant") shall mean any hazardous or toxic substance, material, or waste of any kind or any contaminant, pollutant, petroleum, petrolemn product or petrolelUn by-product as defined or regulated by environmental laws. Disposal ("Disposal") shall mean the release, storage, use, handling, discharge, or disposal of such Pollutants. Environmental laws ("Enviromnental Laws") shall mean' any applicable federal, state, or local laws, statutes, ordinances, rules, regulations or other governmental restrictions. 17.1.1 As a material inducement to eRA entering into tills Agreement, SELLER hereby warrants and represents the following, as applicable: (1) That SELLER and occupants of the Propelty have obtained and are in full compliance with any 8lld all permits regarding the Disposal of Pollutants on the Property or contiguous property owned by SELLER, to the best of SELLER' knowledge. (2) SELLER is not aware nor does it have 8lIY notice of any past, present or future events, conditions, activities or practices which may give rise to any liability or form a basis for any claim, demand, cost or action relating to the Disposal of any Pollutant on the Property. SELLER is not aware nor does it have any notice of any past, present or futtu'e events, conditions, activities or practices on contiguous property that is owned by SELLER which may give rise to any liability or fonn a basis for any claim, demand, cost or action relating to the Disposal of 8lIY Pollut8llt affecting the SELLER property. (3) There is no civil, criminal or administrative action, suit, claim, demand, investigation or notice of violation pending or, to the best of tImt entity's knowledge, threatened against SELLER or the Property relating in any way to the Disposal of Pollutants on the Property, any portion thereof, or 9n any contiguous property owned by SELLER. 17.2 Additional Wal1.'anties and Representations of SELLER. As a material inducement to CRA entering into this Agreement, SELLER, to the best of SELLER' information and belief, hereby represents and wall'ants the following: 17.2.1 There are no pending applications, pelmits, petitions, contracts, approvals, or other proceedings with 8lIY governmental or quasi-governmental authority, including but not , 8 PURCHASE AGREEMENT Page 9 of 12 , limited to, CRA, mWlicipalities, cOWlties, districts, utilities, and/or federlll or state agencies, concerning the use or operation of, or title to the Property or any portion thereof and SELLER has not granted or is not obligated to grant any interest in the Property to any of the foregoing entities, 17.2.2 There are no facts believed by SELLER to be material to the use, condition and operation of the Property in the manner that it has been used or operated, which it has not disclosed to CRA herein, including but not limited to unrecorded instruments or defects in the condition of the Property which will impair the use or operation qf the Property in any manner. 17.2.3 To the best of SELLER' knowledge, the Property and the use and operation thereof are in compliance with all applicable county and govemmental laws, ordinances, regulations, licenses, pemlits and authorizations, including, without limitation, applicable zoning and environmental laws and regulations. 17.3 SELLER Deliveries. SELLER shall deliver to CRA the following documents and instruments within ten (10) days of the Effective Date of this Agreement, except as specifically in~icated: 17.3.1 Copies of any reports or studies (including engineering, environmental, soil borings, and other physical inspection reports), in SELLER' possession or control with respect to the physical condition or operation of the Property, ifany. 17.3.2 Copies of all licenses, variances, waivers, permits (including but not limited to all surface water management permits, wetland resomce permits, consumptive use permits and enviromnental resource pennits), authorizations, and approvals required by law or by any govemmental or private authority having jurisdiction over the Property, or any portion thereof (the "Governmental Approvals"), which are material to the use or operation of the Property, if any. 17.3.3 Prior to the Closing Date, SELLER shall execute and deliver to CRA any and all documents and instruments required by CRA, in CRA's sole and absolute discretion, which: (i) effectuate the transfer to CRA of those Governmental Approvals, or portions thereof which are applicable to the Property, that CRA desires to have assigned to it, and/or (ii) cause the Property to be withdrawn from any Governmental Approvals. No later than thiliy (30) days prior to the Closing Date, SELLER shall remedy, restore, and rectify any and all violations of the Governmental Approvals (including but not limited to any and all portions of the smface water management system, mitigation areas or other items which do not comply with the Governmental Approvals or applicable rules), if any. SELLER warrants that there will not be, at the time of Closing, any unrecon;led instruments affecting the title to the Property, including, but not limited to any conveyances, easements, licenses or leases. 18. MISCELLANEOUS. 18.1, General. This Agreement, and any amendment hereto, may be executed in any number of countyrparts, each of which shall be deemed to be an original and all of which shall, together, constitute one and the same instrument. The section and paragraph headings . 9 PURCHASE AGREEMENT Page 10 of 12 I herein contained are for the purposes of identification only and shall npt be considered in construing this Agreement. Reference to a Section shall be deemed to be a reference to the entire Section, unless otherwise specified. No modification or amendment of tIllS Agreement shall be of any force or effect unless in writing executed by Parties. This Agreement sets fOlih the entire agreement between the Parties relating to the Property and all subject matter herein and supersedes all prior and contemporaneous negotiations, understandings and agreements, written or oral, between the Parties. This Agreement shall be interpreted in accordance with the laws of the State of Florida. The Parties hereby agree ,that jurisdiction of any litigation brought arising out of this Agreement shall be in the Fifteenth Judicial Circuit in and for Palm Beach,County, Florida, or, should any cause of action be limited to federal jurisdiction only, in the United States District Court for the Southern District Court of Florida. 18.2. Computation of Time. Any reference herein to time periods which are not measured in Business Days and which are less than six (6) days, shall exclude Saturdays, Sundays and legal holidays in the computation thereof. Any time period provided for in this Agreement which ends on a Saturday, Sunday or legal holiday shall extend to 5:00 p.m. on the next full Business Day. Time is of the essence in the performance of all obligations under this Agreement. Time periods commencing with the Effective Date shall n0t include the Effective Date in the calculation thereof 18.3. Waiyer. Neither the failure of a pal1y to insist upon a strict perfomlance of any of the terms, provisions, covenants, agreements and conditions hereof, nor the acceptance of any item by a party with knowledge of a breach of this Agreement by the other party in the perfOlmance of their respective obligations hereunder, shall be deemed a waiver of any rights or remedies that a party may have or a waiver of any subsequent breach or default in any of such terms, provisions, covenants, agreements or conditions. This paragraph shall survive termination of this Agreement and the Closing, 18.4. Construction of Agreement. The Pat1ies to this Agreement, through counsel, have participated freely in the negotiation and preparation hereof. Neither this Agreement nor allY amendment hereto shall be more strictly construed against any of the Parties. As used in this Agreement, or any amendment hereto, the masculine shall include the feminine, the singular shall include the plural, and the plural shall include the singulal', as the context may require. Provisions of this Agreement that expressly provide that they survive the Closing shall not merge into the Deed. 18.5. Severability. If any provision of this Agreement or the application thereof shall, for any reason and to allY extent, be invalid or lmenforceable, neither the remainder of this Agreement nor the application qf the provision to other persons, entities or circumstances shall be affected thereby, but instead shall be enforced to the maximum extent permitted by law. The provisions of this Section shall apply to any amendment of this Agreement. 18.6 Handwritten Provisions. Handwritten provisions inse11ed in this Agreement and initialed by CRA and SELLER shall control all printed provisions in conflict therewith. 18.7 . Waiver of Jw-y Trial. As an inducement to eRA agreeing to enter into this 10 PURCHASE AGREEMENT Page 11 of 12 I Agreement, CRA and SELLER hereby waive trial by jury in any action or prpceeding brought by either party against the other party pertaining to any matter whatsoever arising out of or in any way connected with this Agreement. 18.8. Attorneys Fees and Costs. Should it be necessary to bring an action to enforce any of the provisions of this Agreement, reasonable attomeys' fees and costs, including those at the appellate level, shall be awarded to the prevailing pm1y. 18.9 Binding Authority. Each pmiy hereby represents and warrants to the other that each person executing this Agreement on behalf of the CRA and SELLER has full right and lawful authority to execute this Agreement and to bind and obligate the party for whom or on whose behalf he or she is signing with respect to all provisions contained in this Agreement. 18.10 Recording, This Agreement may be recorded in the Public Records of Palm Beach County, Florida. 18.11 Survival. The covenants, wan-anties, representations, indenmities and undertakings of SELLER set forth in this Agreement, shall survive the Closing, the delivery and recording of the SELLER Property Deed and CRA's possession of the Propeliy, 18.12 SELLER Attorneys' Fees and Costs. SELLER acknowledges m1d agrees that SELLER shall be responsible for its own attorneys' fees and all costs, if any, incurred by SELLER in connection with the transaction contemplated by this Agreement. SIGNATURES ON FOLLOWING PAGE 11 PURCHASE AGREEMENT Page 12 of 12 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective date. BOYNTON BEACH COMMUNI Y REDEVELOPMENT AGENCY SELLER By: Henderson Tillman, Chairperson Date: Date: z.. 7 ~?- Witnesses: ~~ Witnessesc -f/c/62& C~ 7<_l) ~ 1<P a rclv '0 [/I ~111W l iSn a5]{ ..J ~tName Print Name cUA ~ i~(t?fi' ]/ It./L l/r if I J/tt/ L 61cj))( / "I) Y / /;:.s~ ;?; /2; e ;- Print Name Print Name APp,r.g;vedas to form r,ld lega~"sufficiency: </; ~~ ~ jXU/~ ,~l . vJ tRA!ttorney { I I:\Client Documents\Boyntoll Beach CRA\375-002\Misc\Robinson Purchase Agreement.doc 12 SELLER: ADDENDUM TO PURCHASE AGREEMENT. THOMAS D. WALSH - (hereinafter "SELLER") BUYER: BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY _ (hereinafter "CRA" or "PURCHASER") LEGAL: Lots 13 and 14, Block 4, ORIGINAL TOWN OF BOYNTON BEACH, according to the Plat thereofas recorded in Plat Book 1, Page 23, of the public Records of Palm Beach County, Florida. ("Property") The parties agree that the terms and conditions of the Purchase Agreement shall be amended as described herein and those changes shall be incorporated into the Purchase Agreement by and between the Seller and CRA as follows: Section 3 -The Earnest Money Deposit shall be in the amount of $42,500,00 payable not later than February 16,2007. Section 4 - TIME FOR ACCEPTANCE OF OFFER AND COUNTEROFFERS; EFFECTIVE DATE shall be amended to delete "Janumy 11,2007" and replaced with the date of "February 16,2007", Section 5 - Closing Date: Closing Date shall be amended to be February 26, 2007, Section 6 - Permitted Exceptions: Subsection (b) shall be deleted in its entirety and replaced with the following language: "(b) covenants, conditions, easements, dedications, rights or way, and matters of record which are common to the plat or subdivision; existing zoning and governmental regulations; and oil, gas and mineral rights of record so long as there is not right of entry; provided there exists at closing no violation of the foregoing and none of them prevents CRA' s intended use of the Property as a commercial office building. " Section 7.0- The opening sentence of this Section 7,0 shall be amended to delete the words "During the term of this Agreement ("Feasibility Period")...." and shall be replaced with "Within ten (10) days after the Effective Date, ("Feasibility Period")..." The following language shall be deleted from Section 7.0, Subsection (i): "subject to such disturbance as was reasonably necessary or convenient in the testing and investigation of the Property; " , The follow'ing language shall be deleted from Section 7,0, Subsection (ii): "to the extent practicable..," ADDENDUM TO PURCHASE AGREEMENT SELLER: THOMAS D. WALSH BUYER: BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY Page 2 of 5 The following language shall be added to Section 7.0, as Subsection (iv): "(iv) CRA shall repair all damages to the Property resulting from the inspe<?tions, return the Property to its pre-inspection condition, and provide seller will paid receipts for all work done upon the completion of the repairs." The following language shall be deleted from Section 7.0 - The second to last sentence of Section 7.0 shall be deleted in its entirety and replaced with the following: "CRA shall have the right to conduct investigation and inspection the Property as stated in the Agreement during the Feasibilty Period. CRA and Seller acknowledge that Seller is selling the Property in "AS IS " condition," Section 7.2 -- The following language shall be added to Section 7.2: "Notwithstanding. anything contained herein, Seller, may elect not to cure any CRA Title Objection in the event Seller reasonably believes that any defect cannot be cured within the Cure Period. Further, notwithstanding Seller's obligation to cure any title defects, Seller, in Seller's sole and absolute discretion, shall not be obligated to file a lawsuit to cure any title defect or CRA Title Objection." Section 7.3 - The reference in this Section to "Section 7.3" shall be corrected to refer to "Section 7,2." Section 10.3 - The language contained in Section I 0.3 shall be deleted in its entirety and replaced with the following: "Seller shall pay the documentary stamp tax on the deed; title search fees and other closing fees not to exceed $300.00; courier and/overnight fees incurred on behalf of the Seller and recording fees to record any corrective documents for title, All other costs of closing and related title service fees shall be borne by CRA." ADDENDUM TO PURCHASE AGREEMENT SELLER: THOMAS D. WALSH BUYER: BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY Page 3 of 5 Section 13 - The following language shall be amended to Section 13 for Seller's Notice address: If to SELLER: Thomas D. Walsh 4485 St. Andrews Drive Boynton Beach, FL 33463 "With copy to: Lorri J. Kolbert Klein, Esq. Posess and Walser, P,A. 7015 Beracasa Way, Suite 201 Boca Raton, FL 33433 PH. 561-392-4100 FAX 561-392-4177 Section 16 Broker Fees:. The first sentence of this Section 16 shall be amended to add the underlined language so as to state as follows: "The Parties hereby confirm that neither of them has dealt with any broker in connection with the transaction contemplated by this Agreement except for the Listing Alfent. REGENCY REALTY. which SELLER shall be responsible to pay an agieed upon commission. Further. Seller hereby discloses that Seller is a Florida licensed real estate agent. " Section 17.0 - The following language shall be added to Section 17.0: "Notwithstanding anything contained in the Contract, SELLER hereby discloses that the Property was built prior to 1978 and therefore the Property may have previously contained lead based paint. SELLER is not in possession of any reports regarding lead-based paint" Section 17.1.1 - The first sentence of th Section 17.1.1 shall be amended to add the underlined language So as to state as follows: "As a material inducement to CRA entering into this Agreement, SELLER hereby warrants and represents, to the best of SELLER'S information and belief. the following, as applicable:,,,': ADDENDUM TO PURCHASE AGREEMENT SELLER: THOMAS D. WALSH BUYER: BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY Page 4 of 5 Section 17.2.2 - The following language shall be added to Section 17.2,2: " Notwithstanding the statements contained herein, SELLER has advised anc:t CRA is aware that the current zoning for the Property is as residential/commercial and further that the zoning is currently changing to commerCial low density." Section 18.10: The language contained in Section 18,10 shall be deleted in its entirety and replaced with the following: "Neither this Agreement nor any notice of it shall be recorded in the Public Records of Palm Beach County, Florida." The following Section 19.1, Section 19.2 and Section 19.3 shall be added to the Agreement: Section 19.1 Radon: Radon is a naturally occurring radioactive gas that, when it has accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time, Levels of Radon that exceed federal and state guidelines have been found in buildings in Florida.. Additional information regarding radon and radon testing may be obtained from the County public health uni t. Section 19.2 1031 Exchange: Ifeither SELLER or CRA wish to enter into a like-kind exchange (either simultaneous with Closing or deferred) with respect to the Property under Section 1031 of the Internal Revenue Code ("Exchange"), the other party shall cooperate in all reasonable respects to effectuate the Exchange, including the execution of documents; provided (1) the cooperating party shall incur no liability or expense related to the Exchange and (2) the Closing shall not be contingent upon, nor extended or delayed by such Exchange. Section 19.3 Counterparts and Inconsistencies: This Addendum may be executed in one or more counterparts, each of which shall be an original, bu t all of which shall together constitute one and the same fully executed Addendum to Contract. In the event of any inconsistencies between the provisions of this Addendum and the provisions of the Agreement, the provisions of this Addendum shall prevail and contra 1. ADDENDUM TO PURCHASE AGREEMENT SELLER: THOMAS D. WALSH BUYER: BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY Page 5 of 5 ALL OTHER TERMS AND CONDITIONS REMAIN THE SAME. IN WITNESS WHEREOF, the parties have executed this addendum the date set forth below. SELLER: :2 '1-G1~ : ~... 06 ,. ~~ Date Hen erson Tillman, Chairperson Date APPROVED AS TO FORM AND LEGAL SUFFICIENCY: , /' l' if5f:;/t:J/P/4~~ Date1 <:-2- - i / 'D 7 HUD-1 A. Settlement Statement B, Type of Loan U.S. Department of Housing and Urban Development OMB No. 2502-0265 o 1. FHA 04.VA o 2. FmHA 0 3. Conv. Unin o 5. Cony. Ins. 6. File Number 07-0010 7. Loan Number 8. Mortg. Ins, Case Num. ID: C. NOn:: This form is furnished to give you a statement of actual settlement costs. Amounts paid to and by the settlement agent are shown. Items marked "(p.o.c.)" were paid outside the closing; they are shown here for informational purposes and are not included in the totals. D. NAME OF BORROWER: Address of Borrower: Boynton Beach Community Redevelopment Agency, a public agency created pursuant to Chapter 163, Part Ill, of Florida Statutes 915 South Federal Highway, Boynton Beach, Flonda 33435 Thomas D. Walsh, a single man 4482 St. Andrews Drive, Boynton Beach, Florida 33436 TIN: 138-48-8593 E. NAME OF SELLER: Address of Seiter: F. NAME OF LENDER: Address of Lender: G. PROPERTY LOCATION: H. SETTLEMENT AGENT: Place of Settlement: 211 East Ocean Avenue, Boynton Beach. Florida 33435 Lewis, Longman & Walker, PA 1700 Palm Beach Lakes Blvd, SUite 1000, West Palm Beach, FlOrida 33401 TIN: 65-0500793 Phone: 561-640.0820 I. SETTLEMENT DAn:: 2/26/07 DISBURSEMENT DAn:: 2/26/07 J Sum!l1;)ryoftJorro\.(r~,!r TY1Cll0l1 K c'UI111H,()1 '11'1 II,] ,jrllOIl 10U Gras alTlount rJUl' frOIl) borrO\Jcr ..:I ( 0 l,ro':,c IlllOUllt (j,1l I ',elh I IOI.Conttlctsales rice 102. Personal property 103. Settlement charges to borrower (Line 1400) 104. 105. AdJustments for Items p,nd by seller III adv<lnce 8S0,OOO.00 401. Contract sales price 402. Personal pro r 4,965.60 403. 404. 405. 850,000.00 106. Cit /town taxes 107. County taxes 108. Assessments Adjustments for Items paid by seller In <1d JilrlCe 406. Cit}'/Iown taxes 407. Coun taxes 408. Assessments 109. ItO. Itl 112. 409 4tO. 411. 412. 8S4 965 60 420 Groll amount due to seller. 85000000 120. Groll amount due rrom borrower: 500 Reductions III amount due to seller 42,500.00 SO I, Excess deposit (see instructions) 502 Settlement char es 10 seller (line 1400) 503. Existin loan(s) taken subject to 504.Pa'ofToffirslmort a eloan 50S. Pa ofTofsecoodmort 8 e loan 506. De osits held b seller 507. Principal amt orman 8 e held by seller 508. 509. 8,184.68 20 I . Deposit or earnest money 202. Principal amount of new loao(s) 203. Existing loan(s) taken subject to 204. Principal amount of second mortga e 205. 206. 207. Principal amt of mortKa e held by seller 208. 209. Adjustments for Items unpaid by seller /\uJustmcnIS for Itel11S unpaid by selin 210. Ci /town taxes 211. Coun taxes 212. Assessments 5JO. City/town taxes 511. Coon taxes 512. Assessments 513. 514. 5t5. 5t6 5t7. 518 519 42,500,00 520. Total reductions in amount due seller: 8,184.68 213. 2t4. 215. 216. 2t7. 218. 219. 220. Total paid by/ror borrower: 301. Gross amount due from borrower (line 120) 302. Less amount paid by/for the borrower (line 220) 85.,965.60 601 Gross amount due to seller (line 420) (42,500.00) 602 Less total reductions in amount due seller (line 520) 850,000.00 (8,184.681 303. Cash ( 0 From 0 To ) Borrower' 812,465.60 603 Cash ( 0 To 0 From ) Seller 841,815.32 Substitute Form 1099 Seller Statement: The information contained in blocks E, G, H, and I and on line 401 is important tax information and is being furnished to the IRS. If you are required to file a return, a negligence penalty or other sanction will be imposed on you if this item is required to be reported and the IRS determines that it has not been reported. Seller Instructions: If this real estate was your principal residence, file Form 2119, Sale or Exchange of Principal Residence, for any gain, with your tax return; for other transactions, complete the applicable parts of Form 4797, Form 6262 and/or Schedule D (Form 1040). ,Borrower's Initial(s): reller'S Initial(s): DoubleTlme@ HUD-1 u.s. Department of Housing and Urban Development Page 2 Paid from Paid from 700. Total Sales/Brokers Com. based on price $850,000.00 @ D/o= Borrower's Selle~s 701 %10 Funds at Funds at 702 %10 Settlement Settlement 703. Commission naid at settlement 704. Commission to Reacnc\I Really 500.00 801. Loan orilZination fee %10 802. Loan discount %10 803 AporaisaJ fee 10 804. Credit report 10 805 Lender's inspection fee to 806 Mortgaee insurance application fee 10 807. Assumption Fee to 808 10 809 10 810. to 81!. 10 90l. Interest from 10 @J Ida\! 902 MortuRe insurance oremium for months 10 903. Hazard insurance nremium for vears 10 904. Flood insurance premium for vears 10 905. vears (0 . 1001 Hazard insurance months (al ocr month 1002. Mortllaae insurance months (ij) per month 1003. City proocrtv la.xes months(Q) per month 1004. County propertv taxes months w per month 1005. Annual assessments months (w. Dee month 1006 Flood insurance months @ per month t007 months(Q! DCr month 1008. monthsrii1 per month 1009. ARRrcRate accountinR adiustment 1 to I. Settlement or closiRl'! fee to Lewis. LonRman& Walker, P.A. 90.00 90.00 1102. Abstract or title search to Attorneys' Title Insurance Fund, Inc 75.00 75.00 1103. Title examination to Lewis Lonllman & Walker, P.A 50.00 50.00 1104. Title insurance binder to 1105 Document preparation to Lewis, Longman & Walker, P.A 75.00 75.00 1106. Notary fees 10 1107 Attorney's Fees 10 (includes above item numbers ) 1108. Title Insurance to Attornevs' Title Insurance Fund, Inc '1iIIi (includes above item numbers: 1109. Lender's coverage (Premium): 1110 Owner's coveral.!e (Premium): $850,00000 ($4,325.00) 1111. Endorse: 1112. Funding Fee to Lewis, Longman & Walker, P.A. 25.00 25 00 1113. Courier Fees to Lewis, Longman &: Walker, P.A. 25.00 1201. Recordin fees Deed $1060 Mon.a.e(s) Releases 10.60 1202. Citv/county tax/stamps Deed Monoaoe(s) 1203. State tax/stamps Deed $5,950.00 Monoa.e(s) 5,95000 1204. 10 1205. to 1301. Survey to TaCltet Surveving, Inc. 300.00 1302. Pese Inspection 10 1303 Municioal Lien Search to City of Boynton Beach 15.00 1304. 2007 Real Estate Taxes to Palm Beach County Tax Collector 644.68 1305. Attorney's Fees to Posess& Walser, P,A. 750.00 1306. 10 1307 to 1308. 10 1309. I ( Enter on lines 103, Section J and 502, Section K ) 4,965.60 8,184.68 I have carefully reviewed the HUO.1 Settlement Statement and to the best of my knowledge and belief, it is a true and accurate statement of all receipts and disbursements made on my account or by me in this transaction. I further certify that I have received a copy of the HUD.1 Settlement Statement Boynton Beach Communitl' Redevelopment Agency By' Borrower Seller Thomas D. Walsh Borrower Seller The HUD.1 Settlement Statement wtlich I have prepared is a true and accurate account of this transaction I have caused, or will cause, the funds to be disbursed in accordance with this statement. Lewis, Longman & Walker, PA. By: As les Authorized Representative Date WARNING: It is a crime to knowingly make false statements to the United States on this or any other similar form. Penalties upon conviction can include 8 fine and imprisonment. For d.lails ....: Till. 18 U.S. Cod. S.ctlon 1001 and S.ctlon 1010. DoubleTlme@ 111t11l ql ~ 1111111111111111111111111 ~IIIIIIIIIIIIIIII Lewis, Longman & Walker, P.A. 1700 Palm Beach Lakes Blvd. Suite 1000 West Palm Beach, FL 33401 561-640-0820 File Number: 07-0010 Will Call No.: CFN 2QH2170098:::183 OR BK 21456 PG 1186 RECORDED 02/28/2007 09:42:53 Palm Beach County, Flo:r'ida AMT 850,000.00 Doc Stamp 5,950.00 Sharon R. Bock,CLERK & COMPTROLLER Pg 118& ; (1 pg ) Prepared bv and return to: Kenneth W. Dodge Parcel Identification No. 08-43-45-28-03-004-0130 [Space Above This Line For Recording Data] Warranty Deed (STATUTORY FORM - SECTION 689.02, F.S.) This Indenture made this 26th day of February, 2007 between Thomas D. Walsh, a single man whose post office address is 4482 St. Andrews Drive, Boynton Beach, FL 33436 ofthe County of Palm Beach, State of Florida, grantor*, and Boynton Beach Community Redevelopment Agency, a public agency created pursuant to Chapter 163, Part Ill, of Florida Statutes whose post office address is 915 South Federal Highway, Boynton Beach, FL33435 of the County of Palm Beach, State of Florida, grantee*, Witnesseth, that said grantor, for and in consideration of the sumof1EN AND NO/100 DOLLARS ($10.00) and other good and valuable considerations to said grantor in hand paid by said grantee, the receipt whereof is hereby acknowledged, has granted, bargained, and sold to the said grantee, and grantee's heirs and assigns forever, the following described land, situate, lying and being in Palm Beach County, Florida, to-wit: Lots 13 and 14, Bock 4, ORIGINAL TOWN OF BOYNTON BEACH, according to the plat thereof, recorded in Plat Book 1, Page 23 ofthe Public Records of Palm Beach County, Florida. SUBJECT TO restrictions, reservations, covenants and easements of record which are not reimposed by this deed and all applicable zoning ordinances. and said grantor does hereby fully warrant the title to said land, and will defend the same against lawful claims of all persons whomsoever. * "Grantor" and "Grantee" are used for singular or plural, as context requires. State of Florid a County of Palm Beach The foregoing instrument was acknowledged before me this 23rd day of February , 2007 by Thomas D. W,I,', who LI . p,,,o..lIy knowo 0' [X]," pcoduo'" , driv,r' 1i",u",,, idontifi"";on. ;;; 1/' . . .~ [Notary Seal] Notary Public ~~ ~'"" Printed Name: My Commission Expires: :~~...t'..6OiLo,ft".;Ad>>;~'!!Ic'\:'l~";':;;~l!;~~:',~~~] ;,- ,,',-:N~f::~:.. LISA STRAUSS 'i ~l{:r'p."\ ..:;t~ ;,,,W COMMiSSION # DO 336813 k ~I" T'ffif '.. '-XPIRES J" 1) 20ng ,j 1 ;;'-:'~7"9..0"'..: -= : Uly~. \, j~ ~! ~#;j~' ~:-:';'~Q~.~- PO;"jilu Tr.iU No1.:try PUll11C Underwnt1trS i) :-~_~7?::;,~;:'~~;~~,""..~"';;:"-_::i;:~-\W:~~~~.;i~:;;";~~,..~ DoubleTimeQll Purchase of Ocean Breeze · Timeline of Purchase · HOB Community Redevelopment Plan · September 6, 2006 CRA Board Meeting Agenda (Discussion of Ocean Breeze) · September 6, 2006 Discussion of Ocean Breeze Incentives Agenda Item Cover Sheet · Minutes from September 6, 2006 CRA Board Meeting · October 25, 2006 CRA Board Meeting Agenda (Incentive Recommendations) · October 25,2006 Ocean Breeze Update Incentives Recommendations Agenda Item Cover Sheet · Minutes from October 25, 2006 CRA Board Meeting · Appraisal Information o Developer Appraisal o CRA Appraisal o Appraisal Review · March 13, 2007 CRA Board Meeting Agenda (Ocean Breeze Options and Consideration of Issuing an RFP for Ocean Breeze) · Minutes from March 13, 2007 CRA Board Meeting Response to City Commissioner Allegations that the CRA Purchased Boynton Terrace (Ocean Breeze) Above Appraised Value and Under Suspicious Circumstances The CRA Board of Directors was operating under the following assumptions when they considered the purchase of the Boynton Terrace site: · December 2004 - Larry Finklestein, Chairman of the CRA Board steps down from the Board. · February 2005 - Mayor Taylor notifies Larry Finklestein that Boynton Terrace is available for purchase. · September 2005 - Larry Finklestein of Affordable Housing, LLC purchases the assets of Boynton Associates which includes the former Boynton Terrace site. · November 2005 - Boynton Associates has site plan approved for townhomes at west side of Boynton Terrace site. · January 2006 - CRA Board approved an incentive package to Boynton Associates comprised of $1,344,000 Direct Incentive Funding Agreement (DIF A) and a waiver of a CRA demolition lien of$37l,000. · March 2006 - Mr. Finklestein in near fatal car crash and cannot move project forward. · June 2006 - Mr. Finklestein reports to CRA staff that he cannot build the project due to changed market conditions and needs additional incentives. · July - September 2006 - CRA staff and TIF consultant negotiate with Mr. Finklestein for a DIF A valued at $3.5M. · September 2006 - At the CRA Board meeting the CRA's TIF consultant states that due to the fact that Mr. Finklestein was not able to provide specific financial information to the CRA about the project, the CRA should investigate purchasing the property. CRA staff orders an appraisal from Anderson and Carr. · October 2006 - The CRA's appraisal states that the market value is $6.4M. · October 2006 - CRA Board is advised by staff that negotiations for a DIF A have come to an impasse. Staff advises the Board that Mr. Finklestein offered to sell the property to the CRA at his appraised value of $8.2M. The difference between Mr. Finklestein's appraisal and the CRA's appraisal is $1.8M. The Board motions to have staff order an independent review of both appraisals. · October 2006 - Staff orders an appraisal review from Lawson Valuation Group. The appraisal review confirms that the CRA's appraisal was within the professionally acceptable range of value at $6.4M. · November 2006 - CRA approves purchase of .54 acres in front of west side of Boynton Terrace for $470,000 (Peters). Page Two/Boynton Terrace Commissioner Allegation Response BT · February 2007 - MLK Corridor Development Agreement meeting at City Hall. Present were Kurt Bressner, City Manager, Jim Cherof, City Attorney, representatives from the CRA and Intown Partners. Richard Baron of Intown Partners asks that the Boynton Terrace be added to the scope of the development agreement. The City Manager and Attorney state that the Boynton Terrace site will not be part of the scope of the MLK Corridor agreement. · March 2007 - CRA staff negotiates a purchase agreement with Mr. Finklestein and brings it to the Board for discussion. The Board approves the purchase agreement for $6.4M plus the value of the Palm Beach County Impact Fee waivers. · March 2007 - The CRA Board approves issuing a Request for Proposals on the site. ' · May 2007 - The CRA closes on the Boynton Terrace site with Boynton Associates. · May 31, 2007 - Three financially feasible proposals are received by the CRA. · July 10, 2007 - CRA Board to select proposer to begin negotiations on Development Agreement for the site. · Please note, average cost per acre of the Boynton Terrace Site (including Peter's parcel) _ $839,759 HEART OF BOYNTON COMMUNITY REDEVELOPMENT PLAN Strategic Planning Group, Inc. Economics. Planning. Economic Development P.o. Box 550590 Jacksonville, FL 32255-0590 Phone (800) 213- PLAN Fax (904) 731-3006 in association with RMPK Group JEG Associates The Heart of Boynton Redevelopment Master Plan Churches Heart of Boynton contains 18 churches covering a wide range of denominations. The location of these churches in the study area has both positive and negative impacts. Churches represent an important source of leadership if church leaders can form an active Ministerial Alliance (which has yet to develop). On the negative side, there are probably too many churches located in such a small area. The churches do not contribute advalorem or TIF moneys to the CRA and several churches are in violation of parking requirements and other LDRs and several are in need of major fa9ade improvements. Constraints to Redevelopment Constraints are largely confined to a limited number of issues: (1) Cherry Hills Public Housing (and its image to the entire area), (2) Boynton Terrace, (3) Small commercial businesses catering to these two developments (EZ Mart, etc.), lack of developable acreage, and (5) upkeep of vacant parcels and general code enforcement. Cherry Hills Public Housing Cherry Hills is the single largest impediment to the redevelopment of Heart of Boynton. The area is a major center of crime, the aesthetics are bad, and the general image is that of a "hood" which permeates the entire area. Conversations are been held with the Palm Beach Public Housing Authority to enable the City to take over the Project. Under that plan, residents would be given Section 8 vouchers to obtain housing elsewhere, and the City would demolish the projects buildings and according to this redevelopment plan replat the area to accommodate a large parcel size. As discussed earlier and again in the next section, with the removal of Cherry Hills, a new neighborhood will be developed - "Poinciana Heights" using both the magnet Poinciana Elementary school and a redeveloped Wilson Center as its center-piece. Boynton Terrace Boynton Terrace is a project based Section 8 Housing Project located on either side of Seacrest Boulevard. As mentioned earlier, the western complex does not fit into the single family neighborhood of the historic Boynton Hills development. The complex is under pressure by HUD to improve its facilities and overall management. Small Commercial Business Problems Several small commercial businesses (including EZ Mart, Cherry Hill Store, etc.) primarily serve Cherry Hills and Boynton Terrace and serve as major loitering areas and centers for Strategic Planning Group, Inc. 1 (800) 213-PLAN Page 45 ~~NY~Te~ eRA ill East Side....West Side"" Seaside Renaissance If any person decides to appeal any decision made by the Board with respect to any matter considered at this meeting, he or she will need a record of the proceedings, and that, for such purpose, he or she may need to ensure that a verbatim record of the proceedings is made, which record includes the testimony and evidence upon which the appeal is to be based. CRA Board Meeting Tuesday, September 12, 2006 City Commission Chambers 6:30 P.M. I. Call to Order - CRA Board Chairman, Henderson Tillman II. Pledge to the Flag III. Roll Call IV. Agenda Approval A. Additions, Deletions, Corrections to the Agenda B. Adoption of Agenda V. Public Comments: (Note: Comments are limited to 3 minutes in duration.) VI. Consent Agenda: A. Approval of the Minutes Savage Creatures Workshop-June 22, 2006 B. Approval of the Minutes MLK Corridor RFP Meeting - June 22, 2006 C. Approval of the Minutes CRA Board Meeting - August 8, 2006 D. Approval of the Minutes CRA Budget Workshop - August 24, 2006 E. Approval of the Monthly Financial Results-September 30, 2006 F. Approval of FY06/07 Budget Amendment G. Approval of Events - 4th Quarter Schedule VII. Public Hearing: Old Business None New Business A, Boynton Bagels Annexation 1. PROJECT: Boynton Bagels (ANEX 06-007) AGENT: OWNER: LOCATION: DESCRIPTION: Bradley Miller, Miller Land Planning Consultants Peters 3377 N. Federal Highway LLC 3377 North Federal Highway (eastside of Federal Highway, south of Turner Road) Request to annex subject property. B. Boynton Bagels Land Use Plan Amendment/Rezoning 2. PROJECT: Boynton Bagels (LUAR 06-020) AGENT: Bradley Miller, Miller Land Planning Consultants OWNER: Peters 3377 N, Federal Highway LLC LOCATION: 3377 North Federal Highway (eastside of Federal highway, south of Turner Road) DESCRIPTION: Request to amend the Comprehensive Plan Future Land Use Map from Commercial High with underlying Medium Density Residential of 5 du/ac (CH/5) (Palm Beach County) to Local Retail Commercial (LRC); and, Request to rezone from General Commercial (CG) (Palm Beach County) to Community Commercial (C-3). c. Baywalk New Site Plan 1, PROJECT: AGENT: OWNER: LOCATION: DESCRIPTION: Baywalk (NWSP 06-017) Carlos Ballbe, P.A. Southern Homes of Palm Beach V, LLC Westside of Federal Highway, North of Miller Road Request for new site plan approval for 40 townhouse units on a 2.26-acre parcel in an IPUD zoning district. D. Peninsula Site Plan Time Extension 1. PROJECT: Peninsula (SPTE 06-007) AGENT: Tom Yianilos OWNER: Waterbrook Development, LLC LOCATION: 2649 North Federal Highway DESCRIPTION: Request for a 6 month Site Plan Time Extension for site plan approval granted on July 5, 2005, to extend site plan approval from July 5, 2006 to January 5,2007. VIII. Pulled Consent Agenda Items IX. Old Business: A. Discussion of Ocean Breeze - VLB I KS B. HOB Residential Improvement Grant Program Guidelines - VLB C. Revisions to Homebuyers Assistance Program -LBNLB D. Discussion of Promenade DIFA - LB/KS/RR E. Discussion of 500 Ocean (FKA: Arches) - August 16th, 2006 Site Plan Extension and DIFA - LB/KS/RR F. Consideration of donating land to the Boynton Beach CDC- VLB G. Adoption of the CRA FY 06-07 Budget - (Separate Board handout.) H. Review of Executive Director Performance Appraisal- (Presentation by Dr. Linsey Willis.) X. New Business: A. Purchase Agreement for Vacant Lot adjacent to Ocean Breeze B. Purchase Agreement for a parcel located in Cherry Hill C. Consideration of Resolution No. 05-15 Per Diem Travel Reimbursement XI. Comments by Staff XII. Comments by Executive Director XIII. Comments by CRA Board Attorney XIV. Comments by CRA Board XV. Adjournment J!1~qY~T8~ eRA iIi East Side-West Side-Seaside RenaISsance BOYNTON BEACH CRA AGENDA ITEM STAFF REPORT eRA BOARD MEETING OF: September 12,2006 AGENDA ITEM: IX. A. I Consent Agenda I Old Business New Business Public Hearing Other SUBJECT: Discussion of Ocean Breeze Incentives SUMMARY: The CRA board has entered into a Direct Incentive Agreement with Boynton Associates, the developer of the Ocean Breeze project located in the Heart of Boynton for a total of$1,255,887 over a ten year period. Since that time, Boynton Associates has obtained soft construction estimates that exceeded the amount originally budgeted. The developer is seeking additional assistance from the CRA in order to move forward with development of the project. This opens up an opportunity to gain a more substantial and better designed redevelopment project in the Heart of Boynton. Two events have occurred that have the potential to make Ocean Breeze a landmark project for the Heart of Boynton. First, the City Commission approved in concept the ability to rezone to the )PUD designation Citywide. This would permit an increase in density on the site from 10.8 dulac to 20 du/ac. )PUD zoning criteria is more flexible regarding setbacks allowing the buildings to front Seacrest. Secondly, the CRA has been able to come to an agreement with the seller of the property immediately in front of Phase I along Seacrest. Staff feels that a redesigned Ocean Breeze project has the potential to become a catalyst for the area and therefore merits further assistance from the CRA. Staff along with the TIF consultant, Greg Oravec, and the CRA attorney is recommending the following assistance package and terms: a. City and CRA agree to promptly consider any request for rezoning on Phase ) & II which City and CRA understand will be sought to SHDRlIPUD 20 dulac, as currently requested. b. CRA agrees to buy 20 units in Phase ) and can assign their contracts subject to the deed restrictions required of the existing DIF A. Once these units are sold to the CRA, the requirements of the DIF A will have been met: . 20 units at $265,000. c. CRA buys and contributes the Peter property and two additional properties to enable a further enhanced site plan and to maintain the approximate unit count while adding amenities. This incentive is contingent upon the CRA being able to acquire the desired parcels through good- faith voluntary acquisition. T:\AGENDAS, CONSENT AGENDAS, MONTHLY REPORTS\Completed Agenda Item Request Forms by Meeting\FY 2005 - 2006 Board Meetings\06 09 12 CRA Board meeting\Ocean Breeze assistance.doc ~1~qY~T8~ eRA iii East Side- West S",de-Seaside RenaISsance BOYNTON BEACH CRA AGENDA ITEM STAFF REPORT d. CRA will budget or obtain City credit in the amount of $1.5 million for project and/or infrastructure fees associated with the development of Phase I. e. Project to be put on CRA/City Fast Track for sought after approvals. f. Parties agree to a mutually acceptable site plan and unit typology. The site plan and rendering would become exhibits to the Proposed Redevelopment Agreement. g. Parties agree to a mutually acceptable Project Schedule. h. The Redevelopment Agreement must include give the CRA Board the specific right, but not the obligation, to approve of any successor or assign of the Developer. 1. CRA security for release of demolition lien and waiver of costs in the event of developer breach or non-performance to be determined and included in development agreement. Ocean Breeze Recommended Direct Financial Incentives for Developer Incentive T e Demolition of Structures CRA Purchase of 20 units 20 units 265,000 CRA Purchase of Peter Pro e CRA Purchase of Additional Pro erties CRA Payment of Development Fees, Impact Fees, Other Fees and Infrastructure 1m rovements $ 1,500,000 Total $ 3,381,000 1 Approximation of amount to actually be expended by the CRA, consisting of $25,000 per unit for HAP grant in $40,000 in interest/miscellaneous expenses. 2 Estimate. Sim Ie Cash Value Notes $ 371,000 $ 540,000 $ 470,000 $ 500,000 2 FISCAL IMPACT: Funds are available from Bond II proceeds. T:\AGENDAS, CONSENT AGENDAS, MONTHLY REPORTS\Completed Agenda Item Request Forms by Meeting\FY 2005 - 2006 Board Meetings\06 09 12 CRA Board meeting\Ocean Breeze assistance.doc 1~~qY~T8~ eRA iIIi East Side-West Side-Seaside RenaISsance BOYNTON BEACH CRA AGENDA ITEM STAFF REPORT RECOMMENDATIONS: Authorize staff and legal to draft a development agreement for the review and consideration of the Board at its next scheduled meeting in October. Vivian L. Brooks eRA Planning Director T:\AGENDAS, CONSENT AGENDAS, MONTHLY REPORTS\Completed Agenda Item Request Forms by Meeting\FY 2005 - 2006 Board Meetings\0609 12 CRA Board meeting\Ocean Breeze assistance.doc MINUTES OF THE COMMUNITY REDEVELOPMENT AGENCY MEETING HELD IN CITY COMMISSION CHAMBERS, BOYNTON BEACH, FLORIDA ON TUESDAY, SEPTEMBER 12, 2006 AT 6:30 P.M. Present: Henderson Tillman, Chair (arrv'd. 7:25 p.m.) Stormet Norem, Vice Chair Rev. Lance Chaney Jeanne Heavilin Marie Horenburger Steve Myott Guarn Sims Lisa Bright, CRA Executive Director Ken Spillias, Board Attorney I. Call to Order In the absence of Chair Tillman, Vice Chair Norem presided and called the meeting to order at 6:34 p.m. II. Pledge to the Flag The members recited the Pledge of Allegiance to the Flag, followed by an Invocation led by Reverend Chaney. III. Roll Call The Recording Secretary called the roll and declared a quorum was present. IV. Agenda Approval Lisa Bright, CRA Director, announced requests had been received from legal counsel for The Promenade and 500 Ocean projects (Agenda Items IX-D & E respectively) to table the items until the October meeting. The board expressed frustration about the delay but after discussion, decided to listen to the status reports from staff. Ms. Bright also mentioned a request from the agent for the Peninsula project, Agenda Item VII- D, to postpone their site plan time extension item to October. Several notices mailed to property owners within 400 feet were returned due to insufficient postage for Canadian addresses, Motion Ms. Horenburger moved to approve the agenda as amended. Mr. Myott seconded the motion that passed 6-0. v. Public Comments Acting Chair Norem opened the floor for public comment on any item not on the agenda, and closed it when no one came forward. Meeting Minutes Community Redevelopment Agency Boynton Beach, florida September 12, 2006 VI. Consent Agenda A. Approval of the Minutes Savage Creatures Workshop - June 22, 2006 B. Approval of the Minutes MLK Corridor RFP Meeting - June 22, 2006 C. Approval of the Minutes CRA Board Meeting - August 8, 2006 D. Approval of the Minutes CRA Budget Meeting - August 24, 2006 E. Approval of the Monthly Financial Results - September 30, 2006 F. Approval of FY 06/07 Budget Amendment G. Approval of Events - 4th Quarter Schedule Ms. Heavilin pulled item VI-C. Mr. Myott pulled item VI-G. Motion Ms. Horenburger moved to approve the Consent Agenda as amended. Mr. Myott seconded the motion that passed 6-0. VII. Public Hearing Attorney Spillias explained the quasi-judicial hearing procedure and swore in all who planned to appear as witnesses during this meeting. Attorney Spillias then asked the Board members to disclose any ex-parte communications they might have had with anyone other than staff regarding any of the matters on the Public Hearing agenda. Ms. Horenburger had spoken with Herb Kahlert, a resident, and his son, Hans Kahlert, on the Boynton Bagels project, VII-A & B. Mr. Norem had spoken with Hans Kahlert on the same items. Old Business: None New Business: A. Annexation Description: Boynton Bagels (ANEX 06-007) Bradley Miller, Miller Land Planning Consultants Peters 3377 N. Federal Highway LLC 3377 North Federal Highway (east side of Federal Highway, south of Turner Road) Request to annex subject property 1. Project: Agent: Owner: Location: B. Land Use Plan Amendment/Rezoning Owner: Boynton Bagels (LUAR 06-020) Bradley Miller, Miller Land Planning Consultants Peters 3377 N. Federal Highway LLC 2. Project: Agent: 2 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida September 12, 2006 Description: 3377 North Federal Highway (east side of Federal Highway, south of Turner Road) Request to amend the Comprehensive Plan Future Land Use Map from Commercial High with underlying Medium Density Residential of S dulac (CHIS) (Palm Beach County) to Local Retail Commercial (LRC); Location: and Request to rezone from General Commercial (CG) (Palm Beach County) to Community Commercial (C-3). Kathleen Zeitler, Planner, presented for staff, stating her intent to present the Annexation and Land Use Plan Amendment and Rezoning concurrently. The property is small with only 3,342 square feet. The site is a parking lot for a parcel formerly occupied by All Flags bike sales and repairs. The proposed use for this project is a Boynton Bagels takeout restaurant. The subject property would remain as a parking lot. A site plan application had been filed and was currently under review by staff. Ms. Zeitler displayed a depiction of the subject property, a parking lot. The remaining property for the proposed restaurant was already in the City. Staff reviewed the annexation and land use amendment and rezoning and found them to be consistent with the objectives of the City and with the current designations in the unincorporated area of the County. Staff found the project would not create additional impacts on infrastructure that could not be accommodated by the City, and the requested change would help further provide economic contribution as well as make a non-conforming situation less non-conforming. Staff recommended approval of the annexation, land use and rezoning of the parcel. Bradley Miller, Miller Land Planning Consultants, agent for the applicant, Doug Peters, declared the parcel where the building now existed was already in the City and the parking lot was not, so in order for the redevelopment to occur, the parcel had to be brought into the City. The land use being proposed was the LRC land use that was consistent with what the County land use of CH. The proposed zoning, C3, was consistent with the CG zoning presently in place under the County designation. Mr. Myott asked if the site plan that was in process included another parcel, and Mr. Miller responded it did. The parcel seemed very small to Mr. Myott and he asked if, when added to the other parcel, the site would meet the criteria for a lot area in a commercial C-3 zoned site. Mr. Miller noted a different agent was processing the site plan, but he thought there might be 3 Meeting Minutes COmmunity Redevelopment Agency Boynton Beach, Florida September 12, 2006 some legal nonconformities involved with the building situation. Ms. Zeitler responded the required minimum square footage would be 15,000 square feet and she did not think the proposed site plan would meet it. If a variance were to be required, it would come before the board along with the site plan. Mr. Myott inquired whether there was other land to the south that could be attached to it to make it conforming, either in the City or the County. Ms. Zeitler explained the existing building was on Lot 9 and a portion of Lot 10 and was in the City already. Lot 8 (the parking lot) was the property to be annexed. It appeared to Ms. Horenburger that the property had been annexed into the City without the parking lot, and Ms. Zeitler agreed. Ms. Horenburger believed the annexation, site plan, land use amendment and rezoning should have come to the board at one time, they way they usually did. Ms. Zeitler responded this was because the site plan was under the control of a different agent and Mr. Miller's request was completed first. Ms. Zeitler displayed a copy of a site plan that was under review. It included the building and a proposed canopy extending from the front of the building where there would be outdoor seating on a limited basis. The seating was limited due to the small amount of parking. Ms. Horenburger inquired how far the canopy would be from the adjacent residential uses. Ms. Zeitler responded the site plan did not show the dimensions, but she estimated the canopy was approximately twenty feet from the residential. Mr. Norem agreed with Ms. Horenburger's desire to hear the projects in their entirety, but he felt there was no reason to deny annexation into the City in the absence of a site plan, since the site plan still had to be presented for approval. If they were annexed and failed on the site plan or a variance, it was still in the City as a source of tax revenues. Ms. Heavilin did not see any reason to hold off on the annexation of the subject property. Mr. Myott felt the annexation made the likelihood of a site plan working more likely since the lots would be joined to each other. It also cleaned up the County pockets, a Comprehensive Plan goal. Mr. Norem remarked this was what the City had wanted to happen in this area for years. Ms. Horenburger asked Mr. Spillias if the board would be granting anything by annexing the property in relation to the business that wanted to establish itself on this property. Mr. Spillias responded the board was being asked to do two things: 1) annexation, and 2) a land use and zoning change that would make it consistent with the City's zoning regulations. Beyond that, the present use could continue if they chose to continue. If they chose to come through with a new site plan, consideration would be given at that time. The board's annexation decision should be based only on annexation principles. The land use and zoning decision should be made only on zoning. The site plan was no consideration at all for the board's decision. Ms. Zeitler remarked the only thing that was triggering a new site plan in this case was a change of use. If it remained retail and a new business went in as a retail use, it would not have a change of use and would not require a site plan to be approved. Rev. Chaney confirmed with Attorney Spillias the action of the board would be to recommend annexation to the City Commission. 4 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida September 12, 2006 Vice Chair Norem opened the floor for public comment, reminding the speakers of the three- minute limitation on speaking. Tamara Lane, 3216 Palm Drive, Boynton Beach, resident of the Tradewinds subdivision adjoining the subject property, spoke against the annexation. Her property was behind what was being called the "parking lot." She clarified that it had never been a parking lot until Hurricane Wilma. The property owner took that opportunity to take down a huge banyan tree on that property, wiping out a whole eco system and paving the area quickly. Since it was in the County, there had been no permits. She showed the board some pictures to illustrate her point and those pictures were made a part of the record. The parking lot pavement abuts her property and her neighbor's property. Their fence line was about three feet away from the paved area. There was no drainage. The parking lot was done in a shoddy manner. The annexation was up to the City, but they needed to have engineers take a close look at it. There was no easement. Right out front was where the children waited for the bus. It was a busy corner. After 9-11, no one came in that lot because the owner had it chained up and the fence was there. It had always been chain linked and closed. It had never been a parking lot. The City had been given false information and would be approving something on false information. She questioned the integrity of the developer because of this. In the aerial photographs Ms. lane provided to the board, it could be seen that prior to Hurricane Wilma, there was no paved parking lot at this location. Mr. Norem responded Ms. Lane would have to inquire about the permit situation with the County Zoning Department, since it was currently in their jurisdiction. The board was considering the annexation of the land itself and a site plan would still have to come forward for approval. What was there now may not necessarily be allowed to remain. If they wanted that to be a parking lot in conjunction with what they had on the other property, they would have to meet all kinds of landscaping, setback, and other requirements. Patrida Kahlert, another Tradewlnds resident, spoke in opposition to the annexation and proposed bagel restaurant. She provided the board with a box of donuts and a bag of bagels from the Dunkin Donuts shop across the street from the subject property. She felt having a bagel shop across the street from Dunkin Donuts would be redundant. Dunkin Donuts was open from 5:30 a.m. to 9:00 p.m. and they did not have enough business to stay open past 9:00 p.m. She felt a bagel restaurant would not thrive at the proposed location and would be quickly replaced with another business. She was also concerned about the devaluation of the residential properties abutting the subject property if this site had a takeout restaurant on it. Ms. Kahlert owned three 50-foot lots adjacent to the subject property. She referred to an appraiser from Callaway and Price who was appraising her property. He advised it would make a big difference if the adjacent property were "retail or takeout." Ms. Kahlert was a neighbor of Ms. Lane to the south and she echoed everything she had said. She referred to a small business on Federal Highway called Ralph and Rosie's that stayed open late. She knew the City had good intentions, but wondered how the City could have ever allowed a business like the bar/nightclub across the street from subject property to be placed in a mall, which she had watched die since that had taken place. Mr. Miller confirmed for Mr. Myott that the ownership was the same for both sites. Mr. Miller noted that by annexing the property, the City would have more control over what happened on 5 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida September 12, 2006 it and it would be subject to the City's Code of Ordinance requirements. The City had no control over it at present. Mr. Sims agreed it would be better to have this property under the control of the City. He appreciated and understood the remarks of the two residents who spoke. The parking lot situation did make him wonder and he thought that should be investigated. Ms. Heavilin also appreciated the feelings of the residents who spoke. She asked staff what would be allowed under C-3 that would not be allowed presently. Ms. Zeitler responded if it were to remain in the County, it could be residential or it could be high commercial, which would allow more intensive uses to locate there. The general commercial zoning on the property now was consistent with the City's local retail commercial zoning district. Conditional uses were also possibilities. Mr. Miller added that under the County zoning, a cocktail lounge would be a permitted use but it would not under the proposed zoning change. Ms. Zeitler noted it was the applicant's intention to bring the property up to Code as much as possible. There would be a six-foot buffer wall and landscaping on the east property line to buffer the adjacent residential and bring it up to as many of the Code provisions as possible. Mr. Norem asked how many stories would be entailed with the project and Ms. Zeitler responded the C-3 district allowed for heights of 45 feet. Mr. Miller declared the building would remain as a one-story building. Ms. Zeitler noted they were working with the agent who was bringing the site plan forward to make some architectural improvements to the building, including painting and sprucing up in general. Ms. Horenburger inquired whether another zoning category might actually fit the proposed use. Ms. Zeitler responded C-3 most closely fit the zoning the property now had in the County. C-2 was neighborhood commercial but that was not typically found on Federal Highway, and C-3, community commercial, was more common. It could not go in C-l since that was an office district. Ms. Horenburger asked if restaurants and outdoor dining would be allowed in C-3 or if they were conditional uses. Ms. Zeitler was not certain. Ms. Horenburger felt there were some unanswered questions and she wanted to see it come back to the board when the questions were answered. Mr. Miller stated that in the C-2 zoning district, restaurants were permitted uses and the minimum square footage was 5K square feet. Ms. Horenburger inquired whether a restaurant would be a conditional use in C-3. Mr. Miller stated the Code talked about sidewalk cafes within the CRA area as an accessory use. Ms. Zeitler said a restaurant would be a conditional use in a C-3 district. Mr. Myott remarked C-2 was frequently adjacent to residential uses. Ms. Horenburger asked why it would be problematic for the applicant to go to C-2. The proposed use might be more suited to C-2. Ms. Zeitler responded the adjacent parcel was already zoned C-3, so it made sense to have the same zoning; otherwise, they would have to bring in the other parcel and rezone it as well. If it were to function as one site, it had to be zoned the same. Ms. Horenburger did not understand why the board was not being asked to rezone this to C-2, since it did not fit in the C-3 zoning category. It would require a variance. 6 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida September 12, 2006 Mike Rumpf, Planning & Zoning Director, stated although there had been quite a lot of transition along this portion of the corridor to residential, the predominant land use had been retail/commercial, and C-3 specifically. Even though it did not seem to fit that parcel, there were a lot of parcels in the area that were smaller and perhaps non-conforming. As far as use and the predominant zoning district in the area, it was more C-3. It was correct that it was seen more often in neighborhood areas, and not on the major corridors. There was not a perfect fit. Motion Mr. Myott moved to approve the request to annex the subject property. Ms. Heavilin seconded the motion that passed 5-1, Ms. Horenburger dissenting. Motion Mr. Myott moved to approve the request to rezone the subject property from General Commercial (CG) (Palm Beach County) to Community Commercial (C-3) in the City of Boynton Beach. Mr. Sims seconded the motion, Mr. Spillias noted it would also include the Land Use Map. Mr. Myott changed his motion to approve the request to amend the Comprehensive Plan Future Land Use Map from Commercial High with underlying Medium Density Residential of 5 du/ac (CH/5) (Palm Beach County to Local Retail Commercial (LRC) and to approve the request to rezone the subject property from General Commercial (CG) (Palm Beach County) to Community Commercial (C-3) in the City of Boynton Beach. Mr. Sims agreed to the addition to the motion. Pat Kahlert asked to speak again. Mr. Norem advised her the public hearing portion of this item had been closed. When asked again to allow comment, Mr. Norem deferred to the Board Attorney. Mr. Spillias indicated it was up to the board whether they wished to reopen the public hearing. At the beginning of the discussion, he believed it was mentioned the item was being handled jointly. With a request from Ms. Heavilin not to allow comments that had already been covered, and with the board's consensus, Mr. Norem reopened the public comment portion of this item. Craig Ritchie, 3910 Palm Drive, Boynton Beach, resided right behind the proposed project and was concerned about the noise from food prepping in the early morning hours, emptying of the dumpster, and the possibility of rats near the residences from the dumpster. The proposed project would only be about ten feet from the property line of the residences. Hans Kahlert, 3210 Palm Drive, Boynton Beach, was concerned about lighting levels and hours of operation. Although he did not want to undermine his neighbors, the redevelopment of the area was important and there could be far worse uses for the property such as a bar. If it were approved, he hoped the board would require limited hours of operation from 7:00 a.m. through 3:00 p.m. A six-foot wall might not be high enough to buffer the residences from the site lighting. Also, there was not much room for landscaping. The awning extending from the southern portion of the building would be extremely close to their property line. He owned a restaurant at one time and hoped the board would be sensitive to such matters when considering the project. He also hoped they would consider some architectural upgrades to the building. 7 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida September 12, 2006 Ms. Horenburger suggested Mr. Kahlert meet with the agent for the site plan. Mr. Norem closed the floor to further public comment. The motion passed 6-0. C. New Site Plan Description: Baywalk (NWSP 06-017) Carlos Ballbe, P.A. Southern Homes of Palm Beach V, LLC West side of Federal Highway, north of Miller Road Request for new site plan approval for 40 townhouse units on a 2.26- acre parcel in an IPUD zoning district. 1. Project: Agent: Owner: Location: Kathleen Zeitler, Planner, presented the staff report. This project had previously received approval for a land use amendment from LRC to SHDR in 2004. It was also rezoned at that time from C-3 to Infill PUD. Site Plan approval was received in 2004 for the Oceanside project. However, that site plan expired and the applicant was presenting a new site plan for a slightly different project. It had previously been approved for 45 townhomes and it now proposed 40 townhomes for a lesser density of 17.7 du/acre. Currently, the property had a modular sales office and a billboard on it. That would all be removed. The site plan showed one entrance from Federal Highway with some drives off to the side, and a road going through the center with a roundabout at the end. The proposed project would have condominium style ownership. The roads would be private. The landscape areas, roads, parking spaces and driveways would all be common area except for the units themselves, which would be owned individually. Twenty-four of the forty units would have one-car garages and the remaining units would have spaces located throughout the development in front of the units. Also included was a recreation area with a community pool and pool house, with its own parking. Perimeter landscape buffers ten feet in width were proposed along the north, south, and west property lines. There would be a six-foot masonry wall along the north, west, and south property lines. There would be a metal fence with individual gates leading out from the Federal Highway frontage. Chair nllman arrived at 7:25 p,m. The smallest unit, Unit A, would have 1,189 square feet under air. The largest unit was Model 0 with 1,688 square feet under air. All the buildings would be two stories and range in height from 24 feet to 28 feet, four inches. The open space requirement was 200 sq. ft. per unit and that was met and exceeded with the open space area provided. 8 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida September 12, 2006 The project had neo-Mediterranean design with Spanish tile roof and neutral color palette. There would be an arched entry feature. It was similar to the Coastal Bay development. Staff reviewed the project and it met concurrency for traffic and schools. The Fire and Police Departments reviewed it and felt current staffing levels would be sufficient to meet the expected demand for services. It met Code as far as access, circulation, streets, parking, landscaping, buildings, height, and setbacks. The architecture was what staff liked to see. Staff recommended approval with 61 conditions. Most of them pertained to permitting requirements that were Code requirements. Mr. Norem asked Ms. Zeitler if the 61 requirements were mostly "boilerplate," things that would automatically be in there. Ms. Zeitler stated there were some specific conditions such as the removal of the billboard, doing a unity of title, and some related to minor revisions that had to be made for the final construction drawings. Carlos Ballbe', P.A., agent for Southern Homes of Palm Beach IV, LLC, appeared. He offered to answer questions and stated he was excited about the project. They had scaled down the project to more accurately reflect current market conditions. The original project had three stories and no garages. This project had two stories and about half had garages. They reduced the density also. Mr. Norem opened the floor for public comment and closed it when no one came forward to speak. Ms. Heavilin asked if there were renderings of the elevations as seen on encountering the project going north or south on Federal Highway. Ms. Heavilin noted the elevations were very plain, so it could not be determined whether there was any landscaping or not. She liked Southern Homes' other projects and wanted reassurance the buildings would not appear so plain. Mr. Myott responded condition #55 called for additional architectural treatments/requirements. Mr. Myott asked Ms. Brooks if she approved this and she did. Mr. Myott thought they might want to give consideration in the future to limiting the number of units in a continuous line. Such projects appear monolithic and he believed the 12-unit building was pushing it. It was very long, without any breaks in building style or landscaping. Mr. Sims asked the applicant about the bedroom dimensions. He noted in the backup it said there were two and three bedrooms and Ms. Zeitler had stated they were all three-bedroom, two-bath. Ms. Zeitler agreed she could have spoken in error. Mr. Ballbe' confirmed there was a mixture of 2 and 3 bedroom units in the project. Mr. Ballbe' stated in Unit A, the master bedroom was 14 feet wide by 15 feet. The second bedroom in that unit was 14 feet by 12 feet. That was the smallest unit. The same dimensions were true for Unit B. In Unit C, the bedroom was 18 feet wide by 15 feet. The smaller bedrooms were 11 feet by 12 feet. Rev. Chaney asked Mr. Ballbe' for the selling price of the units. Mr. Ba II be' referred to a colleague to answer this question. 9 Meeting Minutes COmmunity Redevelopment Agency Boynton Beach, Florida september 12, 2006 Tom Pagnotta, Director of Operations for Southern Homes of Palm Beach V, LLC, indicated they hoped to bring the A model units to the market in the high $200s, and $350K for the rest, subject to final site plan and architectural approvals. Motion Ms. Heavilin moved to approve the request for new site plan approval for Baywalk's 40 town house units on a 2.26-acre parcel in an IPUD zoning district. Ms. Horenburger seconded the motion. Mr. Myott asked to add, "subject to all conditions of approval" and Ms. Heavilin and Ms. Horenburger agreed to the addition. The motion passed 7-0. D. Site Plan lime Extension 1. Project: Agent: Owner: Location: Peninsula (SPTE 06-07) Tom Yianilos Waterbrook Development, LLC 2649 North Federal Highway Request for a six month Site Plan lime Extension for site plan approval granted on July 5, 2005, to extend site plan approval from July 5, 2006 to January 5, 2007. The board agreed to postpone this item to its October meeting at the agent's request. VIII. Pulled COnsent Agenda Items .:. Consent Agenda Item VI-C. Aooroval of the Minutes CRA Board Meeting - August 8. 2006 Ms. Heavilin wished to make a correction on page 17, fourth paragraph down, where it said Ms. Heavilin would continue to meet with the City Commission for information purposes. It should have read that Ms. Bright would continue to meet with the City Commission for informational purposes. Attorney Spillias noted on page 10 of the same minutes, last paragraph, end of second line, it read "while contracts were ongoing" and it should read "while contract negotiations were ongoing." Ms. Horenburger referred to page 8 in the paragraph beginning, "The CRA was interested in learning whether a market analysis..." and stated she had expressed interest. In another instance on page 9, it said the CRA expressed concern about school funding, and she had been the one to express it. She was interested in the lack of attribution and the generalizing of these statements and asked Attorney Spillias his opinion of what should be done. Mr. Spillias responded that in some cases, the Recording Secretary might not have caught who asked the question and it could also be that after an item was discussed, there appeared to be consensus among the board. Mr. Splllias indicated the minutes should reflect as accurately as possible 10 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida September 12, 2006 precisely what was said and who said it but sometimes, the written minutes could not be as exact as the tape. Mr. Norem asked Ms. Horenburger if she wanted to make any specific changes, but she did not. On a related matter, Ms. Heavilin noted she had received her copy of the June minutes at the September meeting and she hoped that was an isolated instance. Motion Ms. Heavilin moved to approve the August 8, 2006 minutes as amended. Ms. Horenburger seconded the motion that passed 7-0. .:. Consent Agenda Item VI-G. Aooroval of Events - 4th Ouarter Schedule Mr. Myott apologized for not being able to attend the budget workshop, but praised Mr. Reardon on the fine job he had done on the Reference Booklet that supplemented the budget. It was broken down in such a way it was very easy to understand. He inquired whether the Pirates of the Intracoastal event would be held on the same weekend the board was going to Stuart. Margee Adelsperger, Marketing and Communications Manager, responded it was, but Ms. Bright believed they should be finished by noon and could be back in time for the Pirates event. Mr. Myott asked about the $164K allocated for the Holiday Fest event. Ms. Adelsperger responded the bulk of it would go towards securing a top-name entertainer, someone who would draw crowds from outside Boynton Beach. They were considering a country theme. Ms. Bright thought a ballpark figure for the entertainment would be $75K. Motion Mr. Myott moved to approve Consent Agenda Item VI-G, Approval of Events - 4th Quarter Schedule. Ms. Heavilin seconded the motion that passed 7-0. IX. Old Business A. Discussion of Ocean Breeze Ms. Bright reported she had received e-mail from Larry Finkelstein apologizing for not attending this meeting, but due to the rain, it was almost physically impossible for him to attend. Staff had been working with him and she pointed out the board had approved a Direct Incentive Agreement with Boynton Associates in December of 2005. Due to market conditions and changes, staff had been working with Mr. Finkelstein over the past three months to come back to the board to discuss pOSSible alternatives. At the August 8 meeting, the board supported a draft of an HOB Work Program, which they were implementing, and Ocean Breeze was one of the key projects. Ms. Bright asked Attorney Spillias to address the status of the lien with Ocean Breeze and the options for the board to consider In relation to it. Attorney Spillias pointed out the staff summary indicated the CRA attorney was recommending an assistance package and a list of terms, and he made it known that he was not yet at the point of recommending anything. What he was making a recommendation on was the issue of how to deal with the demolition lien and waiver. They had completed their contracts with the 11 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida September 12,2006 City in terms of the assignment of the lien to the CRA. The assignment was recorded and the lien was recorded. One of the incentives the board agreed to provide the developer was a waiver of the costs of the demolition lien. As the minutes reflect and as he recalled, that was part of the incentive package that the board proposed to provide to the developer. In an exchange of e-mails between staff and Mr. Finkelstein, Attorney Spillias saw one of Mr. Finkelstein's requests was an immediate release of the lien and waiver of the funds. Direction from the board was needed as to how to address this in preparing a development agreement and finalizing the incentive package for this development. Attorney Spillias advised if the board were to release the lien immediately, as requested, and the project ultimately did not go forward or did not go forward in the manner in which it had been agreed with the developer, the board would have forgiven a $340K to $360K debt and received nothing in return. On the other hand, the developer was suggesting having the lien in place was hampering his financing arrangements. Mr. Spillias looked to the board for direction about whether it wanted him to try to negotiate with the developer some means of providing security to the board in the event the obligations in a development agreement were not met. He advised the security could be in the form of a bond, a surety, a subordinate mortgage to the construction loan, or some sort of inter- relationship with other incentives. He did not know all the details about how the developer intended to finance the project. Mr. Spillias asked the board if the CRA would want to waive the lien if it did not get the product. Chair llllman responded that in his opinion, the intent of the action to waive the demolition lien was to move the project forward. He did not think this CRA board or any other CRA board would want to give that kind of money up without seeing a project come forward. The difficulties of the developer in obtaining financing with the lien in place could be an issue. However, that was not for the CRA to determine. If that was the case and the developer wanted the demolition lien to be forgiven, he should agree to some sort of guarantee in the form of a bond that he would cover the amount of the lien if the project could not go forward. Chair Tillman did not understand why this project had not progressed and why it seemed to be "stalling out" in spite of the CRA's best efforts to be accommodating. He remarked if the developer did not want to participate, he should step back. Mr. Sims thought it was taking a long time to do anything on this particular site. He wished to remind the board that this was an "open wound" to a lot of people in that area and the longer they just saw dirt, that wound got worse. He felt it would be a tremendous mistake to do anything that would delay the commencement of a project that should have been started a long time ago. He inquired whether it was advantageous for the board to give another developer an opportunity, even if the CRA had to acquire the property. He felt prolonging this situation would be doing a disservice to a great many people. In his opinion, if there were no firm agreement language with this developer that would include a timeline to get the project started by the October meeting, the CRA needed to move on. This was ridiculous. People were talking about it every day. People who had not met the developer felt he was untrustworthy, lacking in credibility, and did not care about the community. They were not seeing any more happening at that site than they had two years previously. If nothing was coming forward, they needed to discuss an alternative plan to get it started. 12 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida September 12, 2006 Ms. Horenburger indicated staff had asked for financial details, as would be expected from anyone asking for this type of incentive, and the principal had refused to produce the information. She went online and it appeared the property had been acquired and not purchased. There was no change of ownership in the Property Appraiser's records and she was told that basically, the liability of the corporation that owned it formerly was purchased and so it did not actually change hands. Also, she understood there was bond indebtedness of $6.5M on the property. Her concern was that as they moved forward, the applicant might come back for more money to cover some of that debt. She did not know what it would mean if the CRA exercised the lien in terms of acquiring the property and whether the CRA would be liable for that debt if the bond indebtedness were true. She would like to know more about that and did not know how to go about getting that information if the principal refused to provide it. Attorney Spillias did not know the details, but if the CRA were going to engage in negotiations for a development agreement and moclify or firm up an incentive package, those financial issues would have to be disclosed and addressed. Ms. Horenburger thought it was incumbent on the board to take a vote to ask that the applicant produce that information or come to the board next month and discuss and decide the CRA's options at that time. It seemed to Mr. Norem staff was asking the board to authorize staff and legal counsel to draft a development agreement on this site and bring it back to the board in October. If it did not come back, the board would know where it had to go. He thought the consensus of this board would be to include that indebtedness, even if they had to subordinate to a construction mortgage. At least, let the CRA see something come out of the ground before doing anything else. That might be one of the ways to do it. If they just did what staff was recommending, it would set the time line. The developer had to come to the table, or the board would move on. Ms. Bright responded CRA staff had spent several months working with Mr. Finkelstein, but the board had asked to hire a TIF consultant to do modeling and forecasting and they had now hired Greg Oravec for that purpose. Staff had asked Mr. Oravec to evaluate all their current incentives. He was present to answer those questions, but he had come to Ms. Bright and after many conversations and e-mails, his recommendation was originally for the CRA to buy the parcel to move on with this project. Staff had worked with Mr. Finkelstein to convince him to come back to the table to try to make the project work. She realized there was consensus that it was time to have a firm development agreement or move on. Greg Oravec, Senior Project Manager at Culpepper and Terpening, Inc., provider of redevelopment consulting services to the eRA, appeared. Mr. Oravec stated the bottom line was that in the next 30 days, they should make this happen. He had been excited about reviewing the underlying controlling regulations, the Heart of Boynton Master Plan, and the property itself because of how it was strategically situated in the Heart of Boynton neighborhood. It had the potential to be much more than just a townhome development and a special town home development in its own right. In conjunction with the improvement of Seacrest Boulevard, it really had the ability to start in earnest the renaissance of the Heart of Boynton area. It could create a main street with a real streetscape that improved the quality of life for the residents and rolled out the red carpet for additional redevelopment. It could create a real opportunity for the people of Boynton Beach to live in Boynton Beach with homeowner occupied housing. He felt this was one of the board's best opportunities to start the renaissanceafor real. The community had heard a lot of talk, but it had not been backed up. They wanted to 13 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida 5eptember12,2006 come back to the board in 30 days with a plan that could be carried out. It was time to make it happen. Mr. Oravec took his excitement and his experience in forging public/private partnerships to the representative of the owner. The owner was Boynton Associates, Ltd. Larry Finkelstein was the representative as had been presented and as he had determined. However, the actual ownership structure was one of the fundamental questions. The earliest record he could find of Boynton Associates, Ltd. on the record was in 1997. In 2004, they had a new co-general partner, The Partnership, Inc. In October of 2005, Larry Finkelstein became the registered agent of the corporation and they had a new general partner called Affordable Housing, LLC. Affordable Housing, LLC was an entity also controlled by Larry Finkelstein. There was no record of the property changing hands or an acquisition, as would normally be determined on the Property Appraiser's Web page or public records of Palm Beach County. Because the interest in the property was purchased and not the property, they had no way of identifying the means by which the property had been acquired. That was problematic, because when Mr. Oravec began evaluating the actual deal with Boynton Associates, Ltd., the request for an additional incentive to the original Direct Incentive Funding Agreement (DIFA) was based on a pro forma in which one of the large assumptions was the purchase price of the property. There was a lot of uncertainty and the request for information from the developer was not met. In addition to the troubling business aspects, there were planning deficiencies. Mr. Oravec declared when the CRA invested the taxpayer's dollars in the district, it had an obligation to them to receive the most it could for that money. There was more to be had with this project. Over the course of the next 30 days, they could: . Come up with a timeline to which the developer could agree. . Have the CRA consider acquisition of the property. The acquisition of the property would be done through an arms-length transaction with the owner, identifying specifically what the board and the community wanted to see on the property (a conceptual site plan). Then, the CRA would go out for RFP to find the best-qualified developer/vertical builder who could get the job done. Chair lillman applauded staff for bringing in a competent individual to take an in-depth look at the Ocean Breeze issue and redevelopment in the Heart of Boynton, so they could take action on this site. He felt the timeline was critically important. He did not want to see anything different than what had already been approved in terms of the site plan. He asked staff to come back to the board in 30 days with whatever was necessary to get this redevelopment effort moving. Ms. Bright noted if directed by the board, staff would work diligently with Mr. Finkelstein to resolve this in the next 30 days. Staff believed a comprehensive plan had to include the developer's plans for the property across the street from the Ocean Breeze site on the west side of Seacrest, so they could have a unified plan. If purchase were an option, she did not think it would be a long-term process. Staff based this opinion on some of the recommendations made in the Treasure Coast Planning Council to include smaller one-bedroom units and villas and the fact that during the RFP process for the MLK Corridor, many developers had the interest and the ability to participate in this project. 14 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida September 12, 2006 Motion Vice Chair Norem moved to authorize staff and legal to draft a development agreement for the review and consideration of the board at the next scheduled meeting in October, incorporating all the comments, requests, and consensus arrived at during this discussion. Ms. Horenburger seconded the motion. Ms. Heavilin noted the board had considered the Ocean Breeze project to be a "seed" project for the Heart of Boynton area. She confirmed with Attorney Spillias that the expiration of the existing site plan approval for this project would not occur until December, although Mr. Finkelstein could request an extension. It seemed to her that legally, he had until that time to perform. Ms. Bright responded Mr. Finkelstein was amenable to revising the site plan. Staff was actually asking the board to approve the CRA purchase of property adjacent to Ocean Breeze, under New Business. Mr. Finkelstein was aware that going into the next level of negotiation, he would have to modify the site plan and that cost. Ms. Heavilin clarified she had been speaking of the 30-day deadline for Mr. Finkelstein to come to the table and come to agreement, as discussed at this meeting. Ms. Heavilin believed Mr. Sims' comments were a little harsh about nothing happening on this project, since they were seeing the same thing on two larger projects. Ms. Heavilin did not believe anyone developer could be held totally accountable for the drastic changes occurring in the market today. She thought the board had to be cognizant of that. Ms. Horenburger disagreed, saying the CRA was giving the developer $3.381M to start doing this project, and he had refused to provide financial information that was required of all applicants for incentives. She did not think Mr. Sims' comments were harsh at all. The motion passed 7-0. B. HOB Residential Improvement Grant Program Guidelines Vivian Brooks, Planning & Development Manager, concurred with Mr. Sims' comments that the community had to put up with quite a bit over the years. When she put together the HOB Work Program, one of her goals was to think of the people who had lived through the decline and waited for improvements to come. The HOB Residential Improvement Grant Program Guidelines represented the implementation of one of the line items in the Work Program. This took the place of the old Residential Fa~ade Grant Program that had not been used at all during FY 2005-06, possibly due to an onerous match of 50%. Also, it only covered things like painting of exteriors and not the things people really needed such as wiring and bringing their houses up to Code on safety issues. Ms. Brooks proposed making a concentrated effort in the HOB to work with existing residents and property owners to bring properties up not just on the outside but inside, allowing them to stay in their homes and not sell them if they did not wish to do so. There were a lot of elderly residents on fixed income who could not re-roof their homes, for example. Many had their homes paid for. They did not always have insurance. A concentrated effort in the community to use these grants could allow people to bring their houses up to Code. 15 I!IRY~8~ eRA . East Side-West S',de-Seas',de Renaissance If any person decides to appeal any decision made by the Board with respect to any matter considered at this meeting, he or she will need a record of the proceedings, and that, for such purpose, he or she may need to ensure that a verbatim record of the proceedings is made, which record includes the testimony and evidence upon which the appeal is to be based. CRA Board Meetin~ Wednesday, October 2St ,2006 City Commission Chambers 6:30 P.M. I. Call to Order - Chairman Henderson Tillman II. Pledge to the Flag III. Roll Call IV. Agenda Approval A. Additions, Deletions, Corrections to the Agenda. B. Adoption of Agenda. C. Presentation by Board Chair, Henderson Tillman of the Florida Redevelopment Association (FRA) Roy F. Kenzie Award- 2006 Capital Projects / Beautification Award- The Boynton Beach - Boulevard Extension Waterfront Promenade. V. Public Comments: (Note: comments are limited to 3 minutes in duration.) VI. Consent Agenda: A. Approval of the Minutes - CRA Board Meeting - September 12, 2006. B. Approval of the Financials - September 30th, 2006. C. Review and Adoption of Mortgage, Note and Agreement for the Homebuyers Assistance Program (HAP). D. Selection of proposal for the maintenance of the Boynton Beach Blvd. Promenade. (Sent to CRA Board Members under separate cover.) E. Selection of proposer for the regulatory monitoring of the mangrove mitigation area at Jaycee Park. (Sent to CRA Board Members under separate cover.) F. Selection of proposer for the maintenance of the mangrove mitigation area at Jaycee Park. (Sent to CRA Board Members under separate cover.) G. Selection of proposer for the creation of a geo-database for the CRA. (Sent to CRA Board Members under separate cover.) H. SE 4th Street Improvement Project Design Change Recommendation. I. Uniform Retirement Percentage for CRA Employees. J. Palm Beach County TCEA & Incentives Compliance. VII. Public Hearing: Old Business - NONE. New Business: A. Public Notice of Intent to Dispose of Real Property located at 607 & 609 Seacrest Blvd. B. The Office at Bamboo Lane I ZNCV 06-011 Agent: Michael Hanlon, HNM Architecture, LLC Owner: Jaime Mayo, Nigel Development, Inc. Location: 3847 No. Federal Highway (SE corner of No. Fed. Hwy. and Bamboo Lane.) Description: request for relief from the city of Boynton Beach Land Development Regulations, Chapter 2, Zoning, Section 6.C.3, requiring a minimum lot area of 15,000 square feet, to allow a minimum lot area of 11,578 square feet (a variance of 3,422 square feet) for a proposed professional business office building within the Community Commercial (C-3) zoning district. The Office at Bamboo Lane - ANNEX 06-008 and LUAR 06-021 Agent: Michael Hanlon, HNM Architecture, LLC Owner: Jaime Mayo, President, Nigel Development, Inc. Location: 3847 No. Federal Highway, Delray Beach, east side of Federal Highway, south of Bamboo Lane, west of Palmer Road (see exhibit "A" - Location Map.) Description: to Annex the 0.265-acre parcel, to reclassify its land use to local Retail Commercial (LRC), and rezone to Community Commercial (C- 3) to construct a professional business office. The Office at Bamboo Lane I NWSP 06-023 Agent: Michael Hanlon of HNM Architecture, LLC Owner: Jaime Mayo, President, Nigel Development, Inc. Location: 3847 No. Federal Highway (SE corner of Federal Hwy. and Bamboo Lane.) (See exhibit "A" map.) Description: New Site Plan C. Country Inns & Sites I NWSP 06-026 Agent: Robert Currie of Currie Sowards Aguila Architects Owner: Anand Patel, LLC (Anand Patel, Managing Partner) Location: 2201 So. Federal Highway (see location map - Exhibit Map "A") Description: New site plan. Country Inns & Suites I HTEX 06-008 Agent: Robert Currie of Currie Sowards Aguila Architects Owner: Anand Patel, LLC (Anand Patel, Managing Partner) Location: 2201 So. Federal Highway (see location map - Exhibit Map "A") Description: Height Exception. D. Neelam Business Center I SPTE 06-010 Agent: Anand Patel, Managing Partner of AA, LLC Owner: AA, LLC Location: S924 No. Federal Highway - SE corner of NE 9th Avenue and North Federal Highway (see Exhibit "A" location map) Description: Site Plan Time Extension (6 month) E. The Peninsula at Boynton Beach (SPTE 06-007) Agent: Tom Yianilos with Waterbrook, Inc. Owner: Waterbrook Development, LLC Location: 2649 No. Federal Highway (see location map - Exhibit Map "A") Description: Site Plan Time Extension (6 month) F. Las Ventanas (fka Gulfstream Lumber) SPTE 06-009 Agent: Kyle Riva with Epoch Properties, Inc. Owner: Epoch Properties, Inc. Description: Site Plan Time Extension. G. Mixed Use Zoning Districts - Code Review - (CDRV 06-002) Agent: City Initiated Description: Request for approval of proposed amendments to Chapter 2, Zoning, Section 6.F. Mixed Use Zoning Districts for conversion of Mixed Use-Low (MU-L) to Mixed Use-Low 1 (MU-L 1), amendment of Mixed Use- High (MU-H), and establishment of the Mixed Use-Low 2 (MU-L2) and Mixed Use-Low 3 (MU-L3) zoning districts. VIII. Pulled Consent Agenda Items IX. Old Business: A. Ocean Breeze Update - Incentive Recommendations. B. Reconsideration for the DIFA on 500 Ocean Plaza. (Please refer to orange handout.) C. Reconsideration for the DIFA on the Promenade. D. Approval Revisions of Purchase Agreement for Peters Parcel at Ocean Breeze. E. MLK Master Developer Agreement Update. X. New Business: A. Renewal of Molly's Trolley's Contract. XI. Comments by Staff XII. Comments by Executive Director XIII. Comments by CRA Board Attorney XIV. Comments by CRA Board XV. Adjournment ..~~qY~T2~ eRA ill East Side-West Side-Seaside Rena',ssance BOYNTON BEACH CRA AGENDA ITEM STAFF REPORT eRA BOARD MEETING OF: October 25,2006 AGENDA ITEM: I Consent Agenda I X Old Business New Business Public Hearing Other SUBJECT: Ocean Breeze Update - Incentive Recommendations. SUMMARY: Staff has been working diligently with Mr. Larry Finklestein, the principal of Boynton Associates, owner of the Ocean Breeze development, to create an incentive package for the proposed development. According to Mr. Finklestein, the incentive package proposed by staff, with an approximate value of $3.4 million would not be enough to make the project feasible. At that point, CRA staff asked if the developer would be interested in selling the property. Mr. Finklestein stated that he would be interested in selling the property. Mr. Finklestein provided a copy of his $8.2 million appraisal of the property to staff. Staff advised Mr. Finklestein that negotiations could not proceed until the CRA had conducted its own appraisal and title search. The CRA staff initiated appraisal came in at $6.4 million, In the course of conducting the title search it was discovered that a Lis Pendens (a pending suit regarding real estate) has been filed against the property. The attorney for the plaintiff provided the CRA with a copy of the First Amended Complaint dated August 9, 2006. He also advised that the action could be complete within six months. A review of the First Amended Complaint discloses that the basis of the Complaint is non-payment of the debt service on the bonds that had been issued by the County as part of its housing assistance program. It is unclear whether this was the original basis for the foreclosure since the bank did not send its notice of acceleration of the balance due until July, 2006, which was followed by the filing ofthe First Amended Complaint. In any event, the bank, as trustee for the bondholders, is foreclosing and is seeking to eliminate all other liens on the property including the City's. The documents sued on also give the bank the right to seek to sell the property itself. Moreover, there is referenced in the documents a Land Use Restriction Agreement with the County which we have not had the opportunity to review. The foreclosure action involves a complex series of transactions involving Boynton Associates, the County, HUD and the bank as trustee for the bondholders. Due to lack of payment on the bonds, the trustee has significant authority and power to act on the property, Also, given that the property is in '~~qY~Te~ eRA . East Side-West Side-Seaside Renaissance BOYNTON BEACH CRA AGENDA ITEM STAFF REPORT foreclosure, the present owner is not in a position to make commitments regarding the property without the concurrence of the bank or until the foreclosure action is settled. FISCAL IMPACT: RECOMMENDATIONS: Based on the present status of the property and the pending foreclosure action, CRA counsel advises that any effort to purchase the property be based on (I) appraisals obtained by the CRA, and (2) negotiations with Boynton Associates and the bank, concurrently, that would establish a purchase price in or around the appraised value of the property. If such negotiations are not successful, then counsel advises that the eRA allow the foreclosure action to run its course and re-evaluate the situation once the ownership of the property and the authority to transfer it has been clearly established. Vivian L. Brooks CRA Planning Director ~ MINUTES OF THE COMMUNITY REDEVELOPMENT AGENCY MEmNG HELD IN CITY COMMISSION CHAMBERS, BOYNTON BEACH, FLORIDA ON WEDNESDAY OCTOBER 25, 2006 AT 6:30 P.M. Present: Henderson Tillman, Chair Stormet Norem, Vice Chair Rev. Lance Chaney (arrived 6:34 p.m,) Jeanne Heavilin Marie Horenburger Steve Myott Guarn Sims Lisa Bright, CRA Executive Director Ken Spilllas, Board Attorney I. Call to Order Chair Tillman called the meeting to order at 6:34 p.m. II. Pledge to the Flag The board recited the Pledge of Allegiance. III. Roll Call The Recording Secretary called the roll and declared a quorum was present. IV. Agenda Approval A. Additions, Deletions, Corrections to the Agenda. Attorney Spil/ias added a request for an Attorney Client session with the board regarding Jesus House of Worship litigation to be heard under, XIII. Comments by CRA Board Attorney. He would explain the item further when the Item was addressed, He also indicated there was a request by the attorney from InTown Development Group for an action item regarding the property and financial assistance with an upfront property purchase. This would be added as Item 9E. There were no other changes to the agenda. B. Adoption of Agenda. Motion Ms. Horenburger moved to approve the agenda with the addition of those items. Ms. Heavilin seconded the motion that unanimously passed. 1 Community Redevelopment Agency Meeting Minutes Boynton Beach, FL October 25, 2006 D. Presentation By Board Chair Henderson Tillman, of the Florida Redevelopment Association (FRA) Roy F. Kenzie Award - 2006 Capital Projects/Beautification Award - The Boynton Beach - Boulevard Extension Waterfront Promenade. This item was heard later in the meeting. v. Public Comments Chair Tillman opened the floor for public comments. Ms. Lynn Simmons, owner of Splashdown Divers was present. She recently received correspondence from the CRA notifying her she must vacate the premises by December 31, 2006. She had been in business for 24 years and she and her husband owned property at 652 South Road. Her dilemma was she must have a written lease, as required by her suppliers, in order for her to remain a dive shop. Without the lease she would be out of business, She understood the building would undergo renovations and requested meeting with the board to work out some arrangement to allow her to remain In business. She thanked the board. Mr. Warren Brown, a resident since 1978 purchased a home in Boynton Heights and restored it. Eighteen months ago, the CRA had fa~de grants for the area he lived in, He obtained an application, but when he went down a few weeks ago to turn it in, he was told the grants no longer existed. The grants were online but the dates indicated 2004/2005. He requested the grants be available for the area he resided in, which was Boynton Beach area, and he wanted the CRA to reconsider offering the program to residents in the area who were upgrading. He felt the residents in Boynton Beach deserved to have the program available, and the opportunity to make the redevelopment area the town it should be. There being no other comments received, Chair Tillman closed the floor to public comments. D. Presentation By Board Chair, Henderson Tillman of the Florida Redevelopment Association (FRA) Roy F. Kenzie Award - 2006 Capital Projects/Beautification Award - The Boynton Beach - Boulevard Extension Waterfront Promenade. Chair Tillman joined Mayor Taylor at the podium and presented him with the 2006 Roy F. Kenzie Beautification Award the CRA had received for the Boynton Beach Boulevard Extension Promenade project. He presented the trophy to Mayor Taylor and indicated he was proud, as Chairman of the CRA, that the project was recognized as an outstanding redevelopment capital project. He reported the award was a direct result of the strong leadership and collaboration between the parties. It was an honor for Boynton Beach to be recognized by the Florida Redevelopment Community. He thanked the Mayor and the CRA board for their efforts. Mayor Taylor accepted the award on behalf of the City Commission and City staff. The Promenade was only the first of many projects. He announced as partners, they could make the effort happen. 2 Community Redevelopment Agency Meeting Minutes Boynton Beach, FL October 25, 2006 VI. Consent Agenda: A. Approval of the Minutes - CRA Board Meeting - September 12, 2006. B. Approval of the Financials - September 30th, 2006. C. Review and Adoption of Mortgage, Note and Agreement for the Homebuyers Assistance Program (HAP). D, Selection of proposal for the maintenance of the Boynton Beach Blvd. Promenade. E. Selection of proposer for the regulatory monitoring of the mangrove mitigation area at Jaycee Park. F. Selection of proposer for the maintenance of the mangrove mitigation area at Jaycee Park. G. Selection of proposer for the creation of a geo-database for the eRA. H. SE 4th Street Improvement Project Design Change Recommendation. I. Uniform Retirement Percentage for CRA Employees. J. Palm Beach County TCEA and Incentives Compliance. Ms. Heavilin pulled Item A. Mr. Sims pulled Items F & H. Motion Ms. Horenburger moved to approve the Consent Agenda, less Items A, F and H. Vice Chair Norem seconded the motion that unanimously passed. VII. Public Hearing Old Business None. New Business: A. Public Notice of Intent to Dispose of Real Property located at 607 & 609 Seacrest Blvd. Ms. Vivian Brooks, CRA Planning Director, announced the properties were known as the Parker properties, and they were recently burned down. The CRA received authorization from the Property Appraiser to reconfigure the two lots to three rots. This item served as notice of the board's intent to dispose of the property by donating it to the Boynton Beach Faith Based CDC, who would construct three new single-family affordable housing units. Staff anticipated 3 Community Redevelopment Agency Meeting Minutes Boynton Beach, FL October 25, 2006 bringing a draft development agreement to the board by November. This notice was a statutory requirement needed to dispose of the property and was also part of the Heart of Boynton (HOB) plan to construct single-family homes on the west side of Sea crest. Motion Vice Chair Norem moved to approve staffs recommendation as written. Ms. Horenburger seconded the motion. There were no public comments received. Mr. Myott explained the board does not typically see Site Plans for single-family homes. He asked, since the lots were non-conforming whether a Site Plan would be provided and thought they would be helpful. Ms. Brooks responded the Site Plans would be a deliverable in the development agreement along with a timeline. Y2m Motion unanimously passed. Attorney Ken Spillias explained the remaining agenda items were quasi-judicial proceedings. He asked the board if there were any ex parte communications. There were no communications reported. Attorney Spill/as administered the oath to all individuals who would be testifying. B, The Office at Bamboo Lane/ZNCV 06-011 Agent: Owner: Location: Description: Michael Hanlon, HNM Architecture, LLC Jaime Mayo, Nigel Development, Inc. 3847 N Federal Highway (SE corner of N Fed. Hwy. and Bamboo Lane) Request for relief from the City of Boynton Beach land Development Regulations, Chapter 2, Zoning, Section 6.C.3, requiring a minimum lot area of 15,000 square feet, to allow a minimum lot area of 11,578 square feet (a Variance of 3,422 square feet) for a proposed professional business office building within the Community Commercial (C-3) Zoning district. Kathleen Zeitler, Planner, presented the request. The lot was situated In the County and was considered a valid non-conforming lot by Palm Beach County regulations. Ms. Zeitler read the background and the requirements contained in Section 121.1.c.8.a of the Land Development Regulations. The applicant was requesting a Variance and staff recommended approval without conditions, Michael Hanlon, the developer, HNM Architecture lLC, was present and agreed with the staff report. The property was never platted, and should have been platted with an additional piece of land, that being the 30' of right-of-way. 4 Community Redevelopment Agency Meeting Minutes Bovnton Beach, FL October 25, 2006 Chair Tillman opened the floor for public comments. There were no comments received and Chair Tillman closed the floor. Motion Vice Chair Norem moved to approve the Variance. Ms. Horenburger seconded the motion that unanimously passed. It was clarified the presentation and motion was just for the Variance. Ms. Heavilin requested hearing the next two Items, the Annexation and Site Plan together. There were no objections from the board. The Office at Bamboo lane - Annex 06-008 and LUAR 06-021 Agent: Owner: Location: Description: Description: Michael Hanlon, HNM Architecture, llC Jaime Mayo, Nigel Development, Inc. 3847 N Federal Highway Delray Beach, east side of Federal Highway, south of Bamboo Lane, west of Palmer Road To Annex the 0.265-acre parcel, to reclaSSify its land use to Local Retail Commercial (lRC), and rezone to Community Commercial (C-3) to construct a professional business office. Request to amend the Comprehensive Plan Future land Use Map from Commercial High with underlying Medium Density Residential (PBC CHIS) to local Retail Commercial (lRC); and Request to rezone from Commercial, General (PBC CG) to Community Commercial (C-3) This item was addressed with the New Site Plan below. The Office at Bamboo lane/NWSP 06-023 Agent: Owner: Location: Description: Michael Hanlon, HNM Architecture, LLC Jaime Mayo, Nigel Development, Inc. 3847 N Federal Highway (SE comer of N Fed. Hwy. and Bamboo Lane) New Site Plan Kathleen Zeitler, presented the request for the Annexation and Land Use Classification Change and the staff report. The request was consistent with the objectives of the City's Annexation plans as well as Palm Beach County's plan. There were no Impacts on the existing infrastructure or level of services. The change would require a Future Land Use Map Amendment showing a change in density, Staff supported the request. The Site Plan proposed a profeSSional office building with the first story having S55 s.f. of space consisting of an elevator, lobby and stairwell, The second and third story had 3,471 gross s.f. of space. There would be 3,234 s.f. of air-conditioned space. The applicant was required to 5 Community Redevelopment Agency Meeting Minutes Boynton Beach, FL October 25, 2006 provide 25 parking spaces and had complied with that provIsion. They obtained traffic concurrency and both the Police and Fire Departments approved the request. Staff recommended approval of the request subject to the 29 conditions associated with it. Mr. Hanlon, the applicant, agreed with all of the conditions. Chair Tillman opened the floor for public comments. There were no comments received and Chair Tillman closed the floor. Motion Vice Chair Norem moved to approve the Annexation and New Site Plan. Ms. Horenburger seconded the motion. Attorney Spillias advised the requests should be approved separately. Motion Vice Chair Norem amended his motion to be for the Annexation and Comprehensive Plan Future land Use Map Reclassification and Rezoning. Ms. Horenburger seconded the motion. The placement of the various colors was discussed for clarification. ~ Motion passed unanimously. Motion Ms. Horenburger moved to approve the New Site Plan subject to all recommendations from staff. Rev. Chaney seconded the motion. Mr. Myott asked whether the pervious areas would be landscaped or if pavers would be used. Mr. Hanlon answered it was landscaped. He also asked about handicapped accessibility to the elevator lobby. Mr. Hanlon explained the clearances were all 44' minimum. Ms. Heavilin asked If there were any comments from the surrounding residents. Mr. Hanlon explained they had an office two lots down from the proposed site. The residents were aware of the plans and had no objections. ~ Motion unanimously passed. C. Country Inns and SuitesfNWSP 06~026 Agent: Owner: location: Description: Robert Currie of Currie Sowards Aquila Architects Anand Patel, LlC (Anand Patel, Managing Partner) 2201 S. Federal Hwy New Site Plan 6 Community Redevelopment Agency Meeting Minutes Boynton Beach, FL October 25, 2006 Ed Breese, Principal Planner, presented the request, which was located at the former Denny's location. The Denny's would be removed to construct the hotel. There would be a three-story structure constructed. Staff had requested dormers be added to the roofline to create visual interest and recommended approval of the Site Plan and the Height Exception. Staff did not believe there would be any injurious actions as a result of that roofline addition. It provided the look the City was developing. The structure was designed in the Old Florida style. Mr. Bob Currie, Currie Sowards Aquila Architects, and Anad Patel, the owner, were present. Mr. Currie gave a PowerPoint presentation of the project that encompassed aerials of the location, and the Site Plan with parking in the back and underneath. The elevation and public art, which was a fountain proposed for the corner of Federal Highway was also shown. This hotel would have a pool on the second floor, and would be comprised of suites and doubles, having a total of 62 rooms. The structure replaced an existing abandoned property and would create employment opportunities. Chair Tillman opened the floor for public comments. There were no comments received and Chair Tillman closed the floor. Mr. Phillip GOrdon, owned property next door to the proposed site. He and others present represented the board of Fairfield. They were concerned about the property behind the proposed site being owned by the same person and they reported the property had not been managed. They did not want the same type of problems to exist on the site. In the past there were over 284 calls to the Boynton Beach Police Department for activities occurring on the property behind the proposed site. Additionally, the residents reported when they painted their homes, they painted all four sides out of consideration for their neighbors. Mr. Gordon reported the applicant only painted the front and he could attest to the issues with the Police Department. Ms. Nancy Lynn, of Fairfield, was concerned about the hotel and if It did not succeed. She noted Ramada Inn, located on Federal Highway closed down, and the property was turned into an assisted living facility. She wanted to know what would happen if the hotel did not stay in business. Cathy Volpe, an alternate on the Fairfield Board, reported there were incidents on the property. She advised the owner tried to put a laundry room on the premises without permits. Fairfield residents were trying to increase the value of their properties. If the applicant could not fill his rooms, she wanted to know If he would lower the price of the rooms and let the clientele that presently frequented the property have access to the hotel. She explained the Police have been there numerous times and a back window was shot out. She wanted a guarantee that the owner would clean up the premises. She explaIned the residents were afraid. Mr. Currie explained the Inn was a franchise and there were requirements and standards involved in its operation. It was a monitored facility and It would be a better alternative than the Denny's. 7 Community Redevelopment Agency Meeting Minutes Boynton Beach, FL October 25, 2006 Mr. Anand Patel, 648 Riviera Drive, was present and explained the property in the back was owned by his cousin, and he would speak to him about it. Ms. Volpe contended Mr. Patel was associated with the hotel in the back. There was a Golden Sands Hotel sign in the Denny's window. Mr. Patel responded he has no control over how the hotel in the back was managed and commented he would take the sign down. Ms. Horenburger asked how Mr. Patel would attract a good clientele with the other clientele existing in the back. She expressed concern about Fairfield and had previously brought the matter to Code Enforcement because there was an issue with discarded furniture in front of Fairfield. She thought the whole area needed to be cleaned up. The Inn was a good step towards doing so, Mr. Myott asked about the ground floor, which was for parking with the exception of the lobby and about the reception desk. He disagreed with that aspect of the plan and thought it was not a high quality type of Inn. He did not think the way the plans were laid out were appropriate for a redevelopment area. Ms. Brooks explained the project was a franchise that came with a certain design box. When staff first reviewed the original plans, they were lacking. Staff worked with the architect and the applicant, going through three reviews to make it acceptable, and making It more urban and street friendly. The applicant complied with everything they asked for. As staff, she reported, they cannot make a determination of whether they like a certain brand of hotel, only whether it meets the Code and CRA plan guidelines. The applicant had gone above and beyond those standards. Ms. Horenburger asked whether there was a real lobby and if it had adequate parking. Mr. Currie showed her pictures of the lobby, and there was adequate parking. Mr. Myott was surprised that the Police Department had no comments. There would be security cameras and clear glass on both sides of the lobby. Originally, there were comments from the Police Department, but each time the plan was reviewed, the comments were addressed. Motion Rev. Chaney moved to approve the Site Plan with all conditions. Ms. Heavilin seconded the motion. The Secretary called the roll. Motion passed 5 - 2, with Messrs. Myott and Sims dissenting. Country Inns and Suites/HTEX 06-008 Agent: Owner: Location: Description: Robert Currie of Currie Sowards Aquila Architects Anand Patel, LLC (Anand Patel, Managing Partner) 2201 S. Federal Hwy Height Exception 8 Community Redevelopment Agency Meeting Minutes Boynton Beach, FL October 25, 2006 Motion Ms. Heavilin moved to approve the height exception. Ms. Horenburger seconded the motion which passed 5 - 2, with Messrs, Myott and Sims dissenting. O. Neelam Business CenterlSPTE 06-010 Agent: Owner: Location: Description: Anand Patel, Managing Partner of M, LLC M, LLC 924 N Federal Hwy - SE comer of NE 9th Avenue and N Federal Hwy Site Plan Extension Mr. Breese presented the request and explained Mr. Anad Patel had purchased the subject property. Mr. Breese read the staff analysis and announced staff was recommending approval of the six-month Site Plan extension subject to all conditions of approval. Sanjay Parag, the agent, parag Construction was present, and indicated the FOOT permits were obtained. The only outstanding item was the utility review. Chair Tillman opened the floor for public comments. There were no comments received and Chair Tillman closed the floor. Ms. Heavilin asked when construction would commence. Mr. parag responded it would be about three weeks and definitely by year-end. Mr, Myott asked whether the building still looked the same and Mr. parag responded it did. Ms. Horenburger asked whether the same individual who owned this project also owned the Country Inn and Suites. Mr. Parag responded it was. Rev. Chaney asked about the occupancy plans. The first floor would be retail, with professional office space above. It had not been determined exactly what retail there would be. It was originally designed for an attorney, Motion Vice Chair Norem moved to approve the six-month time extension. Ms. Horenburger seconded the motion for the discussion. Ms. Horenburger asked if there was another request that had been approved for one year, and then this was asking for a six-month extension. Mr. Breese confirmed it was. Ms. Horenburger indicated they had discussed at a prior meeting, changing approvals from one year to eighteen months. Mr. Breese explained when the Land Development Regulations are rewritten, that change would be included. ~ A vote was taken and the motion unanimously passed. 9 Community Redevelopment Agency Meeting Minutes Boynton Beach, FL October 25, 2006 E. The Peninsula at Boynton Beach (SPTE 06-007) Agent: Owner: Location: Description: Tom Yianilos with Waterbrook, Inc. Waterbrook Development, LLC 2649 N Federal Hwy Site Plan Extension - Six Months Ms, Zeitler presented the plan and explained the applicant requested a six-month time extension. The plan was approved as an infill PUD development for 30 town homes and 40 condominium units. The original plan called only for town homes, but during the process it was changed to include condominiums as well. The Site Plan was designed by an architectural firm that specialized in homes and town homes. They needed to retain a second architectural firm for the permit drawings for the condominiums. The extension would move the deadline to January 5, 2007. There was one condition of approval, that the Site Plan time extension was still subject to the previous conditions. Ms. Kim Glas-Castro, Attorney with Ruden McCloskey, was present on behalf of Waterbrook. She added the applicant had applied for their permits and second review, and had addressed the technical comments. They obtained their State and Federal permit approvals for the seawall, and had been negotiating the wording for the letter of credit. Once the letter was completed, it would be submitted to the City and the permit could be obtained. The seawall had to be completed first before they could pull the permits to start vertical construction. The seawall would need up to four weeks to be completed. Chair Tillman opened the floor for public comments. There were no comments received anc Chair Tillman closed the floor. Motion A motion was made by Ms. Horenburger to approve the request subject to all staff conditions. Vice Chair Norem seconded the motion. Rev. Chaney asked about the time extension and asked whether that was enough time. Mr. Tom Yianilos, with Waterbrook was present and explained all permits were processed and ready to be issued. They were mobilized for construction and just waiting for the letter of credit. My Myott thought including the letter of credit with the list was very helpful and encouraged applicants to include it with the backup materials for the project. ~ A vote was taken and the motion unanimously passed. F. Las Ventanas (fka Gulfstream Lumber) SPTE 06-009 Agent: Owner: Kyle Riva with Epoch Properties, Inc. Epoch Properties, Inc. 10 Community Redevelopment Agency Meeting Minutes Boynton Beach, FL October 25, 2006 Location: NW Corner of Federal Highway and Woolbright Rd. Description: Site Plan Time Extension Mr. Breese presented the request asking for a one-year time extension. The project was formerly approved as Uptown lofts of Boynton Beach. He reviewed the background and analysis information of the staff report and announced the project had 43,361 sJ. of retail, had 404 apartments units, 20 town homes and 70 lofts. The applicant purchased the property, received interim and equity financing for the project, demolished the existing structures, and received FDEP approval. The only outstanding issue was the coordination of the relocation of the traffic signal with the Sunshine Shopping Center. Staff was recommending approval of the time extension. Ms. Bright reported she received correspondence from Bonnie Miskel of Ruden McCloskey, indicating they would be coming before the board next month. Chair Tillman opened the floor for public comments. Ms. Nancy Hogan, 37 Hibiscus Way in Ocean Ridge, was present. Ms. Hogan was a Commissioner in Ocean Ridge, but was speaking as a private citizen. She thanked Epoch properties for clearing the property that had dilapidated structures on it prior to the demolition. She reported building runs more efficiently when the process was streamlined. She requested the board consider when coming over the bridge to Ocean Ridge and Briny Breezes, the shrubbery be cleaned up. She thought it looked a little shabby and thought between the developer and the City, it could be cleaned and could look a little nicer while the process was ongoing. Mr. James Vitter, Kimley Horn, was present and indicated he read the staff comments and agreed with them. He had a Powerpoint Presentation that they had made when the original request was made to the CRA. The board waived seeing the presentation. Mr. Vitter reported they hoped to commence vertical construction by March of 2007, but were still working out some of the transportation issues. The building plans would be submitted in about three to four weeks. Motion Ms. Heavilin moved to approve the request with the conditions. Vice Chair Norem seconded the motion that unanimously passed. G. Mixed Use Zoning Districts - Code Review - (CDRB 06-002) Agent: Description: City Initiated Request for approval of proposed amendments to Chapter 2, Zoning, Section 6.F Mixed Use Zoning Districts for conversion of Mixed Use-Low (MU-L) to Mixed Use-Low 1 (MU-Ll), amendment of Mixed Use-High (MU- H), and establishment of the Mixed Use-Low 2(MU-L2) and Mixed Use- low 3 (MU-L3) zoning districts. 11 Community Redevelopment Agency Meeting Minutes Boynton Beach, FL October 25, 2006 Mike Rumpf, Planning and Zoning Director, announced this request was discussed at CRA, Planning and Development, and City Commission meetings. The request represented a transition of the current mixed-use district system, which was a two-district system, to a four- district system and continued the Implementation of the various redevelopment plans. It also instituted the allocation of the mixed use district onto the streets into the different areas and it implemented new positions on large grocery stores, gas stations and automotive service businesses. He reviewed the staff report and advised the grocery store text changes were in connection with the Sunshine Square project, which was in the review process. It had come back from DCA and the City was preparing to adopt it. (Vice Chair Norem left the dais at 7:46 p.m.) Mr, Rumpf distributed an update to the handouts and pointed out the changes. (Wce Chair Norem returned to the dais at 7:50 p.m.) The Mixed Use High District abutting single-family residences would have an nfa mark because that scenario was unlikely. Ms. Horenburger asked whether the City Commission reviewed the changes and whether the amendments came about from issues the City and CRA encountered. Mr. Rumpf responded it had not been before the City Commission but the amendment was made from issues raised at the CRA and City Commission meetings. Mr. Rumpf pointed out automotive fuels sales and service had footnotes on the handouts. There were provisions to preserve mom and pop operations, which had been done elsewhere. The changes gave the opportunity to incorporate service type businesses. The Shared Parking Table referencing the old Urban Land Institute (UU) standards were removed and references to UU document were inserted. More extensive definitions were added. Staff was recommending the CRA support the changes. This represented the first version of new Mixed Use Districts and staff would be scrutinizing them very closely over the next year to see how they were working. Chair Tillman opened the floor for public comments, There were no public comments received and Chair Tillman closed the floor. Motion Ms. Heavilin moved to approve the changes. Mr. Myott seconded the motion that unanimously passed. Ms. Heavilin commended CRA and City Planning Staff. She thought the quality of Site Plans and projects coming into the City were greatly improved. Having good design guidelines in place helped. She thought both staffs did a great job. 12 Community Redevelopment Agency Meeting Minutes Boynton Beach, FL October 25, 2006 VIII. Pulled Consent Agenda Items A. Approval of the Minutes - CRA Board Meeting - September 12, 2006 Ms. Heavilin noted page 21, third paragraph should read, "Ms. Herenbl:lrgcr Heavilin stated $170K. . ." Attorney Spillias commented on page 22 under discussion of the Promenade, 3rd paragraph, 2nd line, the date should be July "~ as opposed to 2004. There were no other changes. Motion Ms. Heavilin moved to approve the minutes as amended. Rev. Chaney seconded the motion that unanimously passed. F. Selection of proposer for the maintenance of the mangrove mitigation area at Jaycee Park. Mr. Sims asked if it were possible for staff to proVide an analysis, capturing the pertinent points for these items. Ms. Brooks indicated this particular item was fairly minor and was a straightforward contract. In the future, staff would put the information on an Excel spreadsheet outlining the applicant and what was being proposed. Ms. Horenburger asked whether there was a policy that when a Request for Proposal (RFP) was issued for over a certain amount, the board would see it before it was sent out. Ms. Bright responded they do not have a policy, Attorney Spillias explained the standard purchasing policy covered expenditures up to a certain amount of money and could be approved administratively by Ms. Bright without the approval of the board. Ms. Horenburger would like to see a list of what was going out. Attorney Spillias advised sometimes the cost was not known until the RFP was actually Issued. Ms, Horenburger thought the board should see anything over $SOK. Motion A motion was made by Mr. Sims to approve the item. Mr. Myott seconded the motion that unanimously passed. H. SE 4th Street Improvement Project Design Change Recommendation. Mr. Sims was able to obtain the information he needed and had no further questions on the item. Motion A motion was made by Rev. Chaney to approve Item H, Vice Chair Norem seconded the motion that unanimously passed. 13 Community Redevelopment Agency Meeting Minutes Boynton Beach, FL October 25, 2006 IX. Old Business A. Ocean Breeze Update . Incentive Recommendations Mr. Robert Reardon, Assistant Director, provided the board with a talking point analysis. He explained they were at an impasse with the Ocean Breeze project. They had originally met several times with the developer and came to a final analysis of a DIFA (Direct Incentive Funding Agreement) with indirect and direct contributions amounting to just under $4M. One such indirect contribution included the demolition of Boynton Terrace, Other contributions made were the purchase of the Peters property and additional land, which served to increase the density of the project by allowing the CRA to assemble land and add it to the Ocean Breeze project. A DIFA was established, which was an agreement the CRA would give back "X" percent of taxes to a developer who included workforce housing or pUblic amenities. Those incentives were presented to the developer, and after several meetings, they could not reach an agreement as far as the percent of profitability that the developer needed to move forward with the project. Staff felt they had exhausted their efforts and offered to buy the property back from the developer. The developer then provided an appraisal for $8.2 million, and the CRA then informed them that pursuant to board policy, they would need to obtain their own appraisal. The CRA's appraisal came back at $6.4 million with a difference of $1.8M. Mr. Reardon noted the developer was present at the meeting. The CRA was trying to institute a workforce housing project with 20 units in the HOB. Mr. Larry Finkelstein, 114 N. Federal Highway, Suite 202, was present. Mr. finkelstein explained he did not see the issue the same way Mr, Reardon did. It was Mr. Finkelstein's understanding the issue was the board's preference to purchase the property. Mr. Finkelstein stopped trying to develop the property in anticipation of selling it to the CRA. Mr. Finkelstein advised the CRA he would obtain a third party arms length appraisal, ordered by his lender under the Financial Institutions Reform Recovery Enforcement Act of 1989 (ARREA). This was a United States Federal law enacted in the wake of the savings and loan crisis in the 1980's, which established new regulations for real estate appraisals and was a true third party appraisal. The value established was similar to the price the CRA has been paying for small pieces of land in the HOB that were contiguous to the parcel he had. The Treasure Coast Planning Council Study indicated that the value of assembled land was $1.1M per acre, which was greater than their appraisal. Mr. Finkelstein had not had an opportunity to review the CRA's appraisal. The CRA wanted to spur redevelopment in the HOB, and noted it was the area with the highest crime statistics in the City. Forty percent of crime in Boynton Beach occurred in less than a half mile radius of the property. Mr. Finkelstein Indicated the project area was a depressed market within a depressed housing market. The highest and best use of the property would be as a high-density tax credit rental property, however the City, the CRA and the community residents wanted to see homes there and they worked for 1.5 years to make that happen. The property was the largest amount of assembled land in the HOB, was ready to be developed, and was cleared. They had clean environmental reports, current surveys and elevations, and a title 14 Community Redevelopment Agency Meeting Minutes Boynton Beach, FL October 25, 2006 commitment that could be converted to the CRA as a buyer. Acquisition of the land would have a significant Impact on the neighborhood and the City as a whole. Boynton Terrace was considered the second largest impediment to redevelopment of the HOB. Cherry Hills, the number one impediment, was not visible to the rest of the HOB area and did not front a major thoroughfare, as Boynton Terrace did. There were no other properties, other than Boynton Terrace that could produce 140-160 homes. It would be easier for the CRA to develop the property because they do not require a profit and because they would not have the restrictions by the lenders that he had. The CRA could put units In the Community Trust, work with local CDCs, etc. and had many other options. The property would help attract and keep employers in the area. It was Mr. Finkelstein's understanding the zoning was still not in place to increase the density. Mr. Finkelstein did not have a timeline for the options and issues he raised. He was told it was the board's preference to purchase the property and based on that premise, that was how he moved forward with the property over the last couple of months. Chair Tillman pointed out crime was down Citywide by 22%, and down 27% in the area Mr. Finkelstein held. Mr. Reardon announced the CRA had requested a title search be conducted and learned there was a foreclosure action on the property. Attorney Spillias confirmed there was an action on the property, but it did not prevent negotiation for the property, There would need to be a negotiated price that included all the costs of the foreclosure, and housing bonds issued through the county. It was a foreclosure on bonds that were issued years ago as a $5.25M bond issue. There were some issues regarding the foreclosure he was still not clear on and needed to review. There was a restriction on the use agreement with the county, which expired in approximately 2008. It was not known whether the CRA plans were consistent with the county's requirements, or whether the county would waive those requirements for the CRA as a redevelopment agency. To work out a purchase agreement, the bank would need to be brought In, a conclusion be reached about the minimum amount needed to pay all the obligations, and what contractual obligations would remain or be waived. Attorney Splllias announced he could not say what a fair price would be. Mr. Finkelstein advised the property would be purchased subject to clean title. The foreclosure was not a new development; rather, it was ongoing even prior to his purchase of the property and the City was notified as a party to the action. The land use restrictions expired for various reasons and those reasons would culminate upon payoff of the bonds, which would occur at closing. Mr. Finkelstein and his attorney had all the background information available and announced the contract would state that they would have clear title. Ms. Horenburger commented the Treasure Coast Planning Council assumed $1.1M value for property values along MLK. She noted that value was for the purpose of feasibility, and that it was based on an amount the CRA overpaid for property along MLK without appraisals. It did not indicate that was the value of the land In that area. She further asked whether the cost of foreclosure on the bond would affect the purChase price but not the title. 15 Community Redevelopment Agency Meeting Minutes Boynton Beach, FL October 25, 2006 Attorney Spillias advised the foreclosure might not affect the purchase price, as long as it included the indebtedness, including the additional cost of attorney's fees. Then, clean title would be given, the bank taken out of the picture, and the CRA would own the property. Mr. Finkelstein advised whatever number was decided upon would be a net number and would cover all of those items. Rev. Chaney thought the CRA should move forward with acquiring the property and he suggested staff should be authorized to negotiate. Vice Chair Norem thought the issue should be turned over to the attorney to work on a purchase. Mr. Myott agreed the CRA should purchase the property. He suggested the parties meet in the middle of the two appraisals. He thought the City Commission should kick in the $900K difference to make the project happen. Ms. Heavilin thought this was to be the seed project. She thought the CRA would be disappointing the community if they did not move forward. She thought a review appraisal should be considered and agreed with Mr. Myott that It was a good idea if the City Commission contributed towards the purchase. Ms. Bright explained in September, the CRA wanted to see a purchase agreement and they went back with an offer for the incentive program; however, they could not reach an agreement so they just went to purchase agreement negotiations. This was the first time they have had an appraisal that was significantly different or lower than Mr. Finkelstein's. The CRA needed direction and that was why the matter was brought to the board, compounded by the foreclosure action and county requirements. Ms. Bright thought that was what the board wanted and what should be done. Ms. Heavilin pointed out lender appraisals tend to be on the conservative side. She reiterated a review appraisal should be done. Mr. Sims wanted to direct staff to do what was necessary to move forward with the project. Ms. Horenburger asked about the attorney's advice, which was that any effort to purchase the property be based on appraisals obtained by the CRA and negotiations with Boynton Associates and the bank, concurrently, which would establish a purchase price in or around the appraised value of the property. If such negotiations were not successful, then allow the foreclosure action to run its course and re-evaluate the situation once the ownership of the property and authority to transfer it has been clearly established. She asked about the timing of those issues. Attorney Spillias reported the attorney for the bank (trustee) indicated the foreclosure action would probably be resolved in about six months, but cautioned that could always change. 16 Community Redevelopment Agency Meeting Minutes Boynton Beach, FL October 25, 2006 Motion Ms. Horenburger moved another appraisal be obtained and that negotiations take place with Boynton Associates and the bank concurrently, that would establish a purchase price in or around the appraised value of the property when the two appraisals that the CRA did come together. Mr. Sims seconded the motion. Rev. Chaney suggested if there were an Impasse that they then take the attorney's recommendation and wait to find out what would happen with the foreclosure, Motion Ms. Horenburger amended her motion to add Rev. Chaney's comments to her motion. There was no second to Ms. Horenburger's amended motion. Attorney Splllias recommended keeping the motion as originally stated and obtaining another review appraisal. His opinion was not intended to say the CRA's current appraisal was final. The original motion would give parameters to work within. He would speak with the bank and obtain payoff figures and if they could not come to an agreement, one way or another, the matter would be brought back to the board in the form of a proposal or as notice they cannot bring forward a proposal. All negotiations would include all issues needed to obtain clear titfe. ~ A vote was taken and the motion unanimously carried. Mr. Myott asked If the results would be received by the next meeting. Ms. Bright advised there was not enough time to do so, but the information could be received as a handout and not an agenda item. B. Reconsideration for the DIFA on 500 Ocean Plaza Ms. Bright announced at the previous meeting, the board directed staff to meet with the developer and the new managing partner, Mr. Arthur Slaven of Centrum Properties. In their conversations, they discussed how the market conditions were impacting the project and they considered DIFA to include workforce housing. Ms, Bright had asked him to make a presentation with a timeline and they would come back to the board after counsel and staff had an opportunity to discuss workforce amenities and publiC parking. Mr. Slaven, Centrum Properties, and a joint venture partner in Florida, MCZ Development also based in Chicago, was present. Mr. Slaven explained they became the managing partner of 500 Ocean Plaza last October. They Invested $26M In the property. They spent a Jot of money on the site and were committed to seeing the project built. He invited the board members to visit the sales center showing vignettes of what a typical interior would look like. The project was a cornerstone of redevelopment in Boynton Beach. Mr. Slaven advised when he met with staff, he did not open the project to the public because he did not want to have a false start, When the project did open, he wanted it done properly. 17 AppraiseJl..s · Consultants · Market Analysis Complet~ Summary Appraisal of . Ocean Breeze Townhomes Proposed 37-Unit Attached Town Home Project and 4.39 Acre Parcel of Vacant Multi-family Residential Land Located at 700 & 80] North Seacrest Boulevard Boynton Beach, Palm Beach County, Florida -At\G. ALTAIR APPRAISAL GROUP Prepared for: Mr. Pedro Gonzalez Vice President Mellon United National Bank ] ] 1] BrickelJ A venue, 30ln Floor Miami, Florida 33129-3]29 . . ALTAIR APPRAISAL GROUP Appraisers- Consultants · MarJ{et Analysis July 27,2006 !\1r. Pedro Gonzalez Vice President Mellon United National Bank ] 111 Brickell Avenue, 30lh Floor Miami, Florida 33129-3] 29 .. Re: Appraisal of Ocean Breeze Townhomes, a proposed 37-unit attached town home project to be located at 801 North Seacrest Boulevard and a 4.39 acre parcel of vacant multi- family residential land located at 700 N011h Seacrest Boulevard, Boynton Beach, Palm Beach County, Florida Dear Mr. Gonzalez: In accordance with your request, we have made an appraisal of the above referenced property. The subject property is further described and identified by a narrative and legal descri ption within the text of the following report. This is a complete, summary appraisal report. The purpose ofthis appraisal is to estimate the market value of the fee simple interest in the subject property both "As Is", vacant land and the proposed 37 unit town home project as fully constructed, with fee simple ownership in bulk to a single purchaser, as of the effe.ctive date of the appraisal. Market value, fee simple and other appraisal terms are defined withio"the text of the following appraisal report. As a result of our investigation into those matters which affect market value, and by virtue of Our experience and training, we have fonned the opinion that the market value of the fee simple interest in the subject property, "As Is", vacant land: effective as of July 4,2006, was as follows: Eastern Parcel (4.39 Acres) - $4,500,000 Western Parcel (3.44 Acres) - $3,700,000 Additionally, as a result of our investigation into those matters which affect market value, and by virtue of our experience and training, we have formed the opinion that the market value of the fee simple interest in the sllQject property, as if developed with a 37-unit attached town home project in bulk to a single purchaser, effective as of July 4, 2006, but projecting for a completion date of August 1, 2007 was $8,500,000, 2141-1 BIount Road '. Pompano Beach, Florida 33969 Office: 954..934.0198 "Fax: 954.33700534 Mr. Pedro Gonzalez Mellon United National Banl{ July 27, 2006 Page ii The period of time necessary to market and sell the property at or near this price, is estimated at between six and twelve months. The total period of time necessary to market and sell the individual units to individual buyers is projected at a total of 16 months, 12 months to construct the project and four months to sell the individual units. .. The appraisal analyses, opinions and conclusions were developed and this appraisal report has been prepared in conformance with (and use of this report is subject to) all regulations issued by the appropriate regulatory entities, regarding the enactment of Title XI of the Financial Institution Reform, Recovery and Enforcement Act of 1989 (FIRREA), the UnifOlm Standards of Professional Appraisal Practice as promulgated by the Appraisal Standards Board of the Appraisal Foundation and the Code of Professional Ethics, the Standards of Professional Practice ofthe Appraisal Institute and the requirements of Mellon United National Ban1e We are not expert in determining the presence or absence of hazardous substances defined as all hazardous or toxic materials, wastes, pollutants or contaminants (including, but not limited to, asbestos, PCB, UFFI, or other raw materials or chemicals) used in construction, or otherwise present on the property. We assume no responsibility for the studies or analyses which would be required to determine the presence or absence of such substances or for loss as a result of the presence of such substances. The value estimate is based on the assumption that the subject property is not so affected. This letter of transmittal precedes the summary appraisal report, further describing the property and containing the reasoning and most pertinent data leading to the final value estimate. Your attention is directed to the General Assumptions, General Limiting Conditions and Certificate of Appraisal, which are considered usual for this type of assignment and have been included within the text of this report. Respectfully submitted, Altair Appraisal Group, Inc. w~ .Lc:<.)~L fl / /1,) /: ~ L/Vt1.t~j Warren L. Wheeler President State-Certified General RE Appraiser No. RZ953 Lee Williams Senior Commercial Appraiser State-Cel1ified General RE Appraiser No. RZ2672 , . 2006- 222 Ocean Breeze Townhomes CERTIFICATE OF APPRAISAL We certifY that the statements of fact contained in this appraisal are true and correct to the best of our knowledge, and that the analyses, opinions and conclusions are limited only by the assumptions and limiting conditions included. TIley are our personal, unbiased, professional opinions. We certify that we have no present, prospective, or contemplated future interest in the real estate that is the subject of this appraisal and that we have no personal interest or bias with regard to the parties involved. We further certifY that the compensation for this appr/!.isal is in no way contingent upon the value estimate. The assignment is not based on a requested minimum valuation, a specified valuation or the approval of a loan. " This appraisal is made in confonnance with and its use is subject to the Unifonn Standards of Professional Appraisal Practice (USP AP) of the Appraisal Foundation, regulations issued by the federal banking regulatory agencies pursuant to Title XI of the Financial Institutions Refonn, Recovery and Enforcement Act of 1989 (FIRREA), and the requirements of the Code of Professional Ethics and Standards of Professional Practice (SPP) of the Appraisal Institute, and the FDIC's Appraisal Standards. This appraisal was also prepared in confonnance with the requirements of the State of Florida for State-Certified Appraisers. The signatories to this report are State-Certified. As such, their analyses, opinions or conclusions were developed and this report prepared, in confonnity with the current requirements of the State of Florida for state-certified appraisers. As of January 1, 1993, State Certification in accordance with the tenns of the Financial Institutions Refonn, Recovery and Enforcement Act of 1989 ("FIRREA") is mandatory for all federally related transactions and those involving federally insured financial institutions. A current state cettification status carries with it those extra responsibil ities identified within the state certification legislation. State certification requires annual renewal based on a stipulated program of continuing appraisal education. Neither all nor part of this report shall be disseminated to the general public by the use of any public communications media without the prior written consent of the undersigned appraisers. The use of this report is, however, subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives and by the State of Florida relating to the Real Estate Appraisal Sub-Committee of the Florida Real Estate Commission. Lee Williams and Warren L Wheeler certifY that they have personally inspected the subject property and eveI)' comparable included in this report. . . Altair Appraisal Group, Inc. 2006- 222 Ocean Breeze Townhomes 2 CERTIFICA TE OF APPRAISAL (Continued) Eastern Parcel (4.39 Acres) - $4,500,000 Western Parcel (3.44 Acres) - $3,700,000 Additionally, as a result of Our investigation into those matters which affect market value, and by virtue of our experience and training, we have formed the opinilpn that the market value of the fee simple interest in the subject property, as if developed as a 37-unit attached town home development in bulk to a single purchaser, effective as of July 4, 2006, but projecting for a completion date of August I, 2007 was: ~ EIGHT MILLION FIVE HUNDRED THOUSAND DOLLARS ($8,500,000) The period of time necessary to market and sell the property at or near this price, is estimated at between six and twelve months. The total period of time necessary to market and sell the individual units to individual buyers is projected at a total of 16 months, 12 months to construct the project and four months to sell the individual units. Respectfully submitted, Altair Appraisal Gmup, Inc. w~ J-. cUfi~. _L/ ,1;/1 Ii ~.{/VdJL~ Warren L. Wheeler President State-Certified General RE Appraiser No. RZ953 Lee Williams Senior Commercial Appraiser State-Certified General RE Appraiser No. RZ2672 Altair Appraisal Group, lnc. 2006- 222 Ocean Breeze Townhomes 3 AL T AIR APPRAISAL GROUP, INC. ASSUMPTIONS AND LIMITING CONDITIONS This appraisal/valuation analysis report has been made with the following general assumptions: J. No responsibility is assumed for legal description or for matters including legal or title considerations. Title to the property is assumed to be good and marketable unless otherwise stated. 2. The property is appraised free and clear of any or all:'liens or encumbrances. 3. Responsible ownership and competent property management are assumed. .. 4. Th information furnished by others is believed to be reliable and, when possible, was independently verified. However, no warranty is given for its accuracy. 5. All engineering is assumed to be correct. The plot plans and illustrative material in this report are included only to assist the reader in visualizing the property. 6. There is no indication of and it is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures that render it more or less valuable. No responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them. 7. It is assumed that all required licenses, certificates of Occupancy, consents, or other legislative or administrative authority fi'om any local, state, or national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based. 8. This report is writte.n in compliance with the Uniform Standards of Professional Appraisal Practice, OTS, FDIC, acc, Federal Reserve and NCVA per FIRREA title 11. 9. In multiple tenant buildings, sud) as apartment and office buildings, the appraisers inspect as many units as possible. However, access to all units is not always possible. Therefore these appraisals are based on the assumption that, unless otherwise stated, all units are in rentable condition. 10. The appraisers will note general roof condition observable during inspection of the subject property. However, the appraisers are not always able to see all parts oftlle roof structure and are not roofers or experts in roof construction. The reader is advised to consult professional roofing contractors for specific infonnation on the condition of the roofing components, I I. The appraisers will noted general mechanical equipment condition during inspection of the subject property. However, the appraisers are not always able to see al/ mechanical equipment in operation and are not experts in mechanical equipment. The reader is advised to consult professional mechanical equipment contractors for specific infonnation on the condition of the mechanical equipment components. Altair Appraisal Group, Inc. 2006- 212 Ocean Breeze Townhomes 4 ASSUMPTIONS AND LIMITING CONDITIONS (Continued) 12. The appraisers will note general signs of tel1nite infestation during inspection of the subject property. However, the appraisers are not always able to see all parts of the building structure and are not pest control experts. The reader is advised to consult professional pest control contractors for specific infonnation on tennite infestation and/or damage. 13.' The property has no cultural, scientific or historical 'value, unless stated. 11\ 14. The property has no apparent violations of the Americans with Disabilities Act of I 990, unless stated. 13. The existence of hazardous material, which mayor may not be present on the property, was not observed by the appraisers. The appraisers have no knowledge of the existence of such material on or in the subject property. The appraisers, however, are not qualified to detect such substances. The presence of substances such as asbestos, urea- fonnaldehyde foam insulation or other potentially hazardous material may affect the value of the property. The value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field if desired. This appraisal/valuation analysis report has been made with the following general limiting conditions: A The distribution, if any, of the total valuation in this report between land and improvements applies only under the stated program of utilization. The separate allocations for land and buildings must not be used in conjunction with any other appraisal analysis and are invalid if so used. B. Possession of this report, or a copy thereof, does not carry with it the right ofpublication. It may not be used for any purpose by any person other than the party to whom it is addressed without prior written consent of the appraisers/analysts, and in any event, only \-'lith proper written qualification and only in its entirety. C. The appraisers/analysts herein, by reason of this appraisal analysis, are not required to give further consultation, testimony, or be in attendance in court with reference to the property in question unless arrangements have been previously made. D. Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraisers/analysts, or the finn with which the appraisers/analysts is connected) shall be disseminated to the public through advertising, public relations, news, sales or other media without the prior written consent and approval of the appraisers/analysts. Altair Appraisal Group, Inc. 2006- 222 Ocean Breeze Townhomes 5 SUMMARY OF APPRAISAL Subject Prope.-ty: Ocean Breeze Townhomes, 80 I North Seacrest Boulevard, Boynton Beach, Florida and a 4.39 acre parcel of vacant multi-family land. Type of Property: Proposed 37 unit attached family town home project (western parcel) and additional multi-family parcel (eastern parcel). Unit Mix: 37 units - average size 1,400 square feet All 3 bedroom/2.5 bath town home units . Interest Appraised: Fee Simple Ownership: Boynton Associates, Ltd. Zoning: R-3, Multi-family residential Current Tax Data: Eastern parcel Folios: 2005 Assessment 2005 Taxes 08-43-45-21-10-001_00 I 0 and -00-000-0021 $141,000 (Land Only) $ 3,n7 (Land Only) Western parcel Folios: 2005 Assessment 2005 Taxes 08-43-45-21-07-003-1230 $108,000 (Land Only) $ 2,480 (Land Only) Flood Zone: Zone C Site Description: Eastern parcel Shape Size Frontage Generally Rectangular 4.39 Acres or 191,228 square feet 306 :!:: feet on Seacrest Boulevard, 570 :!:: feet on Northeast 71h Avenue & 316 .:!:: feet on Northeast I'l A venue Western parcel Shape Size Frontage Irregular 3.44 Acres or 149,846 square feet 228 .:!:: feet on Sea crest Boulevard, 205 :!:: feet on Northwest 8th Avenue & 193 :!:: feet on Northwest 151 Street Altair AppraIsal Group, Inc. 2006- 222 Ocean Breeze Townhomes 5 SUMMARY OF APPRAISAL Subject Property: Ocean Breeze Townhomes, 80 1 North Seacrest Boulevard, Boynton Beach, Florida and a 4.39 acre parcel of vacant multi-family land. Type of Property: Proposed 37 unit attached family town home project (western parcel) and additional multi-family parcel (eastern parcel). Unit Mix: 37 units - average size 1,400 square feet All 3 bedroom/2.5 bath town home units It Interest Appraised: Fee Simple Ownership: Boynton Associates, Ltd. Zoning: R-3, Multi-family residential Current Tax Data: Eastern parcel Folios: 2005 Assessment 2005 Taxes 08-43-45-2 I -1 0-00 1-0010 and -00-000-0021 $141,000 (Land Only) $ 3,~37 (Land Only) Western parcel Folios: 2005 Assessment 2005 Taxes 08-43-45-2I~07-003_1230 . $108,000 (Land Only) $ 2,480 (Land Only) Flood Zone: Zone C Site Description: Eastcm parcel Shape Size Frontage Generally Rectangular 4.39 Acres or 191,228 square feet 306 ::!: feet on Seacrest Boulevard, 570 ::!: feet on Northeast 71h Avenue & 316 ::!: feet on Northeast 1'1 A venue Western parcel Shape Size Frontage Irregular 3.44 Acres or 149,846 square feet 228 :t feet on Seacrest Boulevard, 205 ::!: feet on Northwest 8th A venue & 193 ::!: feet on Northwest 1 SI Street Altair Appraisal Group, rnc. 2006- 222 Ocean Breeze Townhomes 6 SUMMARY OF APPRAISAL (Continued) High~st and Best Use: As if Vacant Multi-family residential development " Improvements: Building Type Number of Buildings Number of Floors Year Built Effective Age Condition Proposed 2-story single family town home project 8 2 Proposed 2006 New Excellent Economic Data: Average Retail Unit Value Absorption Rate Discount Rate Discounted Sellout Bulk Value Indication $280,000 5 units per month 12.00% $8,200,000 $221,622 per unit Value Indications: "As Is" Land Only Eastern Parcel Western Parcel $4,500,000 $3,700,000 "As Completed" 37-unit Town home Project Cost Approach $9,000,000 Income Approach Discounted Sell Out $8,200,000 $8,500,000 "As Completed" Final Value Estimate: Per Unit $229,730 Date of Valuation: July 4, 2006 Date of Completion: August 1, 2007 Date of Report: July 27, 2006 Altair Appraisal Group, Inc. 2006- 222 Ocean Breeze Townhomes Exposure Time: 7 Conditions: 4j. The period of time necessary to market and sell the property at or near this price, is estimated at between six and twelve months. The total period of time necessary to constnlct market and sell the individual units to individual buyers is projected at sixteen months. This appraisal is subject to the General Assumptions, General Limiting, Conditions and Certificate of Appraisal included in the text. A/tair Appraisal Group, Inc. . 2006- 222 Ocean Breeze Townhomes The purpose of this Complete/Summary Appraisal Was to estimate t' e market val u e ofthe fee simp I e in1er~st in the subject property both "As Is" and "As Comple1ed' single family town home projec1 in bulk to a single purcbaser, as of 1he effective date of this appraisal. The subjec1 property is currently vacant land a portion of which will be improved with a town home project. PURPOSE OF APPRAISAL AND USE RESTRICTIONS 8 This report is for the exclusive use of the addressee. It is our understanding that this rcpor1 will be used for internal purposes including, bU1 not necessarily Iimjted to rendering a decision on the mortgage financing of this property. . . Market value as used within this report is as defined by the Office ofthe Controller Of1he Currency under 12 CPR, Part 34, Subpart C. Dcfinitions as referred 10 in tbis analysis are contained io 1he addenda section of this report. DEFINITION OF MARKET VALVE EFFECTIVE DA TE The effective date of this report is July 4, 2006, 1hc dale of iospecti on. The completion date of the improvements is estimated at August 1,2007 and the last unit is projec1ed '0 be sold in November 2007. The expresscd value estimate considers the fee simple inleres1 in the subject property. A11he lime ofinsPOC1ion the property was vacant Wi1h no cons!ruction in progress. No value was atlribu1ed 10 any non-realty or personal property (FF & E) in this report. PROPERTY INTEREST APPRAISED LEGAL DESCRIPTION The subject properly has a lengthy legal description that can be found in its entirety in the Addenda section of this appraisal report. Altair Appraisal Group, Inc. 2006- 222 Ocean Breeze Townhomes 9 SCOPE OF APPRAISAL The subject propeny is currently two parcels of vacan1 land. The wes1em portion ofthe property will be improved with a 37-unit at1ached town home project. We are valuing the laud as vaCant and the proposed 37 unit single fami Iy town home projec1as comp leted and in bu Ik to a singl e purchaser. " The scope ofIhis Complete/Summary Appraisal has becn 10 collect, confinn and "port data. Olher general marke1 data and conditions have been considered. Consideration has been given 10 the propeny's zoning, site plan approval, surronnding improvemi;!1ts and neighborhood. The work perforoled for this assignment inclnded; Preliminary analysis of the appraisal problem; inspection of 1he property being appraised, consideration of highest and best nse, collection and analysis of comparable land and individual town home sales which would lead tn 1he comple1ion of the COS1 and Income Approaches (Discounted SelloU1 analYSis )for the proposed project and the Sales Comparison Approach for the vacan1 parcels as of the effective date 0 f this report; estimating a value indication for the subject property and preparation of a written report. In the valuation of 1he propeny as improved, appropriate research was condncted relevant to the appraisal process, including the collec1ion and analysis of comparab Ie sales 0 f indi v idual10wn home units, h istoricalabsorption rates within competing deve lopments and sales expenses for COmpe1i tive projects. ln conducting our research and analysis several Sources of data were employed APPRAISAL PROCEDURE FOLLOWED The market value of the 37 subject 10wn home units is estima1ed in bulk In a single purchaser. In estimating the marke1 value of 1he subject 10wn homes, we considered the income approach (Discounted SeIlout Technique) and the cost approach. APPRAISAL PROCESS There are three traditional approaches nonn'lIy used by appraisers in the estimation of market val ue. These 1hr.e approaches provide data from three market perspectives. The three techniques a" thc cost approach, the sales comparison approach and the income approach. TIle Cost Approach is the SUm oflhe land value and Ihe cost of the new improvements less aCcrued depreciation. The cost approach is based on the premise that an infonncd, ratio", I in vestor/purchaser would pay no more fur an existing propeny than it wonl d cost him to reproduce a su bsti lute propeny with the same utility without undue delay. The Income Approach is based on the premise Ihat a prudent investor would pay no more for the subjec1 propeny than hc would for another invcstment with similar risk and return characteristics. Since 1h, value of an investment can be considered equal 10 Ihe presen t worth of anticipatcd fu tu" benefits in 1he fonn of dollar income or anleni1ies, this approach estimates the p'esen1 value of the net income thaI the propeny is capable of producing. This amoun1 is capitalized a1 a rate which should reflec1 risk to the in ves10r and the amount of income necessary to support debt service or the mortgage requirement. Altair Appraisal Group, Inc. 2006- 222 Ocean Breeze Townhomes The Sales Comparison Approach is the process for comparing price, paid for properties having a satisfactory degree of similarity to the suhject property adjusted for differences such as time, loca'ion and physical characteristics. This approach is hased upnn the principle of SUhstitu1ion, which implies that a pruden1 purchaser will not pay mOre to buy a property than it would cos1 him to buy a comparable substitute property in a similar location. 10 ~ The income approach was emp loyed hy applica1i on 0 f the DiscOunted Se 1I0ut Analysis (DeF). This analysis was developed by first researching sales and absorption rates of other residential properties in similar developments in tbe subject marke!. We also analyz,d various prodncts existing in the market to detennine the reasnnab leness of the prnposed retail pri'cin g for the Subjec1 un i Is. From 1his data, we extracted the average retail unit value. Wc then projected an average absorption rate for the subject units, based upon the sale price and demand for this prodnc1 type in the subject marke!. We have also detennined reasonable expen,cs 1hat will be incurred during the sellnnt of thc subject property. The retail sales of the subject units were projected, expenses deducted and the net sale proceeds discounted '0 a present valne estimate, reflecting 1he indication of valne hy the income approach. Altair Appraisal Group, Inc. .. SUBJECT PHOTOGRAPHS 2006- 222 Ocean Breeze Townhomes 12 View of Eastern Subject Parcel t'F'~_ ," 1i7}i...j...,,,..~_.. ~. !., .:~~f~, " -:.:...~.''!'"...7 ~;~. ~~...- ~. . -.;".0; ~_. " ~ -..., .., -..~.~ . . I'-;'!j.,;~ View of Eastern Subject Parcel Altair Appraisal Group, Inc. 2006- 222 Ocean Breeze Townhomes 13 View of West em Subject Parcel ~-_.~. --_. -- -~_.._._. _. -0_, ._ _ .__ '" .i ~, . \,' . ~ ~" ..1,".':1+:.' '~~.l.";~..;..' -"",~%\i;::; View of West em Subject Parcel Altair Appraisal Group, Inc. 2006- 222 Ocean Breeze Townhomes 14 View Along Adjacent NOlih Seacrest Blvd Facing North II View Along Adjacent North Seacrest Blvd Facing South Altair Appraisal Group, Inc. Il\ REGIONAL INFORMATION '. ", 76 2006-222 County Map MARTIN \\.:, , ,. ..: \ t. 'Par.k~ and;' .' /, r---' -.o.ta\~':Redrea'tibhiOEiPt.., "''-'-''='~T''~-70G =-..'~'. ~,-~~:~:-;tlt~;'~?':':{:. " ""'::'" ",,, '"~lI~~C " -. 611 \' '.' ., -- 1. '-'-I.-')~J~~Cl Beach' {! I ". R; ---j' Ii ", ;" r:C-=-:;':;'J..- _ . --'60.98 ()' 'i .' . :;'1"-.1;1 70~ "~~k~,Pfirk . . ..' -"--Palni. Beach Shores (0 "." ','d' ':',' ;,' , i t._.. .. " .. -~..:ii'.._. ;, Lake Ii Okeechobee ': ',' 27. 70.0. .. P A l'M Pratt-Whitney Canal Point " ..:i Pahokee: Q.. : "::1 ..... 717 ,il It r J' ~' 96 :I:, c: -. g; ~I 441 L ~ 715 .o.. .. '_'H . \. i,.'iS."JI.Ga,IOdr.EHvd.. j' )>..e eGa e j 80 " I I I J. 880. ' Ocean \"''- .'Th e"E:,V'e r g I ade-s '.'. .' ~,\ 1\ ,. ~. . 0 mi 5 10 15 20 Copyrighl@ 196~2005 Microsoft Corp, and/or its su~pliers. All righls reseIVed. ht1p:/Iwww.microsoft.cOmlstreelsl @2004 NAVTEa. An nghls reserved. This dala includes informatlo" take" with permlSs;,," Irom Canadian Bu'honties @ He. Majesty the auee" In Righi 01 Canada, Ifl Copyright 2004 by T eleAtlas North America. Inc. All righls reserved 2006- 222 Ocean Breeze Townhomes 17 TRl-COUNTY ANALYSIS The Regional Analysis for the Tri-County area is contained in the addenda section of this report. * Altair Appraisal Group, Inc. . NEIGHBORHOOD INFORMATION I': . ,"1>'-' [anlari'iff-:F~dt , \, " '.;, - : ~ . I .. ' ....-. " .Ocean ~idge ., "'.'.-.'. tf_ ..' :1':-'" .:- .l,\ ," c:: l'CJ llJ (j ,0 , , ~< ,. d.&, . !; ~l 0- j i i I"~. '(,j ... t: iii ,.., .... I; '::t I, rami 0.5 1 15 2 2.5 Copyright ~ 1988.2005 Microsoft Corp, andlor ils sLV'pliers. All righls reserved. hUp:llwww.microsofl.com/streetsl ~ 2004 NAVTEQ. All rights reselVea. This dala ine/uaes information taken with permission Irom Canadian aUlhor/lies <1J Her Majesty the Queen 'n RighI of Canada. tI;> CoPy"ght 2004 by TeleAllas Nor1h America. Inc, All rights reserved. 2006- 222 Ocean Breeze Townhomcs 20 IMMEDIA TE NEIGHBORHOOD IN FORMA TION A neighborhood may be defined as a portion of a larger community, or an entire community, in whicp there is a homogeneous grouping of inhabitants, buildings, or business enterprises. Inhabitants of a neighborhood usually have more than a casual interest in their community. Neighborhood boundaries may consist of well-defined natural or man-made barriers, or they may be more or less well defined by a distinct change in land use or in the character of the inhabitants. Location ~ The subject is located in the City of Boynton Beach, Palm Beach County, Florida. The neighborhood is considered bound by Woolbright Road to the south, the Boynton canal to the north, Interstate 95 to the west and Federal Highway to the east. Portions of this area including the subject sites are within the Community Redevelopment Area. Transpo."tation Routes Both subject parcels are located on Seacrest Boulevard, which is a busy north/south street in this residential area. All of the boundary streets are major thoroughfares and intersect with a number of other major roadways to provide access to the subject neighborhood. Overall, access into and through the subject neighborhood is considered to be good. Area Development Various commercial and retail uses are located on the major roadways as well as single and multi- family improvements. The secondary streets are primarily developed with residential dwellings consisting of rental apartments, condominium apartments and single-family homes. The area demonstrates high occupancy levels for all property types. There are several churches in the immediate area and the Boynton City Hall is within this neighborhood at the corner of Boynton Beach Boulevard and Seacrest Boulevard. The described neighborhood is considered approximately 85% built-up. There is some land currently available for sale and SOine older improvements are being demolished and redeveloped.. Conclusion The defined subject neighborhood is considered in the stability stage of its life cycle with some growth as the vacant land is improved upon and older properties are redeveloped or renovated. All typical amenities such as restaurants, grocery stores, gas stations and service offices can be found and are easily accessible. There is adequate employment nearby. Altair Appraisal Group, Inc. " SUBJECT PROPERTY DATA 2006- 222 Ocean Breeze TOWhhomes 22 SUBJECT PROPERTY DATA Location: The subject's physical address is 700 and 801 North Seacrest Boulevard. The eastern parcel is located on the southeast corner of Seacrest Boulevard and Northeast 71h A venue, The western parcel is located on the southwest comer of Seacrest Boulevard and Northwest 8th A venue. Both propeliies are located in the City of Boynton Beach, Palm Beach County, Florida. ~ Current Ownership: The property history has been provided via one ifno1 more oflhe following methods: verbal communication, contracts, deeds, leases, public,ations, closing statements et cetera. We have not performed a title search, nor do we warrant Ihal the history, as presen1ed herein, is completely accurate since we have not perfolmed a title search, nor do we warrant that history, as presented herein, are completely accurate since we have relied upon the infonnation of others. Any person or entity contemplating an interest in the subject property, should rely upon a title search and opinion prepared by a qualified attorney-at-law. According to public records, the property is currently under the ownership of: Boynton Associates, Ltd. 1 14 North Federal Highway, Suite 202 Boynton B.each, Florida 33435 Histn ry of the suh ject property: There are no known sales or Iransfers of 1he sn b jec1 p'operty within the past five years. Flood Hazard Statement: According 10 tile Federal Emergency Management Agency (FEMA) Flood Insurance Rale Map Number 120 I 960004C da1ed September 30, 1982, Ihe subj ecl property is located in zone C. This is designated as an area outside of the 100 and 500 year flood plains. Assessment and Taxes: The subject property is assessed taxes by the county. The real estate taxes are collected annually, in arrears, and are based on the assessed value less any exemptions such as homestead, widow and disability. The 2005 assessment and the taxes for the subject are shown on the following chart. .. ID Numbers Eastern Portion Western Portion 08-43-45-21-00-000_002 I 08-43-45-2 I - 10-001-0010 08-43-45-21-07-003_ 1230 Total Assessment $141,000 Vacant land $ 3,237 Vacant land $] 08,000 Vacant land $ 2,480 Vacallt land There are no known delinquent taxes as of the date of the appraisal. Total Real Estate Taxes Altair Appraisal Group, Inc. The Flood Insights Test Results For: 700 N SEACREST BLVD, BOYNTON BEACH,FL 33435 Original Input Address: 700 N SEACREST BLVD, BOYNTON BEACH,FL 33435 Page 1 of 1 Flood Zone Determinations SFHA Within 250 feet of multiple flood zones? Out No Community 120196 Community_Name Zone BOYNTON BEACH, CITY OF C Panel 0004C, Panel_Dte 19820930 .. FIPS CensusTract 12099 0061.00 Copyright 2000, First American Flood Data Services. All rights reserved. SLubject .- , ~\S''f...:.t 'it,t-. ME. Slh AYe FloodMap Legend FlOo-:J Zones AT... t"""daled by 600-year flooding Aru, oulsul. 01 Ill. 100- 11><1 GOO-y... r,~D.pl.."15 AlOft in""."!." Ily I&o..year noolllng ~~ kus lnund.lad by lGD-yed' fl.Odlng willi ".,lOclly IIIl:U.ld ... F1G1)lf''''y'''Das _ FIO~y D'O", l'oiIlh voloeily hal\l'd Arus ohm"""''''''''d l>\II pO";~ flD 0<1 hOUllds Ate.. nGI ftNt/lllu" on airy pl..~lish.d FIRM Al<llIist Priolo Fault Zones C ..-:3 Alea Defined as an Eilfthquake Haz.ud Produced by Roodlnsights. Com, a service of CDS Business Mapping, LLC (617)737-4444 'n.SAnortllofDI fir IiDfc Clene/llol tile CustD..... thalOrtktfldltftClP3lCtIol ""' Fle,."I<lnOiStMteaon-.. pl'DPl!ltytralol",-boflIlfCHlGodby I\atC..aarr.e, fl'l4lCuSfomefs "'.01 :..::..:..~::~";S:'"'J':.r: ;'O;;~.,,~.::~"t.:l~""::'!>F'~"s.~~~::.\'Es""Z..~mr.~~~1.;:."&r. ~~iE'r :~'.':."r.l:r"'..c!m~,.:'t~:;m'~..Nl. ACCu..c, OA'C""'...,......, OF '"IS "PD" "Cl......G.H' v,......"'~ "'AC""""..,,,,,,.. "'N'SS FO.. P'.'lClAAA PU'PD" N...., ,,"',..... selle' 01 tfti~ RapOrllt\lM hAve an~ hi~ 10 I"V rnl>d INI"V ~ 1I11y uw or fill"'. ollt1rs RttlOtf COBRA COBRA_ OUT 07/13/06 2006- 222 Ocean Breeze Townhomes 24 SITE DESCRIPTION All site data in this appraisal report is based Upon the surveys, site plans and drawings supplied to the appraiser, the public records available from the Palm Beach County Property Appraisers office, and the physical inspection of the subject property site. Eastem Parcel Ii- According to the survey of the eastern parcel drawn by O'BJien, Suiter & O'Brien, Inc dated October 2005, the area is 19 I ,382 square feet or 4.39 acres. There is approximately 296 feet of frontage on the east side of Seacn::st Boulevard, 569 feet of frontage on the south side of Northeast 7lh A venue and 202 feet of frontage on the west side of Northeast pi Street. The site is generally rectangular in shape comprised of two contiguous parcels. The site is generally level at street-grade with adequate access and visibility. Typical utility easements are assumed to exist on the subject site with no adverse affect on use, value or marketability. The property owner has began the site plan approval process for this property. Westem Parcel According to the survey of the western parcel drawn by O'Brien, Suiter & O'Brien, rnc dated July 2005, the area is 149,9 19 square feet or 3.44 acres. There is approximately 228 feet of frontage on the west side of Sea crest Boulevard, 205 feet of frontage on the south side of Northwest 8111 A venue and 193 feet of frontage on the east side of Northwest I"' Street. The site is ilTegularly shaped. The site is generally level at street-grade with adequate access and visibility. Typical utility easements are assumed to exist on the subject site with no adverse affect on use, value or marketability. There are two road right of ways that traverse this parceHhat were abandoned by the City of Boynton Beach in 197 I. Total Property The subject sites are adjacent to other residential developments and a church. The property appears adequate to support the type and style of proposed construction. No sailor engineering tests were reviewed and the sites are presumed to be available for development without excessive development costs. The size and shape of the subject sites would appear to allow for development to the pernlitted maximum without excessive site development or planning costs. All utilities required to support development are available and have capacity to suport the proposed subject improvements. Altair Appraisal Group. Inc. 2006- 222 Ocean Breeze Townhomes 25 ZONING Zoning Designation: R-3, Multi-family residential. Land"Use Designation: HDR, High Density Residential. Authority: City of Boynton Beach The subject parcels are located within the "R - 3" zon ing c lassifici\lion and the "HD R" land Use area. These designat ions pem,it multi -fam ily residen1i al uses with a 111 ax imum dens i ty of I 0.8 dwelling units per acre. ~ Permitted Uses: These designations pemit a variety of multi-n:lmily Llses. The 37-unit town home project that is proposed for the western parcel appears to be a legal COnfonning use because the CUrreut density is in compliance with that presenl/y allowed by city zoning code. The 37 unit project has received preliminary site plan approval from lhe City of Boynton Beach. The Community Development Agency along wi1h the City of Boynton Beach is developing new zoning that would pennit a maximum density of 20 dwelling unils per acre. This new zoning classification should be completed before the eastcm parcel is developed. However, We are appraising both parcels based on the current maximum pemitted density. Altair Appraisal Group, Inc. 2006- 222 Ocean Breeze Townhomcs 26 IMPROVEMENT DATA Type: A proposed 37 unit two-story single family town home project. Age and General Condition: The subject improvements are proposed and considered as ifnewly constnlcted and in excellent condition. Construction Quality: The proposed subject improvements are considered good quality construction and superior to tlle typical quality of the surroundi,pg neighborhood. This opinion is based upon the available marketing data furnished by the developer and the observed quality and condition of the surrounding neighborhood properties and competing market areas. to\ We assume no responsibility for hidden or unapparent conditions beyond Our expel1ise as appraisers, We are not expert in construction techniques and it is assumed that the buildings will be structurally adequate and in conformance with applicable building codes. The subject is a proposed two story concrete structure with stucco finish, glass windows and metal roof. Unit Mix/Size: The proposed unit mix is as follows. 37 - 3 BRJ2.5 BA Units with 1 car garage 1,400 :t SF under ale 281 :t SF General Layout and Efficiency: The subject units will be located in eight two-story bUildings. The unit size, configurations and the buildings appear to be fully functional and generally consistent witl] competing properties in the subject area. The unit and building areas were provided by the property owner. The appliance package will inclUde central AC, stove, dishwasher and refrigerator. Parking Facilities: There are 35 proposed parking spaces and 37 single car garages. The parking allocation is considered above average and more than required by city zoning. Yard Improvements: The subject site reflects average quality landscaping, consisting of sod, shrubs and trees, and is considered reflective of the standards for the neighborhood. A park area, tot lot and walking trail are proposed as exterior yard amenities. Hazardous Wastes or Toxic Materials: None were observed and none came to our attention; however, we are not expert in these matters and aSSume no responsibility in these regards. Please refer to Item IS of the "General Assumptions" of this appraisal for a full disclaimer. Condition and Maintenance: The property condition will be considered as new and in excellent condition Upon completion. Altair Appraisal Group, Inc. 2006- 222 Ocean Breeze Townhomes Exterior Walls: PROPOSED CONSTRUCTION DETAILS AND CONDITIONS 27 Concrete wit11 brick and stucco finish. Doors: Metal and glass in aluminum frame. Windows: Single-hung windows. Roof: Pitched roof with metal finish Floors: Carpet and ceramic tile. * Wall Finish: Painted drywall. Restrooms: Ceramic tile flooring and wainscot. Fixtures include tub/shower, toilet, sink and vanity. Heat and Air Conditioning: Individual central units. Kitchen: Melamine cabinets with Formica countertops. Electric range/oven, dishwasher, and refrigerator. Condition: The improvements should be In new-excellent condition upon completion. Additional Features: Individual washer and dryer hookups, park area, tot lot, walking trail. Brick paver community entry. Altair Appraisal Group, Inc. 11\ HIGHEST AND BEST USE 2006- 222 Ocean Breeze Townhomes 29 HIGHEST AND BEST USE ANAL YSIS In order to estimate the highest and best use of the subject property, we have considered those uses whic.h are legally penllissible, physically possible, economically feasible and which would result in the highest return to the land. Consideration must be given to the site characteristics such as size, shape, location, access to roadways, availability of utilities and public services and surrounding land uses. An analysis of the highest and best Use of any propcrty invoilves two separate studies: (I) an analysis of the site "as if vacant" and (2) an analysis of the subject property "as improved." 4i- We have considered the criteria for highest and best use and have concluded in the opinion that the highest best use for the subject property "as ifvacant" is for a moderate to l1igh density residential development such as a town home, condominium or apartment project. The highest and best use is considered to be consistent with the proposed property. Our estimate of the highest and best use of the subject site was based on the following legal, physical and economic considerations. "As If V Rcan t" LegalJyPermissibJe: The subject property is zoned and available for multi-family residential use. Property development regulations are relatively liberal and would not unduly hinder or restrict development of the site. The subject appears adequate to be developed in conformance to zoning. Based upon consideration of surrounding development and land uses, we are of the opinion that there is little probability of a land use change at the subject site. After reviewing the legal constraints placed upon the subject site, we are of the opinion that a medium to high density residential development is legally permissible. . ' Physically Possible: The subject property has frontage on a busy north/south roadway with a total area of 7.83 acres. The substantial development of surrounding parcels provide evidence that the soil conditions are adequate to support physical development. The size, configuration and topography of the subject parcels appears conducive to physical development. Primary access to the subject property is from Seacrest Boulevard which is a busy north/south artery in this neighborhood. This is considered to be similar to that of other properties in the immediate vicinity and good for a property of this type. Access into and through the neighborhood, as well as to the subject site is adequate. The subject property is served by all necessary public utilities including water and sewer, electricity and telephone, and police and fire protection in adequate capacity to support development on the subject. Altair Appraisal Group, Inc. 2006- 222 Ocean Breeze Townhomes 30 Economically Feasible: The subject property is located in a residential area just north of Boynton Beach Boulevard along Scacrest Boulevard. This area has a majority of residential uses with commercial zoning along the major traffic arteries. The surrounding uses include churches, rental apaJ1ment complexes and single family residential uses. There are several new condominium and townhouse projects being constructed in the City of Boynton Beach with units selling from the high $200,OOOs to over $600,000. Many of the newer projects are condominiums. The development of the property as an attached town home project provides for a good return on the land. i Conclusion: In conclusion, after reviewing the legal, physical and economic factors, we are ofthe opinion that the highest and best use of the subject site, "as if vacant," is for moderate to high density residential use, most likely a town home or condominium development. "As Improved" Legally Permissible: The subject property is zoned and available for multi-family residential use. Property development regulations are relatively liberal and would not unduly hinder or restrict development of the site. The subject appears adequate to be developed in conformance to zoning. Based Upon consideration of surrounding development and land uses, we are of the opinion that there is little probability of a land Use change at the subject site. After reviewing the legal constraints placed upon the subject site, we are of the opinion that a medium to high density residential development such as the proposed 37-unit attached town home project is legally permissible. The proposed project has received sit plan approval from the City of Boynton Beach. Physically Possible: The subject property has frontage on a busy north/south roadway with a total area of7.83 acres, The substantial development of surrounding parcels provide evidence that the soil conditions are adequate to support physical development. THe size, configuration and topography of the subject parcels appears conducive to physical development. Primary access to the subject property is from Seacrest Boulevard which is a busy north/south artery in this neighborhood. This is considered to be similar to that of other properties in the immediate vicinity and good for a property of this type. Access into and through the neighborhood, as well as to the subject site is adequate. The subject property is served by all necessary public utilities including water and sewer, electricity and telephone, and police and fire protection in adequate capacity to support the proposed development on the subject. Economically Feasible: The subject property is located in a residential area just north of Boynton Beach Boulevard along Seacrest Boulevard. This area has a majority of residential uses with commercial zoning along the major traffic arteries. The surrounding uses include churches, rental apartment complexes and single family residential uses. There are several new condominium and townhouse projects being constructed in the City of Boynton Beach with units selling from the high $200,000s to over $600,000. Many of the newer projects are condominiums. The proposed development of the property as an attached town home project provides for a good return on the land. Altair Appraisal Group, Inc. 2006- 222 Ocean Breeze Townhomes 31 Conclusion: In conclusion, after reviewing the legal, physical and economic factors, we are of the opinion that the highest and best use of the subject site, "as improved," is for moderate to high density residential use, most likely a town home or condominium development similar to the proppsed 37 -unit town home project. .. Altair Appraisal Group, Inc. . DISCUSSION OF VALUE 2006- 222 Ocean Breeze Townhomes 33 APPRAISAL PROCESS There are three traditional approaches normally used by appraisers in the estimation of market value. The~e three approaches provide data from three market perspectives. These three techniques are the cost approach, the sales comparison approach and the income approach. ~ The cost approach is based on the premise that an informed, rational investor/purchaser would pay no more for an existing property than it would cost him to reproduce a substitute property with the same utility without undue delay. The cost approach analyzes tbe components of raw land added to the combined improvement costs. Improvement costs include both direct and indirect construction charges. When all development costs have been identified and estimated, including site value, an appropriate allowance for developer's profit is added. The cost apprOach is generaJIy only applicable if the subject subdivision or project is new or proposed, or if the majority of the units have not yet been sold. The subject property is a proposed 37- unit attached town home project, the cost approach is applied in the valuation of the subject property. The income approach is based on the premise that a prudent investor would pay no more for the subject property than he would for another investment with similar risk and retum characteristics. Since the value of an investment can be considered equal to the present worth of anticipated future benefits in the form of dollar income or amenities, this approach estimates the present value of the net income that the property is capable of producing. In the case ofa subdivision or condominium development, the income approach is employed via the "Discounted Sellout Analysis." The discounted sellout analysis is actually a hybrid method which combines key elements of the sales comparison approach with the income approach. The individual subject units are valued by comparison to other competing developments which is a procedure used within the sales comparison approach. However, a terminal income approach is used to estimate expenses involved with selling out the units over time. Net sales proceeds are then discounted to a present worth estimate. The discounted sellout analysis is the basic valuation procedure for a subdivision or condominium apartment development having a tcnninal cash flow. The underlying rationale behind this approach is that the value of a project under a market value concept is equivalent to the present worth offulure benefits accruing to ownership over a projected holding period. The sales comparison approach relative to a subdivision is employed through an analysis of "bulk" sales of units. A bulk sale analysis may be performed in several different ways. If the comparables are sufficiently similar to the subject units, the analysis of sales of multiple units may be used to estimate an appropriate bulk value per unit for the subject. G."OSS retail sellout is the total retail value of all units included in the subject project. This is not an indication of market value, however, unless it is anticipated that all units wiII be sold upon completion, with no deductions necessary for marketing and sales expenses or an extended sellout period. In most cases, the sellout period for the individual units is anticipated to exceed tlle project developinent period, and the gross retail sellout estimate is not considered an indicator of market value. Altair Appraisal Group, Inc. * INCOME APPROACH 2006- 222 Ocean Breeze Townhomes 35 INCOME APPROACH _ PROPOSED 37 UNIT TOWN HOME PROJECT * Inv~stment properties are normally valued in Proportion to their ability to produce income. Therefore, an analysis of the property in tenns of its ability to provide sufficient return on invested capital is an important means of valuing the asset. In the appraisal of a subdivision property such as the subject, a distinction must be made between the gross income produced by sales of the individual subject units and !be present worth of the net sales income, after deduction of selling expenses and discounting for the time necessary to accomplish the sellout. The fonner is known as the "Gross Retail Sellout" while the latter is known as the "Bulk Market Value." Gross Retail Sellout reflcc1s the total dollar value of allllnits in !be inventory as if sold to individual buyers, while the Bulk Market Value reflects the value of the entire inventory to a single purchaser. Discounted Sellout Analysis Bulk market value is the price that a prudent investor would pay for the residential units ifpurchased on a wholesale basis. This value estimate is based upon the assumption that all of the units will be sold (in bulk) at one time to one purchaser, with the specific intent of reselling the units. Bulk market value is essentially the wholesale value of the units. The most common approach to estimating the bulk market value is the fonn of discounted cash flow analysis known as a "Discounted Sellout Analysis." Discounting cash flows to derive an estimate of value at a particular point in time is a well recognized appraisal technique. This tcchnique is particularly helpful in deriving estimate, of !be "hulk" market valne of residemial suhdivisions as of an effective date. The computer model by which bulk market value is estimated utilizes a profit residual technique. The sequence of calculations used to develop the cash flow projections are as follows: I) From market supported pricing and absorption parameters, the model first calculates projections of "Gross Sales Proceeds" and "Expenses" during eacn pcriod of the sellout, based on specific input parameters. 2) Projected "Expenses" are deducted from "Gross Sales Proceeds" resul1ing in esti mates of "N e1 Sales Proceeds Before Entrepreneurial Profit" for each period of the sellout. 3) The model deducts thc required "Entrepreneurial Profit" from "Ne1 Proceeds Before Entrepreneurial Profit", resulting in "Net Proceeds" for the project. 4) The final step is to discount the "Net Proceeds" at a rate sufficient to satisfy the requiremen1s of the lender (mortgage component) and the equity investor. A summation of the "Discounted Net Proceeds" for eacb period rosults in an esti mate of !be hulk market value of the project Given properly Suppnrted market parame1crs, the projections generated hy 1his computer model accurately reflect the timing and quantity of each cash flow during the retail sellout of developed properties similar to the subject. Altair Appraisal Group, Inc. 2006- 222 Ocean Breeze Townhomes Estimate of Retail Unit Value 36 The first step in estimating market value thrnugh a discounted sellout analysis is the estimation of the retai I market values ofthe individual subject units. The indi vidua I retail va I ue 0 fthe su bjeet units can be estimated by comparison with sales of individual units in similar developments within the subject neighborhood. The following pages are individual summaries of the projects compared to the subject property and are considered to be a reasonable representation of the market over all. The average sales prices are based on individual unit sales within the development within the past year. ~ Altair Appraisal Group, Inc. II 2006-222 Comparable Projects Map '. I ~r I' \1 " - ""- - ',\, \ ~ ; \ ~OQ:h P;[llm :. -. '<->'- . J \ --ilB&aCh ". ,-. '. --- -.--r-------;;;,~09A=-r .-n:;~:f\'~~.~~rk,'.... I . Ii ,-_~\__ ~ I p-range .Blvct i Rivie. __aeac~ __ I $inger Islllnd . c--I z~t~ ..~:;;:kldr-.;palm.Beach. I ) W .'- j ";1, Shores "0 t,""i' 702 ~. Ii II . ~! B09_ '-l"--'i~'!n,9on'a Park I €: 'I -. :ri"\F'~ I QI /1 '1- .'. ~1-'lr'" '. /Ii' q: " ) xl. 1_ ( :'-'="1('*-tliB est Palm : i I ! \.A X \ J-'~(~C;h r- '" R~Y~1::~f-J'=~:J;;;\J~:J;,:';' Itt'm 8~," 1:..-.:".....=:--.-.-.' ;=:.':,"'7, '41 =:-- _,: _,__ ...-_.. 'I'!/I ....:\;~.:~..'~ '~'I'I~' I " : r ,f" -r' -'--. ..-~r=~-l;t"'.,-.:::;:.:: _~ 4..-. . , ~-.'i'~~"..\/~., III =Sli.DlmjL~~'!l ~/r- .of!, ( , . " \\ '.. I .... ;S;' ... I i 8~71 (]1 '1, " ','. J ~ IWeIYO!; 'PrpJe(:t.t, .. ":" ',- +i . ;-j):.Jr.'" ViinJ~~~f.'Stiores" " .,' ..' D-t- North.. 0 f.La...O. tana Road off of .... .~P~r. n.p .:~. -7-111 I ~"5 '....:..1'.. ..." I - Haverhlll Road, Greeoacres 5r/,_ ~~.~ ILL.. /Ii.,..,. ... >: L___ f 1)/ 'I"'... """ .'L:"._-'.'.--'.r,"-::--='..:r" "-'.'.1.~' ., B02 ,.-:..-.-. - W4. ak.e.... w.. O..rth -ir--"- '-- I il L J~-'-" '''r;-i . '. !I. r--- --- 809 __.Ir ,,' '.. . ;1 I fiantis t:p, Project 1l il'~----, -$I'I1I14-._-{.1(.__ .fi :'r:t a~l /801 NE 'lth Street, I,i . ~ Farm./ Park 1.II~i 8Y' e alII. Boynton Be. aCh, Fl33'135 'I ant ic I, ' ji" ~. '--'.'.- --.-LJ... ..J~."r~".'i.).' ..~-.:f:H'.~O.'UXO 0 c e a n FLOf!'OA . ~ .:1 ~I Ii ..'--' I /.. . ' -:J, 'j'"" lj . a i .. .'...../...,c..--J.-...:I.___ , I T1 .J.. ! Project 3 1: fiN ,.... . 4. '1000 South Congress Ave, .ti""':"'Dil~jOCean RIdge ,Boynton Beach, Fl33435 i [ i,~\'vnto~'Beach PAL Ii 792 J I. . Arthur R Marsh~1I JI i /'/1... -'j-,"-:;f! SUBJEct, LoxCihalc/;ee N:W.R. * ( ~; 700 N Seacrest Blvd The . /: T!i ~ 4-/r' .Boynton B~ach, FL 33435 E J '" ii 0::"0/1 I/,'.._,,_)r ['r,f' '. velglau~s.. ... ,: .. I ' I --'Q.e1rfay Beach . Project,! ';, .~ '_.~JL._",-,~,,!. ..,..Ef,'-'--i": .' . Jog Road & Flavor P/ct Road, ~L.. ." - "Ii"-'- 8~7 l:liA fA.' .' , Boynton Beach, FL 33435 .f' . !. '--r!~.J.. ,.::. '. . ". ' ' . ~Ir- 782 T~'it'r' '.' . , '''''''Qji'''''''''..... """'''4--1. . 81:9 . ..;)p.ti'.'..t..:..19.....hl'.a.hcl.i:';.'. . Ii . . ji.. ,. j'/):/ t.Be.~~h 11-- -r.. ~.c--~~. -~Ul1l_~9.QL.(. , I j /II :' ( . . :,..:. . . .', .)1 I '1./{: Parks and Recr"al',on'1-~- '- . -'-----t':~. 9-4 ""ri,' ".1' r' I 'T" , , -'4tJ BOO "i. 1 ". \'1 I 'I I ,/ Ii 11 I.. ' { I" .., 1/ i " --....i..ii... 80B ~- ""~=-""'?l."""'-'=' "-''''-. ;'1,:. / L. \ 11 j" .(' . -, --"""i~c~'.~~ton ',-. 7gB .~.. 441 .--'.. -11---'1'--: '--9f~. T.. ..... ... ,.... . :/ I'; i......-4ktParksand . '. '- ir~' 845 _.J..~ .L... 'r' :iB~cr~aii,on parklan~- !~~ ~10 :~--.J.lC'=_~' ~'r :~t~--~1flI;1'.'. ~~~,e~ .cili.- .- /-. I . 1/". -- - \ ..~- .... J/ ..~"". '",' ," Jr" , 8~9' , - ' '-:-1;9;1~l1Ie i -. -il A'1A". . ) a'R O.)W'f'. R D I ~ If:' lr B_'.I..-!/1 .., . I, ----1'-i!=O~17--II--~~ II.' . . '! ~tr.an4 Seaeh Hlgh'ana~. . i - - '--G:!~J?,?~~, ~34 '~--'=~{i= "''''I-~ 'rl'~rLight/Jouse. i r I: f Ii ,ll> :..1: ,,' i! I: Point . . Copyright C1J 19&B'2005 !I1icrosoN Co,P. and/m ils suppliel1l. All righls 'eserved. hllP:IIwww.microsotl.eom/streats/ C1J 2004 NAVTEQ. AlI,ighls 'eserved. This dala includes iotormallon laken with permiSSIon Irom Caoad,ao aUlhorilies C1J Har Majesty Iha Queao '0 Roght of Caoada. C1J COPyright 2004 by Te-feAlla's North America. Inc. An righls reserved. f' Omi 2 4 6 B 10 12 2006- 222 Ocean Breeze Townhomes 38 COMPARABLE PROJECT NO.1 II Name: Green Cay Village Location. Jog Road & Flavor Pict Road, Boynton Beach, FL Project Information: Building Type: Unit Types: Typical Unit Size: Year Built: Project Condition Maintenance Fee Condominiums and Townhome Project 2/2 and 3/2 995-1,395square feet 2005 N ew/Excellent $263-$323 per month Facilities/Amenities: Nice landscaping, community pool, water views, clubhouse, gym Unit Pricing: U nit Type 2/2 3/2 TH lCG 3/2 Flat 1 CG A vg Sales Price $198,900 $292,000 $312,000 A vg.Size/SF. 955 1,395 1,302 $/SF $208.27 $209.32 $239.63 Comments: This is a 420 unit condominium development located in the City of Boynton Beach. The project is newly constmcted and considered to be in excellent condition, The units have 2-3 bedrooms and 2 bathrooms. The 3 bedroom units have ] car garages. The property has many amenities. The floor plans are functional and room sizes are typical of the area. . . Altair Appraisal Group, Inc, 2006- 222 Ocean Breeze Townhomes 39 COMPARABLE PROJECT NO.2 ~ Name: Verona Palms Location: North of Lantana Road of Haverhill Road, Greenacres, FL Project Information: Building Type: Unit Types; Typical Unit Size: Year Built: Project Condition Maintenance Fee Townhome Project 3/2.5 1,782-1,791 square feet 2006 New/Excellent $168.34-$173.08 Facilities/Amenities: Nice landscaping, community pool Unit Pricing: Unit Type A vg Price 3/2.5 TH 2CG $299,990 3/2.5 TH 2CG $309,990 Avg. Size 1,782 1,791 $/SF $] 68.34 $173.08 Comments: This is a 134 unit condominium development located in the City of Green acres. This is a newly constructed condominium project. The units have 3 bedrooms and 2.5 bathrooms. All of the units have 2 car garages. The floor plans are functional and room sizes are typical of the area. F F Altair Appraisal Group, Inc, 2006- 222 Ocean Breeze Townhomes 40 COMPARABLE PROJECT NO.3 II Name: Monterey Townhomes Location: 4000 S. Congress Ave, Boynton Beach, FL Project Information: Building Type: Unit Types: Typical Unit Size: Year Built: Project Condition Maintenance Fee Townhome Project 2./2.5, 3/2.5, & 3/3 1,436-1 ,536quare feet 2005-2006 New/Excellent $236(proposed) Facilities/Am enities: Well landscaped, community pool, nature trails, lake Unit PI"icing: Unit Type 2/2.5 3/2.5 3/3 A vg Sales Price $300,990 $285,990 $300,990 A vg. Size/SF. 1,436 1,536 1,527 $/SF $209.60 $186. I 9 $197, I I Comments: This is a larger condominium development located in the City of Boynton Beach. The property is in the final stages of construction and is considered to be in excellent condition. The units have 2 or 3 bedrooms and 2.5 to 3 bathrooms. The property has good amenities. The floor plans are functional and room sizes are typical of the area, Altair Appraisal Group. Inc. 2006- 222 Ocean Breeze Townhomes II Name: Location: Project Information: Building Type: Unit Types: Typical Unit She: Year Built: Project Condition Maintenance Fee Facilities/Amenities: Unit Pricing: Comments: 41 COMPARABLE PROJECT NO.4 The Preserve at Boynton Beach 180 I Northeast 41h street, Boynton Beach, FL Two story condominium project 2/2 & 3/3 1 ,071-1 ,60 1 square feet 2006 New/Excellent $225 per month Swimming pool, pool side cabanas, tot,lot, and clubhouse Unit Type A vg Sales Price 2/2 $289,990 2/2+Den $349,990 312.5 TH 1 CG$349,990 3/2.5 TH 1 CG $359,990 A vg. Size/SF. 1,071 1,561 1,557 1,60] $/SF $270.77 $224,2 1 $224.73 $224.85 This is a condo development located in the City of Boynton Beadl. The property is in the final stages of completion and is considered to be in excellent condition. The units have 2-3 bedrooms and 2 to 2.5 bathrooms. The units have 1 car garages. Each unit is sold with a one car garage. The floor plans are functional and room sizes are typical oflhe area. Altair Appraisal Group. Inc. 2006- 222 Ocean Breeze Townhomes 42 BASE UNIT BASE PRICING As previously discussed, the base pricing and estimated gross sales prices for the subject units are based upon the sales prices of other similar units within the subject market area. All of the comparable projects offered similar size condo units and would generally be considered as alternatives to the subject by potential purchasers. The comparable properties are summarized below. If Proposed Pricin2 Comparison for 3bedtoom units Compo Unit Type Average A verage Unit Average $/Unit Size SF SFlUnit I 3/2 TH, 1 CG $292,000 1,395 $209.32 3/2 Flat, I CG $312,000 1,302 $239.63 2 3/2.5 TH, 2 CG $299,990 1,782 $168.34 3/2.5 TH, 2 CG $309,990 1,791 $173.08 3 3/2.5 TH Inside $285,990 1,536 $186.19 3/3 TH Comer $300,990 1,527 $197.11 4 3/2.5 TH, I CG $349,990 1,557 $224.73 3.25 TH, 1 CG $359,990 1,601 $224.85 Average $313,867 1,561 $202.78 The comparable projects are newer town home projects similar to the subject property. The three bedroom units range in size [rom 1,302 to 1,791 square feet and arc ~elling from $292,000 to $359,990 or $168.34 to $239.63 per square foot. . The comparable projects have been built between 2004 and 2006. Comparables one and four are larger developments with more amenities such as clubhouses, gyms and lake and are selling for the highest prices per square foot. Comparable projects one, three and four are all located within the Boynton Beach area. Comparable two has a slightly inferior location in Greenacres and is selling for the lowest unit value of $168.34 per square foot. Based on the subject project's location, amenities and types of units offered, the market value of the subject units is estimated in the mid to upper portions of the range per square foot. The subject three bedroom town home units contain approximately 1,400 square feet and have I car garages. We estimate an average sales price of $200.00 per square foot or $280,000 for the subject town home units. Developers ofprojects such as the subject generally apply periodic price increases during the course of a sales program. However, this is a small project that will sell out quickly and no increases are necessary. Gross Sale Proceeds: Based upon the concluded retail unit values, the gross sale proceeds for the subject property is estimated at $10,360,000 or $280,000 per unit. . . Altair Appraisal Group, Inc, 2006- 222 Ocean Breeze Townhomes 43 Absorption Period: In order to estimate an absorption period for the subject units, we surveyed projects within the subject area. The developments considered for the absorption analysis are shown on the fol/owing chart. ~ , Cmnp,,'''" I Absorption ComparabJes ] I I NameILocation # ofUnils A vg, Sales Price A vg Monthly Absorption 1 Green Cay Village 360 $1 9S,,900-$3 12,000 20.00 Boynton Beach 2 Verona Palms 134 $299,990.$309,990 6,00 Greenacres 3 Monterey 300 $285,990-$300,990 5,38 Townhomes Boynton Beach 4 The Preserve 180 $289,990.$359,990 5,00 Bovnton Beach All of the comparables are town home or condominium projects. They are located in Boynton Beach and Greenacres. The average sales prices are similar to that projected for the subject units. These properties have indicated average monthly absorption rates of 5.00 to 20 units per month. The subject property is located in an area with few competing projects. The subject units are three bedroom units that will be reasonably priced. Smaller projects tend to sell slightly slower than larger projects. An average monthly absorption rate of5 units per month is estimated for the subject. Due to the number of units, the cash flow analysis will be on a monthly basis with an average absorption of 5 units per monthly period. Ptesales: The subject will be new construction and we estimate the construction period to be approximately one year. During this time the property will be marketed and we have estimated that approximately 20 pre-sales would be reasonable and would close in the first sales period (approximately 1 year). Expenses Incurred During Sellout: Estimated expenses associated with selling out the subject units are based on current marketing costs in the local market, as well as historical expenses in similar developments. The expenses associated with the retail sale ofthe subject units are estimated as follows: I, Sales Expense associated with the seIJing of the units are estimated to be 3.0% of the gross sales proceeds. This expense is directly related to sale activity and as such is calculated as a percent of the gross sales proceeds for the period. The 3.0% is a typical average for in-house and co-brokers sales, 2. Marketinll Expense for marketing the units is estimated at .5% of the gross sales proceeds. This expense is above what is typical of residential developments, however conversion developments similar to the subject require an extensive initial advertising program. . . Altair Appraisal Group, Inc. 2006- 222 Ocean Breeze Townhomes 44 3. General Administrative in selling the units is estimated at 5.0% of the gross sales proceeds. The total amOunt of this expense is calculated as a percent of the total gross sales proceeds for the individual units. This expense is considered to be level throughout the sellout period. 4. . Closing EXDense associated with the seIling of the units is estimated to be .5% of the gross sales proceeds. This expense is also directly related to sale activity and as such is calculated as a percent of the gross sales proceeds for the period. 5. Maintenance and Utilities is associated with the maintenance of the common area amenities, model units, and renovated end units prior to closing. These costs wer~ estimated at 0.25% of the gross retail value of the unsold units remaining in the inventory. 6. Real Estate Taxes levied on the units while in inventory - Based on accruals and prorations at the time each unit is sold, and on lump-sum payments billed at the end of each tax year for unsold units in inventory. The taxes are estimated based on the current taxes for the land and are estimated at $450 per unit per month as planned. Sellout periods may not coincide with tax year periods. II 7, Initial Advertising and Sales Office Stalt Up Expenses These expenses are associated with marketing material design, advertising, and sales office startup, and also include the cost to dccorate the model units, We have estimated these expenses at $ I 5,000 for the subject property. Entrepreneurial Profit: We have deducted a line item of profit to reflect the incentive necessary for the entrepreneur to undertake the sellout of a project such as the subject property, Entrepreneurial profit typically ranges from 5% to 20% depending upon the magnitude ofthe project involved, the length of the sellout period and the level of perceived risk. Because the units are already built and there is little competition for the subject units, the risk is relatively low. The margin of profit allocated to the units only for the undel1aking of the sellout has been estimated at the middle of the range, or 10.0% of the gross sales proceeds. Discount Rate Derivation: The final step in the process is to discount the net proceeds from the sellout of the subject units. Realty Rates,c01l1'S Developer Survey indicates discount rates of between 11.75% to 24.60% with an average of 17.45% for suburban condos. The subject property is a new townhome project with affordable priced units and there is little risk associated with a project of this type. Therefore, we have utilized a discount rate of 12.00% based on this information. Discounted Sellout: Based upon the retail market values and absorption rates projected, the preceding mortgage/equity parameters, and estimated sales expenses, the discounted sellout analysis yields a bulk value indication rounded to $8,200,000. The results of our Discounted Sellout Analysis are included in the following pages. Value Indication via Income Approach Based on the foregoing data and analysis and the Discounted Sellout Analysis, we conclude that the indicated market value o[the subject property, in bulk to a single buyer, by the income approach is $8,200.000. Altair Appraisal Group, Inc. ;;; '0 1- ~ "'" o ~ Nf\I"""OON M .. g r "'''' i <;> ;! 8 II> N ., " di c: ft)'C'l...... 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IS o 0- o '" o o CD ",' M '" ",' .. v; ... ~ 8 o ~ @ '" 'D .. .. u o 0': .. ;; III 0; Z ~ 2 u .. u. ;: ::J o U '" i5 <= e a. o ~ ",' M M CD' g "! .;:; v ... o '" M ",' :::' ID '" N o CD '" c:i '" gJ o 81 o o o o o o o ~ ,0 C; o N .. 'D .. OJ u o .t II> Z 'D ., ;: ::J o U III a '" '" v ",' ~ CD' ... o ~ o '" '" o .,. 0> "' "; M " '" '" .,. rti o N CD' .. .., o 01 :g '" '" o "' 0> v' '" 0. " co """1 '" ..... ....' '" <0 '" '" 0' g ~. ID .... '" 0' CD '0 <ci .., ... IS o 0' CD '" ",' g 0' ~I "', toO WO('J;;e. lOOf'lll") "TOwU') CO'o".--cc ClONe NC\j~,... fZ'J- co' '" 10") lAU')(;I") .. 'D III III U o .t ., z .; ... a II> ,;: ;,; :; E :> o ,." c: ::J I J I i ~~ &a:!~ .~ ~.~.~ 1:Jo"C-a ':~Et:: ~ COST APPROACH 2006- 222 Ocean Breeze Townhomes 47 COST APPROACH The premise of the Cost Analysis is that a typically informed purchaser would pay no more for the property being appraised than the cost of producing a substitute property with the same utility. Although most applicable as an indicator of market value when the property being appraised involves relatively new improvements representing the highest and best use of the land, this method generally is less applicable for older properties since the likelihood of encountering physical, functional and/or locational value loss tends to increase with property age, The greater the incidence of such loss factors, the less reliable the final value approach inqication since quite often these loss factors cannot be finitely measured, ~ The general methodology of the Cost Analysis in the appraisal procedure involves the division of the property being appraised into basic elements of land and improvements. The steps in this methodology are: I, Estimate the value of the site as vacant and ready for improvements. 2. Estimate the current cost to replace the improvements, considering entrepreneurial profit. 3. Estimate the dollar amount of accrued depreciation attributable to the following: a. Physical deterioration b. Functional obsolescence c. Locational (Economic) obsolescence 4. Deduct the total amount of accrued depreciation from the current replacement cost to derive the present depreciated cost of the improvements. 5. Derive an indication of value for the property by adding the land value estimate and the estimate of the depreciation cost of the improvements. Scope of Land Sales Search The value of the site is estimated based on sales of comparable vacant residential properties located within the subject area. Four comparable sales were found and analyzed. Altair Appraisal Group, Inc, 2006. 222 Ocean Breeze Townhomcs 48 LAND SALES SUMMARY CHART Subject Sale 1 Sale 2 Sale 3 Sale 4 Location Ocean Breeze Pineapple Grove Colony Palms Waterbrook Habor Cay Seacrest Blvd. Gulfstream Blvd. Atlantic Avenue 2649 N Lakeside Federal H",'J Harbor Drive City Boynton Beach Boynton Beach Delray Beach>. Boynton Bch Boynton Bch j l' ' Sale Date N/A ] 2/2/05 4/20/05 9/] 9/05 ] 1/2]/05 II Sale Price N/A $9,000,000 $5,316,666 $7,000,000 $3,107,000 , Zoning Multi-family Multi-family Multi-family Multi-family Multi-family OR Book 197] 1/986 18485/]2] I 9284/l 042 ] 9635/1 363 Seller N/A Pineapple Grove Be Properties William Anand Patel, Properties, Ltd. & Investments Smith Trust LLC LLC Buyel" N/A New Century Colony Palm Waterbrook Harbor Cay, Boynton One Development Peninsula LLC Development Co, LLC LLC Land Size-AC 4.39/3.44 8.60 5.00 3.51 1.44 Site Plan Y cs/No Seller Scller .SeHer Seller Planned Units 37 82 45 70 23 Price/Unit N/A $] 09,756 $118,148 $100,000 Adjustments si~9/, ((9 ~ Market Current Similar Inferior t Conditions Condo of Sale Normal Similar Similar Similar Similar Financing Conv. Similar Similar Similar Similar Location Average Similar Superior Superior Superior Zoning Mu]ti-family Similar Similar Similar Similar Density 10.8 du/ac Similar Similar Superior Superior Utility Average Similar Similar Similar Similar Size 4.39/3.44 Similar Similar Similar Inferior Overall N/A Similar Superior Similar Superior Comparison Altair Appraisal Group, Jne, 2006- 222 Ocean Breeze Townhomes 49 DISCUSSION OF ADJUSTMENTS Property Rights All of the sale properties were fee simple transfers, No adjustments were required. Market Conditions Sale three was under contract for longer than typical, is considered inferior and an upward adjustment is considered. All of the other sales are fairly recent transactions and require no adjustments. 4 Conditions of Sale The conditions of sale were verified to be an arm's length in nature and no adjustments were warranted. Financing Financing was analyzed for each of the comparables. All of the comparables were either purchased with cash or financed through market related instmments, with none of the eomparables requiring an adjustment for financing. Location The subject property is considered to have an average location. Sale one is located in an area similar to the subject and no adjustment is considered. Sales two, three and four nave superior locations and downward adjustments are considered. Zoning The sales are all zoned for multi family development and are similar to the subject and no adjustments are made. Density Sales one and two are being improved with projects that have actual densities most similar to the subject property and no adjustments are made for this factor. Sales three and four have higher densities that are considered superior and downward adjustments are made to these sales. Utili(v The comparable sales are considered generally similar to the subject and no adjustments are made. AltaIr Appraisal Group, Inc. 2006- 222 Ocean Breeze Townhomes Size 50 Sale four is smaller than typical for a residential project of this type, is considered inferior to the subjvct and an upward adjustments is considered. The remaining sales are considered generally similar to the subject and no adjustments arc needed.. Value per Unit Conclusion ~ The sales considered are the most similar of the sales found; and are considered to be reliable indications of market value for the subject. The per unit sal~s prices ranged from $100,000 to $ I 35,087. All of these comparables sold with the site plans completed by the sellers. Sales one and three are considered the most similar to the subject and indicate a range of $100,000 to $ 109,756 per planned unit. We are estimating the market value of the subject property at $ I 00,000 per planned unit. This is extended as follows. The western parcel has site plan approval for the proposed 37 unit town home project. According to the property owner, Mr. Larry Finkelstein, the site plan approval process took approximately six months and cost approximately $200,000 for the proposed 37-unit project. Eastern parcel (47 possible UJ~its) @ $100,000 per acre = $4,700,000 less cost for site plan process - $200,000 =$4,500,000* Western parcel (37 possible units) @ $100,000 per acre = $3,700,000 *Based on infOlmation from developers of the comparable projects, the cost for approvals have been ranging 1'i'om $100,000 to $200,000 for smaller multi-family projects. Lynn Riley, Project Manager with Land Design South, indicated that this is well within the range for a project of this type. A typical time fi'ame for this process would be between six and twelve months. Therefore, we will discount the value of the eastern parcel by $200,000 for the cost to complete this process. The final value for the eastern parcel is $4,500,000. Altair Appraisal Group, Inc, . REPLACEMENT COST NEW 2006- 222 Ocean Breeze Townhomes 52 REPLACEMENT COST NEW FOR PROPOSED 37 UNIT PROJECT Contractor's Cost Estimates Based on the information provided, the construction costs have been provided as about $4,822,048 or $93.16 per square foot. This includes architect fees and other soft costs, Marshall Valuation Service Cost Estimate The replacement cost new of the improvements is based on the Marshall Valuation Cost Handbook. The subject is considered comparable with a Good Class "C" Residential Building with a base cost of $73 per square foot. It The base cost is adjusted by current cost and local multipliers to bring the final square foot cost to a current applicable figure. Appliance package cost was added to the total. Site Improvements The contributory value of the site improvements was derived from estimates provided by the property owner. Site work/sewer for this parcel is estimated to be $537,500. Landscaping, irrigation and grading site is estimated to be $92,500. Permits are estimated to be $9,480 and another $50,000 is for contingency items. The total for site improvements is $689,480. . . Altair Appraisal Group, Inc, 2006- 222 Ocean Breeze Townhomes 53 II Replacement Cost New AnaJ}'sis Building Type Residential Building Building Quality Good Building Class "C." Exterior Wall CBS Gross Bldg. Area 51,763 Year Built 2006 Section/Page 12/14 Base Cost Per SF $73 Appliance Package $2.50 Sub Total $75.50 Ceiling Height Multiplier J,OOO Current Cost Multiplier Aug. 04 1.04 Local Cost Multiplier Boynton Beach 0,91 Current Refined Cost $71.45 Gross Building Area 5 L 763 Subtotal Building Cost $3,698,466 Garages 8,917 SF @ $50.00/SF $446,000 Total Building Cost $4,144,466 Plus: Site Improvements $689,480 Total Building & Site Improvement Cost $4,833,946 Rounded to $4,835,000 The two methods of reproduction cost new indicated the fOllowing: Reconciliation of Reproduction Cost New, Contractor's Cost Estimate Marshall Valuation Service $4,822,048 $4,835,000 Both estimates support each other and based on the two methods the reproduction cost new of the subject property is estimated and reconciled at $4,825,000. Entrepreneurial Profit Entrepreneurial profit is included in the cost approach as payment for a necessary economic factor of production and represents the threshold amount of compensation that a prudent entrepreneur would require in order to make it worthwhile to go to the effort of bringing the project into being. Entrepreneurial profit is based on the amount in excess of hard and soft acquisition and development costs that a prudent developer would require. Based on interviews with local developers, an entrepreneurial profit of 10.0 to 15.0 percent is typically considered for a project. An entrepreneurial profit of 10,0 percent is estimated for the subject considering it is a small multi tenant residential project. Altair Appraisal Group, Inc, Dep,'eciation 2006- 222 Ocean Breeze Townhomes 54 Depreciation is a loss in value from replacement cost new. It must be separately estimated and then subtracted fi'om the reproduction or replacement cost new. There is depreciation in the subject property in the form of physical deterioration and external obsolcscence. Physical Deterioration Curable: None. Incurable: The subject improvements are proposed and have no effective age ~ Functional Obsolescence Curable: None. Incurable: None. External Obsolescence Curable: None. Incurable: None. Cost Approach Summary Replacement Cost New of Bldg. & Site Improvements Plus: Entrepreneurial Profit @ 10.00% Replacement Cost New of Building Improvements $4,825,000 $ 482.500 $5,307,500 Less: Accrued Depreciation Physical Deterioration - 0,00% Functional Obsolescence External Obsolescence Total Accrued Depreciation Depreciated Value of Bldg. & Site Imp. $0 $0 $Q ($Q) Plus: Land Value Total Value of Subject "As Is" Rounded to: $5,307,500 $3,700.000 $9,007,500 $9,000,000 Altair Appraisal Group, lnc, ~ RECONCILIA TION & FINAL VALUE ESTIMATE 2006- 222 Ocean Breeze Townhomes 56 RECONCILIA nON & FINAL VALUE ESTIMA TE The purpose of this appraisal was to estimate the market value of the fee simple interest in the subject property "as is" or land value as of the effective date of this appraisal and the value "as completed" with an estimated date of completion of August I, 2007. In estimating the as is fee simple market value only the land value estimate from the cost approach is used, For the as completed value, two of the three traditional approaches to value were applied, which yielded respective value indications as follows: As Is Value (Land Only) ~ Eastern Parcel (4.39 acres) /}J) kl 5 S' $4,500,000 11 I J OJ. 10 $3,700,000 (\ I 01(, ~ ~/ Western Parcel (3.44 acres) As Completed Value for 37-unit Town Home Project Income Approach $8,200,000 Cost Approach $9,000,000 The close range of value estimates provided by the two approaches applied in thc valuation provide additional credence to each of the approaches as well as the final value estimate. As a result of Our investigation into those matters which affect market value, and by virtue of our experience and training, we have fonned the opinion that the market value of the fee simple interest in the subject property, "As Is", vacant land, effective as of July 4, 200~, was: Eastern Parcel - $4,500,000 Western Parcel - $3,700,000 Additionally, as a result of onr invcstigation into those matters which affect market valne, and by virtue of our experience and training, we have formed the opinion that the market value of the fee simple interest in the subject property, as iffully developed as a town home development in bulk to a single purchaser, effective as of July 4, 2006, but projecting for a completion date of August I, 2007 was: EIGHT MILLION FIVE HUNDRED THOUSAND DOLLARS ($8,500,000) S \.l t ~ \\O~~] Altair Appraisal Group, Inc, II ADDENDA II HIGHEST AND BEST USE . . 2006- 222 Occan Breeze Townhomcs 29 HIGHEST AND BEST USE ANALYSIS In order to estimate the highest and best use of the subject property, we have considered those uses whic.h are legally pemlissible, physically possible, economically feasible and which would result in the highest return to the land. Consideration must be given to the site characteristics such as size, shape, location, access to roadways, availability of utilities and public services and surrounding land uses. An analysis of the highest and best use of any propcrty invo.lves two separate studies: (I) an analysis of the site "as if vacant" and (2) an analysis of the subject property "as improved." ~ We have considered the criteria for highest and best use and have concluded in the opinion that the highest best use for the subject property "as if vacant" is for a moderate to high density residential development such as a town home, condominium or apartment project. The highest and bcst use is considered to be consistent with the proposed property, Our estimate of the highest and best use of the subject site was based on the following legal, physical and economic considerations. "As If Vacant" Legally Permissible: The subject property is zoned and available for multi-family rcsidential use. Property development regulations are relatively liberal and would not unduly hinder or restrict development of the site, The subject appears adequate to be developed in confonnance to zoning. Based upon consideration of surrounding development and land lIses, we are of the opinion that there is little probability of a land use change at the subject site. After reviewing the legal constraints placed upon the subject site, we are of the opinion that a medium to high density residential development is legally permissible. . Physically Possible: The subject property has frontage on a busy north/south roadway with a total area of 7.83 acres. The substantial development of surrounding parcels provide evidence that the soil conditions are adequate to support physical development. The size, configuration and topography of the subject parcels appears conducive to physical development. Primary access to the subject property is from Seacrest Boulevard which is a busy north/south artery in this neighborhood. This is considered to be similar to that of other properties in the immediate vicinity and good for a property of this type. Access into and through the neighborhood, as well as to the subject site is adequate. The subject property is served by all necessary public utilities including water and sewer, electricity and telephone, and police and fire protection in adequate capacity to support development on the subject. . . Altair Appraisal Group, Inc, 2006- 222 Ocean Breeze Townhomes 30 Economically Feasible: The subject property is located in a residential area just north of Boynton Beach Boulevard along Scacrest Boulevard, This area has a majority of residential uses with commercial zoning along the major traffic arteries. The surrounding uses include churches, rental apaJ1ment complexes and single family residential uses. There are several new condominium and townhouse projects being constructed in the City of Boynton Beach with units selling from the high $200,000s to over $600,000. Many of the newer projects are condominiums. The development of the property as an attached town home project provides for a good return on the land. II Conclusion: In conclusion, after reviewing the legal, physical and economic factors, we are of the opinion that the highest and best use of the subject site, "as if vacant," is for moderate to high density residential use, most likely a town home or condominium development. "As Improved" Legally Permissible: The subject property is zoned and available for multi-family residential use. Property development regulations are relatively liberal and would not unduly hinder or restrict development of the site. The subject appears adequate to be developed in conformance to zoning. Based upon consideration of surrounding development and land uses, we are of the opinion that there is little probability of a land use change at the subject site. After reviewing the legal constraints placed upon the subject site, we are of the opinion that a medium to high density residential development such as the proposed 37-unit attached town home project is legally pennissible. The proposed project has received sit plan approval from the City of Boynton Beach. Physically Possible: The subject property has frontage on a busy north/south roadway with a total area of 7.83 acres. The substantial development of surrounding parcels provide evidence that the soil conditions are adequate to support physical development. The size, configuration and topography of the subject parcels appears conducive to physical development. Primary access to the subject property is from Seacrest Boulevard which is a busy north/south artery in this neighborhood, This is considered to be similar to that of othcr properties in the immediate vicinity and good for a property oftJ]is type. Access into and through the neighborhood, as well as to the subject site is adequate. The subject property is served by all necessary public utilities including water and sewer, electricity and telephone, and police and fire protection in adequate capacity to support the proposed development on the subject. Economically Feasible: The subject property is located in a residential area just north of Boynton Beach Boulevard along Seacrest Boulevard. This area has a majority of residential uses with commercial zoning along the major traffic arteries. The surrounding uses include churches, rental apartment complexes and single family residential uses. There are several new condominium and townhouse projects being constructed in the City of Boynton Beach with units selling from the high $200,000s to over $600,000. Many of the newer projects are condominiums. The proposed development of the property as an attached town home project provides for a good return on the land. r r Altair Appraisal Group, Inc. 2006- 222 Ocean Breeze Townhomes 31 Conclusion: In conclusion, after reviewing the legal, physical and economic factors, we are of the opinion that the highest and best use of the subject site, "as improved," is for moderate to high density residential use, most likely a town home or condominium development similar to the proppsed 37-unit town home project. ~ r , Altair Appraisal Group, Inc, " DISCUSSION OF VALUE . . 2006- 222 Ocean Breeze Townhomes 33 APPRAISAL PROCESS There are three traditional approaches nonnally used by appraisers in the estimation of market value. The~e three approaches provide data from three market perspectives. These three techniques are the cost approach, the sales comparison approach and the income approach. ~ The cost approach is based on the premise that an informed, rational investor/purchaser would pay no more for an existing property than it would cost him to reproduce a substitute property with the same utility without undue delay. The cost approach analyzes t~e components of raw land added to the combined improvement costs. Improvement costs include both direct and indirect construction charges. When all development costs have been identified and estimated, including site value, an appropriate allowance for developer's profit is added. The cost approach is generally only applicable if the subject subdivision or project is new or proposed, or if the majority of the units have not yet been sold. The subject property is a proposed 37- unit attached town home project, the cost approach is applied in the valuation of the subject property. The income approach is based on the premise that a prudent investor would pay no more for the subject property than he would for another investment with similar risk and retum characteristics, Since the value of an investment can be considered equal to the present worth of anticipated future benefits in the fonn of dollar income or amenities, this approach estimates the present value of the net income that the property is capable of producing, In the case of a subdivision or condom in ium development, the income approach is employed via the "Discounted Sellout Analysis." The discounted sellout analysis is actually a hybrid method which combines key elements of the sales comparison approach with the income approach. The individual subject units are valued by comparison to other competing developments which is a procedure used within the sales comparison approach. However, a terminal income approach is used to estimate expenses involved with selling out the units over time. Net sales proceeds are then discounted to a ptesent worth estimate. The discounted sellout analysis is the basic valuation procedure for a subdivision or condominium apartment development having a tenninal cash flow. The underlying rationale behind this approach is that the value of a project under a market value concept is equivalent to the present worth offuture benefits accruing to ownership over a projected holding period. The sales comparison approach relative to a subdivision is employed through an analysis of "bulk" sales of units. A bulk sale analysis may be performed in several different ways. If the comparables are sufficiently similar to the subject units, the analysis of sales of multiple units may be used to estimate an appropriate bulk value per unit for the subject. G."OSS retail sellout is the total retail value of all units included in the subject project. This is not an indication of market value, however, unless it is anticipated that aI/ units will be sold upon completion, with no deductions necessary for marketing and sales expenses or an extended sellout period. In most cases, the sellout period for the individual units is anticipated to exceed the project development period, and the gross retail sellout estimate is not considered an indicator of market value. Altair AppraIsal Group, Inc. 10 INCOME APPROACH r r 2006- 222 Ocean Breeze Townhomes 35 INCOME APPROACH _ PROPOSED 37 UNIT TOWN HOME PROJECT " Inve:strnent properties are nonnally valued in proportion to their ability to produce income. Therefore, an analysis of the property in terms of its ability to provide sufficient return on invested capital is an important means of valuing the asset. In the appraisal of a subdivision property such as the subject, a distinction must be made between the gross income produced by sales of the individual subject units and the present worth of the net sales income, after deduction of selling expenses and discounting for the time necessary to accomplish the sellout. The former is known as the "Gross Retail Sellout" while the latter is known as the "Bulk Market Value." Gross Retail Sellout reflects the total dollar value of all units in the inventory as if sold to individual buyers, while the Bulk Market Value reflects the value of the entire inventory to a single purchaser. Discounted Sellout Analysis Bulk market value is the price that a prudent investor would pay for the residential units ifpurchased on a wholesale basis. This value estimate is based upon the assumption that al] of the units will be sold (in bulk) at one time to one purchaser, with the specific intent of reselling the units. Bulk market value is essentially the wholesale value of the units. The most common approach to estimating the bulk market value is the form of discounted cash flow analysis known as a "DiScounted Sellout AnalYsis." Discounting cash flows to derive an estimate of value at a particular point in time is a well recognized appraisal technique. This technique is particularly helpful in deriving estimates of the "bulk" market value of residential subdivisions as of an effective date. The computer model by which bulk market value is estimated utilizes a profit residual technique. The sequence of calculations used to develop the cash flow projections are as follows: I) From market supported pricing and absorption parameters, the model first calculates projections of "Gross Sales Proceeds" and "Expenses" during eacli'period of the sellout, based on specific input parameters. 2) Projected "Expenses" are deducted from "Gross Sales Proceeds" resulting in estimates of "Net Sales Proceeds Before Entrepreneurial Profit" for each period of the sellout. 3) The model deducts the required "Entrepreneurial Profit" from "Net Proceeds Before Entrepreneurial Profit", resuhing in "Net Proceeds" for the project. 4) The final step is to discount the "Net Proceeds" at a rate sufficient to satisfy the requirements of the lender (mortgage component) and the equity investor. A summation of the "Discounted Net Proceeds" for each period results in an estimate of the bulk market value of the project. Given properly supported market parameters, the projections generated by this computer model accurately reflect the timing and quantity of each cash flow during the retail sellout of developed properties similar to the subject. Altair Appraisal Group, lnc, 2006- 222 Ocean Breeze Townhomes Estimate oJ Retail Unit Value 36 The first step in estimating market value through a discounted sellout analysis is the estimation of the retail market values of the individual subject units. The individual retail value of the subject units can be estimated by comparison with sales of individual units in similar developments within the subject neighborhood. The fOllowing pages are individual summaries of the projects compared to the Subject property and are considered to be a reasonable representation ofthe market over all. The average sales prices are based on individual unit sales within the development within tlle past year. ~ Altair Appraisal Group, Inc, 2006-222 Comparable Projects Map ".":"". I, I/III~' \1,:. ~i 1\!9l\'tP~.lm., ./, "" .'-, HI , \ -~'IBea<m":',':.'-' .--...-'''T--'-- .:.;;. -'-.S09A I " Il'",.,..\,. '...' i ,.";;~o =]" '~7~~~:('\ke'Pi4*." "",goOl" L, ~tl'j~ ~~;~~~-,h"".'" ! zlp~rt" - Ja/6i,JJ\dh.... ..pa.,.Fl1Be.aCh, I I ~ ,~~,- I ";1" Shores, ~h.'''\, 702 ~;::~ III! .. .. . . -' B09_ '"I. '--,\~an,9onla Park ' I :e Ii" ~r-rl\r~-. . I :g ~r'lh " , i~r :7: : ) . ~ If'- 1- I ~\='1{'*-tl(' est Palm iii, ~".) \ J-'I ~qh r- 704 'R;y'8,' Palmf- '-J- 7 -- - '----,\' a::'r~[~; It,~. :':l"1~t.7:41IA lif--:ra1m 8ea.ch J Beachl - r'- .- ~t""'-"\""';-::'_;t. " I ::':""""-='--=';'::::,,:;:c:: 441 :=, -_:, "-'- .. '_ ,Ii ",:\'i'::':;:"..) )','I}\" f' '. : L'" -11"....- -,- --''"}r==-r-f'':C:':;::' i'-: 9 ':' 1 - - -, ,,/\ 11 . ~mmlj~d ~JI_'_ " ' """ I 0; ---.. 'I~.. I I " i \, ,\ \ , .Q!, sOll .,' .!'; ," ) Wi ;,;. Project 2 . "", :-1r-:r I. 'B;rk! Shores . - 0- /~_.m~ North of Lantana Road off of sr~,p~o:.'ll is ,- 'I' ' I Haverhlll Road, Greenacres ~lq~es iLL 1/1./' ' , L_____ ,.,--'1-----.1-' ~'--''''-:r:' .~..,-J~ IBJ2:J_._:~' I]tiake Worth ;r--'" -- roo' ~i~~-i~-':--" '?::lect4 ' I!------' ~ltb.,_-r,l(____ .,/ \~a a~l1801 NE "1th Street, 1,'. ~ Farmlpark i . Iii'll 8!r2 ,9 , at: Boynton Beach, Fl33435 I 11"0' .. '--. '-Lj. ..l~. 'i. ~1.' ="~ 1r---1H'. ,JOIUlCO . .. FL01'DA ~' ~~llJf-' ;!-lr I PrQject 3 !: ~Il /'. . 4, '1000 South Congress Ave, .(i='~""Oii ~JOcean RIdge ,Boynton Beach, FL 33435 i .[ i,~\.',vnton'8eaCh PAL i ! 792 -rl" " Arthur R. Mar5h~lIj ." i :)-- . '".,.. .l?fI SUBJECT Loxahatchee N:W.R. '!I 'I ei 700 N Seacrest Blvd The Ii "01 II ., ' 4-rB~ynton B.~Cl~h, FL33"135 Evef'gladf~S.. ,.. Ii cfl, i/' ---. .. '--~. '.~~~.8ea~h.. ' PrOject -1.. .~ -_L__ ",,;' ",.E~'r---I., ..' Jog Road & Flavor Plct Road, F~""'l---"- 8~7 qt1A',-,. Ooy~"" ~:~:II:~'~~~ """"H '" ':n~~~~~F' IIi I 1/ .' "(I 6Beaeh, . :. II [ ;"'C---r~UnL-I~9.0rf ~ Jl)i ..' ' Parks and ReCrtnIi.6~~ ~- --'-1~"l..= 794'::' I \ II I Ii' 1-- fBooo{;' Id , , -.--"-.)! - s06~'~'~7'''-='~"",I' ~'~,=..,_J/ I. I.,',!! [' .(' ~--aoC~R~ton '-. 7gB .... 4i,1 '---. ......J/(---T-: i-~~~::i[]PaJ~S~d' sj5-.J~ ,L, .V. .l~eli:r\3ati9n '... ",Ib~.- --'.'r. ---'t"t ----. J .'T:'..'.... ,~arkla/~d. Ilj--~10'~. i----t./ ='"1' 'of;:;/~j~':~~~bli' ,. --.. 8'69' :=1~;:;-G1mef~ -- --p '.1":' ...., ',.' , .... , .1' . J. ,/ A1A.I- , r (1~e":,I:.1';--I~ nr rrt'frn/s.,J.."igi;I..., " II .: 'or J~-0~P.J;J.~$ - . ~34 -,~,-,c=,ojF""i-~rr-'~iI Lightl:lotiile, I L I, ;1, \. /: ,;' ,I I; Point , , 0 mi 2 4 6 8 10 12 Copyright ~ 19~~.,2005 Nhcrosof1 Corp. andlo, ils suPPlj.ers. All rights reserved, hUp:llwww.microsoll.comlstreelsl ~ 2004 NAVTEO. All Tlghls reserved, This dala includes informallon laken wllh permiSSion from CanadIan aulhorilies Cl Har Majesty the Quean In R'Ohl of Canaca. ll) COPYlIOhl 2004 by TeleAllas North America. Inc. All righ.ls reserved. \\ iJ if n t ic Ocean ;.'. , 2006- 222 Occan Brceze Townhomes 38 COMPARABLE PROJECT NO.1 ~ Name: Green Cay Village Location: Jog Road & Flavor Pict Road, Boynton Beach, FL Project Information: Building Type: Unit Types: Typical Unit Size: Year Built: Project Condition Maintenance Fee Condominiums and TownllOme Project 2/2 and 3/2 995-1,395square feet 2005 New/Excellent $263-$323 per month Facilities/Amenities: Nice landscaping, conununity pool, water views, clubhouse, gym Unit Pricing: Unit Type 2/2 3/2 TH lCG 3/2 Flat 1 CG A vg Sales Price $198,900 $292,000 $312,000 Avg.Size/SF. 955 1,395 1,302 $/SF $208.27 $209.32 $239.63 Comments: This is a 420 unit condominium development located in the City of Boynton Beach. The project is newly constmcted and considered to be in excellent condition, The units have 2-3 bedrooms and 2 bathrooms. The 3 bedroom units llave J car garages. The property has many amenities. TIle floor plans are functional and room sizes are typical of the area. Altair Appraisal Group, Inc, 2006- 222 Ocean Breeze Townhomes 39 COMPARABLE PROJECT NO.2 to Name: Verona Palms Location: North of Lantana Road of Haverhill Road, Greenacres, FL Project Information: Building Type: Unit Types: Typical Unit Size: Year Built: Project Condition Maintenance Fee Townhome Project 3/2.5 1,782-1,791 square feet 2006 New/Excellent $168.34-$173.08 Facilities/Amenities: Nice landscaping, community pool Unit Pricing: Unit Type A vg Price 3/2.5 TH 2CG $299,990 3/2.5 TH 2CG $309,990 A vg. Size 1,782 1,791 $/SF $] 68.34 $]73.08 Comments: This is a 134 unit condominium development located in the City of Green acres. This is a newly constructed condominium project. The units have 3 bedrooms and 2.5 bathrooms. All of the units have 2 car garages. The floor plans are functional and room sizes are typical of the area. . . Altair Appraisal Group, Inc, 2006- 222 Ocean Breeze Townhomes 40 COMPARABLE PROJECT NO.3 lO Name: Monterey Townhomes Location: 4000 S. Congress Ave, Boynton Beach, FL Project Information: Building Type: Unit Types: Typical Unit Size: Year Built: Project Condition Maintenance Fee Town1lOme Project 2/2.5, 3/2.5, & 3/3 1,436-1,5J6quare feet 2005-2006 New/Excellent $236(proposed) Facilities/Amen ities: Well landscaped, community pool, nature trails, lake Unit Pricing: Unit Type 2/2.5 3/2.5 3/3 A vg Sales Price $300,990 $285,990 $300,990 A vg. Size/SF. 1,436 1,536 1,527 $/SF $209.60 $186.19 $197.1] Comments: This is a larger condominium development located in the City of Boynton Beach. The property is in the final stages of construction and is considered to be in excellent condition. The units have 2 or 3 bedrooms and 2.5 to 3 bathrooms. The property has good amenities. The floor plans are functional and room sizes are typical of the area. Altair Appraisal Group, Inc. 2006- 222 Ocean Breeze Townhomes 41 COMPARABLE PROJECT NO.4 II Name: The Preserve at BOY1lton Beach Location: 180 I Northeast 4th street, Boynton Beach, FL Project Information: Building Type: Unit Types: Typical Unit Size: Year Built: Project Condition Maintenance Fee Two story condominium project 2/2 & 3/3 1,071-1,601 square feet 2006 New/Excellent $225 per month Facilities/Amenities: Swimming pool, pool side cabanas, tot,lot, and club110use Unit Pricing: Unit Type A vg Sales Price 2/2 $289,990 2/2+Den $349,990 3/2.5 TH 1 CG $349,990 3/2.5 TH I CG $359,990 Avg. Size/SF. 1,071 1,561 ],557 1,601 $/SF $270.77 $224,21 $224.73 $224.85 Comments: This is a condo development located in the City of Boynton Beach. The property is in the final stages of completion and is considered to be in excellent condition. The units have 2-3 bedrooms and 2 to 2,5 bathrooms. The units have] ear garages. Each unit is sold with a one car garage. The floor plans are functional and room sizes are typical of the area. r . Altair Appraisal Group, Inc. 2006- 222 Ocean Breeze Townhomes 42 BASE UNIT BASE PRICING As previously discussed, the base pricing and estimated gross sales prices for the subject units are based upon the sales prices of other similar units within the subject market area. All of the comparable projects offered similar size condo units and would generally be considered as altematives to the subject by potential purchasers. The comparable properties are summarized below. '" Proposed Pricing Comparison for 3 bedroom units Compo Unit Type Average A verage Unit Average $/Unit Size SF SF/Unit 1 3/2 TH, 1 CG $292,000 1,395 $209.32 3/2 Flat, I CG $312,000 1,302 $239.63 2 3/2.5 TH, 2 CG $299,990 1,782 $168.34 3/2.5 TH, 2 CG $309,990 1,791 $173.08 3 3/2.5 TH Inside $285,990 1,536 $186.19 3/3 TH Comer $300,990 1,527 $197.11 4 3/2.5 TH, 1 CG $349,990 1,557 $224.73 3.25TH,lCG $359,990 1,601 $224.85 Average $313,867 1,561 $202,78 The comparable projects are newer town home projects similar to the subject property. The three bedroom units range in size from 1,302 to 1,791 square feet and are selling from $292,000 to $359,990 or $168.34 to $239.63 per square foot. 0> The comparable projects have been built between 2004 and 2006. Comparables one and four are larg.er developments with more amenities such as clubhouses, gyms and lake and are selling for the highest prices per square foot. Comparable projects one, three and four are all located within the Boynton Beach area. Comparable two has a slightly inferior location in Greenacres and is selling for the lowest unit value of $168,34 per square foot. Based on the subject project's location, amenities and types of units offered, the market value of the subject units is estimated in the mid to upper portions of the range per square foot. The subject three bedroom town home units contain approximately 1,400 square feet and have I car garages. We estimate an average sales price of $200.00 per square fOOl or $280,000 for the subject town home units. Developers ofprojects such as the subject generally apply periodic price increases during the course of a sales program. However, this is a small project that will sell out quickly and no increases are necessary. Gross Sale Proceeds: Based upon the concluded retail unit values, the gross sale proceeds for the subject property is estimated at $10,360,000 or $280,000 per unit. . . Altair Appraisal Group, Inc, 2006- 222 Ocean Breeze Townhomes 43 Absorption Period: In order to estimate an absorption period for the subject units, we surveyed projects within the subject area. The developments considered for the absorption analysis are shown on the following chart. II I Comp,,;,," ! Absorption ComparabJes ] I I NameILocation # of Units A vg. Sales Price A vg Monthly Absorption J Green Cay Village 360 $198,900-$312,000 20.00 Boynton Beach ~ 2 Verona Palms 134 $299,990.$309,990 6,00 Greenacres 3 Monterey 300 $285.990-$300,990 5,38 Townhomes Boynton Beach 4 The Preserve 180 $289,990-$359,990 5.00 Boynton Beach All of the comparables are town home or condominium projects. They are located in Boynton Beach and Greenacres. The average sales prices are similar to that projected for the subject units. These properties have indicated average monthly absorption rates of 5.00 to 20 units per month. The subject property is located in an area with few competing projects, The subject units are three bedroom units that will be reasonably priced. Smaller projects tend to sell slightly slower than larger projects. An average monthly absorption rate of5 units per month is estimated for the subject. Due to the number of units, the cash flow analysis will be on a monthly basis with an average absorption of 5 units per monthly period. Presales: The subject will be new construction and we estimate the construction period to be approximately one year. During this time the property will be marketed and we have estimated that approximately 20 pre-sales would be reasonable and would close in the first sales period (approximately I year). Expenses Incurred During Sellout: Estimated expenses associated with selling out the subject units are based on current marketing costs in the local market, as well as historical expenses in similar developments. The expenses associated with the retail sale of the subject units are estimated as follows: I. Sales Exoense associated with the selling of the units are estimated to be 3.0% of the gross sales proceeds. This expense is directly related to sale activity and as such is calculated as a percent of the gross sales proceeds for the period, The 3.0% is a typical average for in-house and co-brokers sales. 2. Marketinl! Exoense for marketing the units is estimated at .5% of the gross sales proceeds. This expense is above what is typical of residential developments, however conversion developments similar to the subject require an extensive initial advertising program. . . Altair Appraisal Group, Inc. 2006- 222 Ocean Breeze Townhomes 44 3. General Administrative in selling the units is estimated at 5.0% of the gross sales proceeds. The total amount of this expense is calculated as a percent of the total gross sales proceeds for the individual units. This expense is considered to be level throughout the sellout period. 4. . Closing EXDense associated with the selling of the units is estimated to be ,5% of the gross sales proceeds. This expense is also directly related to sale activity and as such is calcu]ated as a percent of the gross sales proceeds for the period, 5. Maintenance and Utilities is associated with the maintenance of the common area amenities, model units, and renovated end units prior to closing. These costs were estimated at 0,25% of the gross retail value of the unsold units remaining in the inventory. 6. Rea] Estate Taxes levied on the units while in inventory - Based on accruals and prorations at the time each unit is sold, and on lump-sum payments billed at the end of each tax year for unsold units in inventory. The taxes are estimated based on the cllrrent taxes for the land and are estimated at $450 per unit per month as planned, Sellout periods may not coincide with tax year periods. ~ 7, Initial Adve11ising and Sales Office Start UD Exoenses These expenses are associated with marketing material design, advertising, and sales office startup, and also include the cost to decorate the model units. We have estimated these expenses at $]5,000 for the subject property. Entrepreneurial Profit: We have deducted a line item ofp1'Ofit to reflect the incentive necessary for the entrepreneur to undertake the sellout of a project such as the subject property. Entrepreneurial profit typically ranges from 5% to 20% depending upon the magnitude ofthe project involved, the length of the sellout period and the level of perceived risk. Because the units are already built and there is little competition for the subject units, the risk is relatively low. The margin of profit allocated to the units only for the undel1aking of the sellout has been estimated at the middle of the range, or 10.0% of the gross sales proceeds. Discount Rate Derivation: The final step in tlle process is to discount tlle net proceeds from the sellout of the subject units. Realty Rates.com's Developer Survey indicates discount rates of between 11,75% to 24.60% with an average of 17.45% for suburban condos. The subject property is a new townhome project with affordable priced units and there is little risk associated with a project of this type. Therefore, we have utilized a discount rate of 12.00% based on this infonnation, Discounted Sellout: Based upon the retail market values and absorption rates projected, the preceding mortgage/equity parameters, and estimated sales expenses, the discounted sellout analysis yields a bulk value indication rounded to $8,200,000. The results of our Discounted Sellout Analysis are included in the following pages. Value Indication via Income Approach Based on the foregoing data and analysis and the Discounted Sellout Analysis, we conclude that the indicated market value of the subject property, in bulk to a single buyer, by the income approach is $8.200.000. r r Altair Appraisal Group, Inc. n; '0 I- .... ., ~ ".... 9 ~ 2 ("\Jf'l"""'OO('\l M '" Ql ~ :1:.,,,, i <;> (2 8 Ql N Ql Ql ro c: It] Ql U o "-U')U")OOtn ,..., "',.. o 6- Ql CD NI()OOOl./) ~ M '1'"""- .....l()IJ')QOll1 qr-r-J N '" " <I: o '" Ql ~ Ql cl: ""- 0 0 0 0'0 MNN I I I '" (ij n In lfJ E l'1 ffi ~ ~ ?:- ~.. ii5 ~ i ~ ~~~ I ~ ~I ~ U ~ ~ 8 "0 I 'iji ::;~~ g, ~ ~ ~ .~ ~ ~ c:~'g8~5~O I,. tg~~!'~~J~g ~ ~ ~ ~ o Q. 0,11) .... M o o o 0' co M 0' .. 8 00 10 00 0 . o~o.. . 0 o 00 0- eo co (0 to N NiJ) U") CAtRlo')tf)lhto'J bi 8 ~ ~ '1 g o 00 o. eo CD 0 0 N N'q. V. ~ ~ (!ttfilA~tRCI') (f!l 8 o' 0) N 00 88 0.0' <co N ", tRut<R4I>4Atn U') o o o o' '" N 00 00 00 o~ o' <co NO ....' ~ (..<) (/'Jtfl ~ tf).~ ~ ~. I <c '" N N tA(/)~~CA~ tF} '" .. 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U e .. .. ;:; VI a; Z o o "', :Ii v '" o '" ,..., 'o,: N ~ '" o o '" N' N ~, 2 u I\J "- C " o u '" i5 o 0> '" o .... 0> o 10 0> ('oj o '" 0> o 0> Ol a o Ol Ol o o o o o o o ~ of. 8 '" o '" ~ co Ol o ~) Vl .. " Ql " U o .t iJ z " .. c " o u I/l Ci <0 .... co 0' o '" .. 8 o 0' '" '" ",' 10 10 v ",' o ('oj ai ... v Ol '" ",' ., v <0 ~ ai o N ",' .. Vl '" 0> v' Ol o. r_ to 'Q'! .... .... ,,-' .. <0 .... co o' <c to u:i o o a 0' ~,I tn, .. tOO('\l~ tOOC'\lM ""OlDV';> eo' o' .-: co ClONO NC"IN..... a)' r:o' .. '" .,,,,, '" " Ql Gl u o Q. Ql Z .; '" i3 Ql ,~ ;; :; E " o " t: :> f tl ~ ~~ -g"1jl" iO~w~ ~~:5~ ':0::.5.5 II COST APPROACH 2006- 222 Ocean Breeze Townhomes 47 COST APPROACH The premise of the Cost Analysis is that a typically informed purchaser would pay no more for the property being appraised than the cost of producing a substitute property with the same utility. Although most applicable as an indicator of market value when the property being appraised involves relatively new improvements representing the highest and best use of the land, this method generally is less applicable for older properties since the likelihood of encountering physical, functional and/or locational value loss tends to increase with property age, The greater the incidence of such loss factors, the less reliable the final value approach inqication since quite often these loss factors cannot be finitely measured. II The general methodology of the Cost Analysis in the appraisal procedure involves the division of the property being appraised into basic elements of land and improvements. The steps in this methodology are: I, Estimate the value of the site as vacant and ready for improvements. 2. Estimate the current cost to replace the improvements, considering entrepreneurial profit. 3. Estimate the dollar amount of accrued depreciation attributable to the following: a. Physical deterioration b. Functional obsolescence c. Locational (Economic) obsolescence 4. Deduct the total amount of accrued depreciation from the current replacement cost to derive the present depreciated cost of the improvements. 5. Derive an indication of value for the property by adding the' land value estimate and the estimate of the depreciation cost of the improvements. Scope of Land Sales Search The value of the site is estimated based on sales of comparable vacant residential properties located within the subject area. Four comparable sales were found and analyzed. , . Altair Appraisal Group, Inc. 2006- 222 Ocean Breeze Townhomes 48 LAND SALES SUMMARY CHART Subject Sale 1 Sale 2 Sale 3 Sale 4 Location Ocean Breeze Pineapple Grove Colony Palms Waterbrook Habor Cay Seacrest Blvd. Gulfstream Blvd, Atlantic Avenue 2649 N Lakeside ;: Federal Hv,'Y Harbor Drive City Boynton Beach Boynton Beach Delray Beach>. Boynton Bch Boynton Bch ~ " , Sale Date N/A 12/2/05 4/20/05 9/19/05 11/21/05 II Sale Price N/A $9,000,000 $5,316,666 $7,000,000 $3,107,000 , Zoning Multi-family Multi-family Multi-family Multi-family Multi-family OR Book 19711/986 18485/121 19284/1042 19635/1363 Seller N/A Pineapple Grove Be Properties William Anand Patel, Properties, Ltd, & Investments Smith Trust LLC LLC Buyer N/A New Century Colony Palm Waterbrook Harbor Cay, Boynton One Development Peninsula LLC Development Co, LLC LLC Land Size;,.AC 4.39/3.44 8.60 5.00 3.51 1.44 Site Plan YeslNo Seller Seller Sel/er Sel/er Planned Units 37 82 45 70 23 Price/U nit N/A $109,756 $118,148 $100,000 Adjustments siU91, MtD ~ Market CUlTent Similar Inferior t Conditions Condo of Sale Normal Similar Similar Similar Similar Financing Conv. Similar Similar Similar Similar Location Average Similar Superior Superior Superior Zoning Multi-family Similar Similar Similar Similar Density 10.8 du/ac Similar Similar Superior Superior Utility Average Similar Similar Similar Similar Size 4.39/3.44 Similar Similar Similar Inferior Overall N/A Similar Superior Similar Superior Comparison r r Altair Appraisal Group, Inc. 2006- 222 Ocean Breeze Townhomes 49 DISCUSSION OF ADJUSTMENTS Property Rights All of the sale propel1ies were fee simple transfers. No adjustments were required. lvfarket Conditions Sale three was under contract for longer than typical, is cqnsidered inferior and an upward adjustment is considered. All of the other sales are fairly recent transactions and require no adjustments. ~ Conditions 0./ Sale The conditions of sale were verified to be an ann's length in nature and no adjustments were warranted, Financing Financing was analyzed for each of the comparables. All of the comparables were either purchased with cash or financed through market related instmments, with none of the comparables requiring an adjustment for financing. Location The subject property is considered to have an average location. Sale one is located in an area similar to the subject and no adjustment is considered. Sales two, three and four have superior locations and downward adjustments are considered. Zoning The sales are all zoned for multi family development and are similar to the subject and no adjustments are made. Density Sales one and two are being improved with projects that have actual densities most similar to the subject property and no adjustments are made for this factor. Sales three and four have higher densities that arc considered superior and downward adjustments are made to these sales. Utili(v The comparable sales are considered generally similar to the subject and no adjustments are made. Altair Appraisal Group, Inc. 2006- 222 Ocean Breeze Townhomes 50 Size Sale four is smaller than typical for a residential project of this type, is considered inferior to the subj<;:ct and an upward adjustments is considered. The remaining sales are considered generally similar to the subject and no adjustments are needed.. Value per Unit Conclusion .. The sales considered are the most similar of the sales found,! and are considered to be reliable indications of market value for the subject. The per unit sales prices ranged from $100,000 to $ I 35,087. All of these comparables sold with the site plans completed by the sellers. Sales one and three are considered the most similar to the subject and indicate a range of$IOO,OOO to $109,756 per planned unit. We are estimating the market value of the subject property at $ I 00,000 per planned unit. This is extended as follows. Eastern parcel (47 possible ul)its) @ $100,000 per acre = $4,700,000 less cost for site plan process - $200,000 =$4,500,000* Western parcel (37 possible units) @ $100,000 per acre == $3,700,000 The western parcel has site plan approval for the proposed 37 unit town home project. According to the property owner, Mr. Larry Finkelstein, the site plan approval process took approximately six months and cost approximately $200,000 for the proposed 37-ullit project. *Based on infOlmation from developers of the comparable projects, the cost for approvals have been ranging ham $1 00,000 to $200,000 for smaller multi-family projects. Lynn Riley, Project Manager with Land Design South, indicated that this is well within the range for a project of this type, A typical time frame for this process would be between six and twelve months. Therefore, we will discount the value of the eastem parcel by $200,000 for the cost to complete this process. The final value for the eastern parcel is $4,500,000. Altair Appraisal Group, lnc, II REPLACEMENT COST NEW 2006- 222 Ocean Breeze Townhomes REPLACEMENT COST NEW FOR PROPOSED 37 UNIT PROJECT 52 Contractor's Cost Estimates Based on the information provided, the construction costs have been provided as about $4,822,048 Or $93.16 per square foot. This includes architect fees and other soft costs. Marshall Valuation Service Cost Estimate II The replacement cost new ofthe improvemen ts is based on the Marshall Valuation Cost Handbook. The subject is considered comparable with a Good Class "C" Residential Building with a base Cost of $73 per square foot. The base cost is adjusted by CUrrent cost and local multipliers to bring the final square foot cost to a CUrrent applicable figure. Appliance package cost was added to the total. Site Improvements The contributory vallie of the site improvements was derived from estimates provided by the property OWner, Site work/sewer for this parcei is estimated to be $537,500, Landscaping, irrigation and grading si te is cst; mated to be $92,500, Permits are estimated to be $ 9,480 and another $50,000 is for contingency items. The total for site improvements is $689,480. Altair AppraIsal Group, Inc, 2006- 222 Ocean Breeze Townhomes 53 * Replacement Cost New Analysis Building Type Residential Building Building Quality Good Building Class "C." Exterior Wall CBS Gross Bldg. Area 51,763 Year Built 2006 SectionlPage ]2/]4 Base Cost Per SF $73 Appliance Package $2.50 Sub Total $75,50 Ceiling Heigh! Multiplier 1,000 Current Cost Multiplier Aug. 04 1.04 Local Cost Multiplier Boynton Beach 0.91 Current Refined Cost $71.45 Gross Building Area 51. 763 Subtotal Building Cost $3,698,466 Garages 8,917 SF @ $50.00/SF $446,000 Total Building Cost $4,] 44,466 Plus: Site Improvements $689,480 Total Building & Site Improvement Cost $4,833,946 Rounded to $4,835,000 Reconciliation of Reproduction Cost New The two methods of reproduction cost new indicated the following: Contractor's Cost Estimate Marshall Valuation Service $4,822,048 $4,835,000 Both estimates sUPP0l1 each other and based on the two methods the reproduction cost new of the subject property is estimated and reconciled at $4,825,000. Entrepreneurial Profit Entrepreneurial profit is included in the cost approach as payment for a necessary economic factor of production and represents the threshold amount of compensation that a prudent entrepreneur would require in order to make it worthwhile to go to the effort of bringing the project into being. Entrepreneurial profit is based on the amount in excess of hard and soft acquisition and development costs that a prudent developer would require. Based on interviews with local developers, an entrepreneurial profit of ] 0,0 to 15,0 percent is typically considered for a project. An entrepreneurial profit of 10.0 percent is estimated for the subject considering it is a small multi tenant residential project. . . Altair Appraisal Group, Joe, 2006.222 Ocean Breeze Townhomes 54 Dep,'eciation Depreciation is a loss in value from replacement cost new. It must be separately estimated and then subtracted fi'om the reproduction or replacement cost new. There is depreciation in the subject property in the form of physical deterioration and external obsolescence. Physical Deterioration Curable: None. Incurable: The subject improvements are proposed and have no effecti ve age ~ Functional Obsolescence Curable: None. Incurable: None. External Obsolescence Curable: None. Incurable: None. Cost Approach Summary Replacement Cost New of Bldg. & Site Improvements Plus: Entrepreneurial Profit @ 10.00% Replacement Cost New of Building Improvements $4,825,000 $ 482.500 $5,307,500 Less: Accrued Depreciation Physical Deterioration - 0.00% Functional Obsolescence External Obsolescence Total Accrued Depreciation Depreciated Value of Bldg. & Site Imp. $0 $0 $.Q ($.Q) Plus: Land Value Total Value of Subject "As Is" Rounded to: $5,307,500 $3.700.000 $9,007,500 $9,000,000 Altair Appraisal Group, Inc, . RECONCILIA TION & FINAL VALUE ESTIMATE 2006- 222 Ocean Breeze Townhomes 56 RECONCILIA TION & FINAL VALUE ESTIMA TE The purpose of this appraisal was to estimate the market value of the fee simple interest in the subject property "as is" or land value as of the effective date of this appraisal and the value "as completed" with an estimated date of completion of August 1, 2007. In estimating the as is fee simple market value only the land value estimate from the cost approach is used. For the as completed value, two of the three traditional approaches to value were applied, which yielded respective value indications as follows: As Is Value (Land Only) Eastern Parcel (4.39 ac.-es) /]J) b 5 S' $4,500,000 1'\ I) OJ. J 0 $3,700,000 ~ \ I 01(j ~ Vi ~ Western Parcel (3.44 acres) As Completed Value for 37-unit Town Home Project Income Approach $8,200,000 Cost Approach $9,000,000 The close range of value estimates provided by the two approaches applied in thc valuation provide additional credence to each of the approaches as well as the final value estimate. As a result of our investigation into those matters which affect market value, and by virtue of our experience and training, we have formed the opinion that the market value of the fee simple interest in the subject property, "As Is", vacant land, effective as of July 4, 2006, was: Eastern Parcel - $4,500,000 Western Parcel - $3,700,000 Additionally, as a result of our investigation into those matters which affect market value, and by virtue of our experience and training, we have formed the opinion that the market value of the fee simple interest in the subject property, as iffulIy developed as a town home development in bulk to a single purchaser, effective as of July 4, 2006, but projecting for a completion date of August I, 2007 was: EIGHT MILLION FIVE HUNDRED THOUSAND DOLLARS ($8,500,000) " 5 \l t ~ \ \O~ ) r . Altair Appraisal Group, Inc. II DEFINITIONS DEFINITIONS Marker Value: The most probable price which a property should bring in a competitive and open market und" all conditions "quisite to a fa'" sale, the buyer and seller each acting prudently, knowledgeably, and assuming the price is not affected by undue stimulus, Implicit in this definition is the ~onsUmmation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: ~ I. buyer and seller are typically motivated; 2, both parties are well informed or well advised, and each acting in what he considers his OWn bcst interests; 3. a reasonable time is allowed for exposure in the open market; 4, payment is made in ternlS of cash in U, S, dollars or in teffilS of financial arrangemenl5 comparable thercto; and, 5, the price represents the nOffilal consideration for the property sold unaffected hy special or creative financing or sales concessions granted by anyonc associated with the sale, I Entrepreneoriallncentive: Entrepreneurial incentive is a market-derived figure that represents the mount the entrepreneur expects to receive as repayment for his expenditure (dir'ect and indirect costs) and as compensation for providing coordination and expertise and assuming the risks associated wi th the development of a project. Entrepreneurial inccnti vo is what moti vates the eotrepreneur _ the reward the entrepreneur anticipates receiving. The frame of referencc for entrepreneurial incentive is forward- lOOking. Entrepreneurial incentive may be expressed as a rate or percentage of cost. 2 Entrepreneurial Profit: Entrepreneurial profit IS the difference between total cost of a development and marketing and the market value of a property after completion and achievement of stabilized occupancy. The frame of reference for entrepreneurial profit is backward-looking. Entrepreneurial profit can take the form of profit on a sale, additional return on an investment in an operating property, or the use value to the entrepreneur.3 Develnper's Fee: A developer's fec represents cOmpensation for the overall management of the project, ;,e" the time, energy, and experience the developer invests in the project and the risks the developer takes, The developer's fee is equivalent to the salary the developer might otherwise obtain, The developer's fee may also be expressed as a rate, Care should be taken to distinguish the developer's fee from the fee paid to a project management fiffil for the supervision of on-site contractors Or subcontractors io the event the developer delegates the construction management role, Finally, the developer's fee should oot be confused with the contractor's profit and overhead, which are considered among the direct costs of construction.4 I Unifonn Standards of Professional Appraisal Practice, J 998 Ed., page 163 2 The Appraisal of Real Estate, Appraisal Institute, ] 996 3 Ibid 4 Ibid DEFINITIONS (CoJ1lil1ued) Fee Simple Estate: Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police pOwer, and escheat.5 Leased Fee Estate: An ownership interest held by a landlord with the rights of use and Occupancy conveyed by lease to others, The rights of the lessor (tbe leased fee owner) and the leased fee are specified by contract tenns contained within the lease,6 Leasehold Estate: The interest held by the lessee (the tenant or Fenter) through a lease conveying the rights of use and occupancy for a stated tenn under certain conditions.7 ~ Highest and Best Use: The reasonably probable and legal use ofvac8nt land or an improved property, which is physically possible, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum profitability.8 Replacement cost: The estimated cost to construct, at current prices as of the effective appraisal date, a building with utility equivalent to the building being appraised, using modem materials and current standards, design and layout. 9 Reproduction cost: The estimated cost to construct, at current prices of the effective date of the appraisal, an exact duplicate or replica of the building being appraised, using the same materials, construction standards, design, layout and quality of workmanship and embodying all the deficiencies, superadequacies, and obsolescence of the subject building, 10 Exposure: 1. The time a property remains on the market. 2. The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective estimate based upon an analysis of past events assuming a competitive and open market. Exposure time is always presumed to OCcur prior to tl1e effective date of the appraisal. The overall concept of reasonable exposure encompasses not only adequate, sufficient and reasonable time but also adequate, sufficient and reasonable effort. Exposure time is different for various types of real estate and value ranges and under various market conditions. II 5 The Dictionary of Real Estate Appraisal, 3,d Ed" Appraisal Institute, 1993 6 Ibid 7 Ibid 8 Ibid 9 Ibid 10 Ibid ] 1 fbid DEFINITIONS (Continued) Marketing Time: The reasonable marketing time is an estimate of the amount of time it might take to sell a property interest in real estate at the estimated market value level during the period immediately after the effective date of an appraisal. 12 Prospective Value Estimate: A forecast of the value expected at a specified future date. A prospective value estimate is most frequently sought in connection with real estate projects that are proposed, under constmction, or under conversion to a new use, or those that have not yet ac11ieved sellout or a stabilized level of long-tenn Occupancy at the time: the appraisal report is written, 1113 i . . J 2 Uniform Standards of Professional Appraisal Practice, ] 998 Ed" page J 09 13 The Dictionary of Real Estate Appraisal, 3'd Ed" Appraisal Institute, 1993 ~ REGIONAL ANALYSIS South Florida Regional Analysis SOUTH FLORIDA REGIONAL ANALYSIS LOCATION AND OVERVIEW South Florida is comprised of a tri-county area located on the southern tip of the state. This area consists of Broward, Miami-Dade and Palm Beach Counties, The main cities within each county are Fort Lauderdale in Broward County, Miami in Miami-Dade County and West Palm Beach in Palm Beach County, The following is a brief overview of each county within the South Florida region: . A) Broward County Broward County covers roughly 25 miles from north to south and 48 miles from east to west, incorporating approximately 1,197 square miles. Roughly 410 square miles are developable and development is rapidly approaching the western boundaries of the county. This trend has become very noticeable during the last decade; especially as new transportation routes have been designed and built in the western areas of the county. Although land is still available for development, it is becoming more and more scarce with most of the prime sites already having been acquired. Certain areas in the western Portion of the county have been designated Conservation Areas because of the Everglades National Park and the surrounding Everglades. This area consists of low wetlands that support numerous species of wildlife, some of which could only survive under the unique characteristics of the arca. Broward County is also the home of the ] 65 square mile Seminole Indian Reservation located in the southern portion of the county. B) Miami-Dade County Miami-Dade County has incorporated approximately 1,955 square miles and is the third largest county in tem1S of area in the state, behind Palm Beach' and Collier Counties. Development in Miami-Dade County is rapidly approaching the western limits. This trend has become very noticeable during the last decade; especially as new transportation routes have been designed and built in the western areas of urban Miami-Dade County. Although land is still available for development, it is becoming more and more scarce with most of the prime sites already having been acquired, Certain areas in the western portion of the county have been designated for Indian reservation, wildlife management, conservation, national parks and game refuges, The presence of wetland arcas does not interfere with the desirability of the county as a major tourist and retirement center and, in fact, adds somewhat to the allure of the area. C) Palm Beach County Palm Beach County has approximately 40 miles of coastline along the Atlantic Ocean and is roughly 50 miles east and west, incorporating approximately 1,993 square miles. Palm Beach County is the largest county in tenns of area in the state, For the past two decades, the majority of developmental activity has been situated west of the Intracoastal Waterway and is characterized by sprawling residential communities, shopping centers and office parks. Congestion along the east/west corridors has followed this westward expansion trend. Palm Beach County has a much greater availability of land for most types of urban development. Certain areas in the western portion of the county have been ALTAIR APPRAISAL GROUP, INC. South Florida Regional Analysis .., ~ designated for wildlife management, conservation, national park and game refuge. The presence of wetland areas does not interfere with the desirability of the county as a major tourist and retirement center and, in fact, adds somewhat to the allure of the area. POPULATION GROWTH AND STATISTICS " South Florida recently gained visibility in the business arena after a federal government decision to officially merge Broward, Miami-Dade and palm Beach Counties into one "metropolitan statistical area." This metropolitan statistical area will be the 6th largest in the United States and should bring national attention and development into the region with the newfound ability to promote the area throughout the U.S. and abroad. South Florida accounts for approximately 31 % of the State of Florida's entire population with Miami-Dade, Broward and Palm Beach Counties representing the top 3 counties in state. The following table shows population totals for South Florida in relation to the State of Florida as reported 2004 Florida Trend Economic Yearbook: % Change County 2003 2004 '03-'04 Broward 1,719,69] ],765,693 2.68% Miami-Dade 2,349,637 2,356,828 0.31% Palm Beach 1,203,090 ],251,087 3.99% State of Florida J 6,977,890 17,239,646 1.54% The distribution of the population's age is shown in the following graph: ,.----.-....-.-- -._--,---~-. ---..------_.----_.__._----_.__.~---- South Florida Age Distribution c: ~ :;:: Cl/ :; C. ~ Q.. '0 't?- 35,0% 30.0% 25.0% 20.0% 15.0% 10.0% ' 5.0% 0.0% ' Source: 2003 Florida Trend Economic Yearbook j-oBroward I III Miami-Dade I LO Palm Beach . I I I I 0-14 15-19 20-39 40-64 65+ Age Group ALTAIR APPRAISAL GROUP, JNC. South Florida Regional Analysis 3 EMPLOYMENT -As of March 2003 unemployment rates in Broward County were 5.5%,7.2% for Miami- Dade County and 5.6% for Palm Beach County. The following graph shows historic unemployment trends for the three counties from 1998-2003: Unemployment Trends - South Florida ----; II 10.0% <:J .... cq ex: .... c 6.0% Q.l S .... ~ 4.0% Q, e Ql 2.0% c ;;:) 0.0% I L-.. ,_.--'--h.-____hU _I ,-+- Broward -1W- Miami-Dade, I Palm Beach : ----..--__.____u__..__ ._._,,-' 1998 1999 2000 2001 2002 2003 Year Source: Florida Research & Economic Database The fOllowing is a summary of job totals and per capital income for the tri-county area: % Change Per Capita County 2003 2004 '03-'04 Income '04 Broward 728,9]4 923,836 26.74% $32,925 Miami-Dade 1.062,985 1,341,474 26.20% $28,261 Palm Beach 532 086 713,624 34,12% $45.614 State of Florida 7,488,047 9,673,285 29,]8% $3] ,242 The following are the top 5 employers for each county of the South Florida region: Broward County Miami-Dade County Palm Beach County School Board Public Schools School District CounN Government Countv Government CountY Government Publix Suoernlarkets State of Florida Intracoastal Health Svstems N, Broward HosDital District U.S, Government Publix SUDermarkets American Express Co, American Airlines U.S. Sugar Comoration ALTAIR APPRAISAL GROUP, INC. South Florida Regional Analysis 4 OFFICE MARKET The CB Richard Ellis Office Market Index Briefs for Broward, Miami-Dade and Palm Beach Countics, indicate the following as of 4th Quarter 2003: tl\ A) Broward County Office Market The Broward County office market contained a total inventory of 24,405,860 SF, The market coverage includes buildings ofJO,OOO SF and greater in size. The following chart summarizes their findings: County Inventory Vacancy Rate Broward 24,405,860 ]5,4% Miami-Dade 37,819,546 15.2% Palm Beach 21,869,066 1~,3.% Vacancy Net Under Actual Submarket NRA (SF) Rate Ahsorption Construction Rent/SF NNN Commercial Blvd. 2,100,820 15.5% 18,523 0 $11.50 Cypress Creek 3,764,674 19.4% 46,634 0 $J3.97 Deerfield Beach 970,802 13.3% (21,]46) 0 $10.25 Downtown (CBD) 4,874,7] ] 19.5% 65,417 40,000 $15.25 Fort Lauderdale 1,953,228 14.6% 16,390 0 $]1.25 HOllyWood 2,195,447 8.8% 46,383 0 $11.30 NW Broward 1,240,574 6.8% (3,725) 0 $]2.45 Plantation 2,8]] 570 15,6% 16,98] 361,000 $13.75 Pompano Beach 841,078 98% ( 15,028) 0 $Il. 97 Saw,grass 1,643,358 25,6% 2],033 0 $13.00 SW Broward 2,009,418 6.2% (9,872) 0 $13.85 Total 24,405,860 15.4% 18/,590 401,000 $]2.59 Thc Broward County office market remained stable with vacancy rates dropping to 15.4%, from thc third qnarter rate of 15,6%, The reason for this s light decrease is partly due to the lack of space being added to the market coupled with increasing office space needs of industries such as financial services, law fin11S, and healthcare services. There was little change in average asking lease rates while small amounts of constmction activity remains underway, Absorption during the fourth quarter of 2003 was positive, showing continued signs of modest improvement during the period. Net absorption was a positivc 18],590 SF for fonrth quarter 2003, Seven of cleven Broward County submarkets experienced positive net absorption, Downtown Fort Lauderdale's Central Business District (CBD) led the county with over 65,400 SF of absorbed space with the Cypress Creek submarket following suit with 46,600 SF, The lowest Icvels of nct absorption were found in the submarkets of Deerfield Beach and Pompano Beach. Activity continues to increase due to favorable rental rates combined with significant tenant improvement allowances (Tl's), The trend of larger national tenants choosing class reductions in space continued as leasing activity in Class B office space increased. This trend is a continuous effort of companies trying to decrease bottom line costs during the economic recovery. ALTAIR APPRAISAL GROUP, JNC, South Florida Regional Analysis 5 Broward County's unemployment rate remains lower than the national rate and decreased from the third quarter's rate. Companies continue to make real estate decisions while taking advantage of the lower costs that are available in Broward County. This cautions approach wiII benefit the Broward County office market when the upswing in the economy begins. II B) Miami-Dade County Office MaJ"ket The Miami-Dade County office market contained a total inventory of 37,819,546 SF. The market coverage includes buildings of 30,000 SF and greater in size. The fOllowing chaI1 summarizes their findings: Vacancy Net Under Asking Submarket NRA (SF) Rate Absorotion Construction Rent/SF NNN Airoort West 947,854 18.4% 118529 0 $20.03 A ventura 907,833 12.2% 9,288 133,839 $29.66 Biscavne Blvd. Corridor 853,975 /6.9% 77,094) 0 $21.08 Brickell 5,379,296 16.8% 46,730 260,000 $29.38 COCOm,lt Grove 1,04 J ,202 20.0% 8,374 0 $28.40 Coral Gables 5,192,033 ]4.2% 1,555 295,000 $26.59 Downtown 6,747,990 1.7% (J 19,361) ] 63,000 $22.53 Kendall 2,686 245 4.7% 6,560 0 $20,48 Miami Beach 1,849,179 22.0% ]3,945 0 $25.91 Miami Lakes 1,223,916 14.1% 35,909 0 $18.98 North Miami 1,086,797 13.7% 1,175 0 $16.57 Residual 1,372,556 12.8% (20,879) 0 $]6.3] Total 37,819,546 15,2% 94,731 831,839 $23.97 Miami-Dade's office market remained stable during the fourth quarter of 2003. Improving market conditions combined with real estate investors continuing to feed the South Florida economy show promising signs of tum-around in the office sector for 2004. It continues to be a tenant market and landlords are being creative to keep eXIstmg tenants as well as entice new tenants. Offers of one to three month free rent, higher tenant improvement allowances and lower annual escalations continue to be offered on three to five year lease deals. There is an increasing trend of owners buying out sublet tenants from their existing leases in order to allow existing or new tenants to expand into larger spaces for affordable costs. Tenants prefer to have flexibility instead of extensive tenant improvements as landlords are allowing companies to downsize into smaller vacant spaces while other tenants have the option to expand into those spaces. Continued stability within the office market is expected with economic forecasters predicting an upswing beginning around the mid-year, 2004. As economic recovery gains momentum, the investment boom in South Florida real estate impels the Miami office sector toward steady growth. ALTAIR APPRAISAL GROUP, INC. South Florida Regional Analysis 6 C) Palm Beach County Office Market The Palm Beach County office market contained a total inventory of 2] ,869,066 SF. The following chart summarizes their findings: ~ Vacancy Net Under Asking Submarket NRA (SF) Rate Absorption Constructio Rent/SF NNN n Boynton Beach 364,095 11.5% 7,300 60,000 $13.50 Boca Raton 10,882,596 14.2% 331,992 " 0 $17.00 Delray Beach 1,035,262 13.7% 7,433 0 $13.75 Jupiter 442,596 5.1% 1,906 30,000 $15.00 Lake W oI1h 592,838 11.9% (6,118) 0 $11.00 North Palm Beach 2,447,256 15.4% (3 ] ,683) 0 $15,00 Palm Beach 612,531 11.1% (12,830) 0 $28.00 Royal Palm Beach 202,428 0.0% (2,168) 0 $18.00 West Palm Beach 5,309,064 16,3% 15,878 0 $16.50 Total 21,869,066 14.3% 312,010 90,000 $16.41 The Palm Beach County office market's vacancy rate significantly decreased from 15.5% during the third quarter to 14.3% in the fourth quarter of 2003. Lease rates remained unchanged, construction activity is starting to increase, and net absorption increased significantly. Palm Beach County's net absorption for the fourth quarter of2003 was a positive 312,010 SF compared to the previous quarter's negative 89,774 SF of net absorption. Five of the nine submarkets in Palm Beach County showed increasing net absorption numbers with Boca Raton and West Palm Beach showing the largest improvements. Activity levels in the market have increased tremendously from the previous quarter. Deals are being done by larger national tenants who are continuing.to execute their long- tenn plans. Smaller tenants remain skeptical about the recovering economy, so they are putting real estate decisions on the back burner and are awaiting signs of a full economic recovery. Increasing Tenant Improvement Allowances (TI's) and "free rent" continue to entice owners and drive transactions, ALTAIR APPRAISAL GROUP, INC. South Florida Regional Analysis 7 INDUSTRIAL MARKET The CB Richard Ellis Industrial Market Index Briefs for Broward, Miami-Dade and Palm Beach Counties, indicate the following as of 3rd Quarter 2004: County loventon Vacancy Rate Broward 93,780,383 6.3% Miami-Dade 19] ,829,430 6.6% Palm Beach 44,630,971 5.6% ~ A) Broward County Industrial Market Overview The Broward County industrial market contained a total inventory of 93,780,383 SF. The market coverage includes buildings of 10,000 SF and greater in size. The following chart summarizes their findings: Gross Vacancy Net Under A vg. Asking Submarkct Building SF Rate Absorption Constructio Rent/SF NNN n Central Broward 15,986,789 7.0% 184,]45 36,480 $4.92 Coral Springs 4,] 99,683 4.5% 50,202 45,420 $8.00 NE Broward 8,797,380 6.5% 89,122 1 ]6,450 $6.05 Pomoano Beach 22,856,437 4.7% 263,747 68,500 $5.94 SE Broward 22,] 10,285 4.4% ] 11,060 260,800 $5.68 SW Broward 12,424,033 9,6% 234,192 404,992 $5.66 West Sunrise 7,405,776 10,0% 73,582 ] 86,480 $5.7] Total 93,780,383 6,3% ] 00,650 1,1 ]9,122 $5.73 Broward County's industrial market stability continued until t~e end of 2004. The vacancy rate slightly decreased and the net absorption remained positive, Disciplined construction' combined with unchanged rental rates also add to the appeal of Broward County for industrial tenants. The industrial sector's durability during 2004 can be attributed to the northward shift in South Florida. Developers maintain their desire for developable land while investors continue to seek real estate as an alternative to the stock market while economic recovery remains modest. Lower interest rates continue to aid small businesses and individuals to purchase small bay warehouse condominiums. Landlords stilI offer higher tenant concessions and improvements. In some cases, free rent is being offered, from I to 3 months free rent, but as an addition to the lease ternl and not at levels seen during the early 90's real estate downtum. These innovative negotiation tactics continue to entice tenant in signing the deal. Construction activity remains modest and disciplined. Over 1.2 milion square feet is currently tlDderway. The Pompano Beach submarket leads the county with four buildings totaling 377,924 SF underway at Premier's Atlantic Business Center. Upon completion, the park will total over 1.3 million SF. ALTAIR APPRAISAL GROUP, INC, South Florida Regional Analysis 8 B) Miami-Dade County IndusfJ'ial Market The Miami-Dade County industrial market contained a total inventory of 191,829,430 SF. The market coverage includes buildings of 10,000 SF and greater in size, The fOllowing c11art summarizes their findings: ~ Gross Vacancy Net Under A Yg. Asking Submarket Building SF Rate Absorption Constructio Rent/SF NNN n Central Miami 3,141,391 1.9% 0 0 $3.00 East Miami 3,440,4 75 2,4% 37,000 0 $4.66 Hialeah 34,459,556 2.6% 234,386 0 $4.32 Medley 22,405,456 5.0% 462,698 30,000 $5,84 Ai/port West 63,283,473 9.7% 442,569 203.500 $7,31 Miami Lakes J 0,60 1,893 6,8% 183,954 131,250 $6.28 North Miami 25,550,439 7.7% (22,327) 75,767 $5.15 South Central 13 652,555 6.9% 37,218 0 $6,03 South Dixie Hwv, 6.933,602 3.8% 52,493 56,000 $4.99 Southwest Dade 5,381,992 4.7% 70,489 543,035 $8.18 W. Miami/Coral Terr. 3,078,598 1.2% 7i ,400) 10,000 $7.50 Total 191.829,430 6.6% 1.497070 1.319,552 $6.02 Renewed consumer confidence, a modest economic recovery and increased productivity are just a few factors that aided the Miami-Dade Industrial market during the fourth quarter of 2004, Miami-Dade County continued to entice large investors, pension funds, and REITS to the area due to a stable leasing environment, constrained speculative construction, limited land, and low interest rates. Given the current economic conditions and the expected job growth for the area, the industrial market is expected to see a marked improvement, but will not reach the heights seen in the 1990's. ALTAIR APPRAISAL GROUP, INC. South Florida Regional Analysis 9 C) Palm Beach County Industrial Market The Palm Beach County industrial market contained a total inventory of 44,630,971 SF, The market coverage includes buildings of 10,000 SF and greater in size. The following chart summarizes their findings: I- Gross Vacancy Net Under A vg. Asking Sl,Ibmarket Building SF Rate Absorption Constructio Rent/SF NNN i-J n Boca Raton 8,410,16 6.2% (J ,090) 0 $8.01 Delray Beach 2,987,268 2.6% (3,334) 84,115 $5,95 BOYnton Beach/LantaIla 4,226,445 10,6% 65,376 17,000 $6.66 Lake. Worth 3,121,]95 1.9% (13,700) 0 $5,00 West Palm Beach 14,089,153 6.7% 142,268 297,355 $6,15 Riviera Beach 9.485.579 6.5% J 17,720 0 $5,21 Jupiter 2.311,165 5.8% (6,770) 80,000 $7.50 Total 44,630,97 J 5.6% 300,470 478,470 $6,35 Industrial owners, users and investors are looking to do business in Palm Beach County due to its stratcgic location coupled with the availability of large tracks of land and a high quality oflife. These characteristics appeal to companies looking to relocate. As Miami-Dade and Broward Counties devclop the few remaining sections of availablc land, growth will continue to push northward. Palm Beach County has the Atlantic Ocean to the east and the Everglades and its associated wetlands to the west. Unlike Miami-Dade and Broward Counties, the westcrn land will likely not be developed in the foreseeable future. Eventually, this will lead to a lack of supply that will crcate an even more competitive buying market. Sales in the industrial market have been strong as the demand for owner/user buildings outweighs the supply of buildings available for sale. Average industrial sale prices range from $55.00/SF to $65.00/SF for buildings ranging from 10,000 SF to 30,000 SF and $45.00/SF to $55.00/SF for buildings ranging ftom 30,000 SF to 100,000 SF. A major contributing factor to the sale demand is the historically low interest rates available to small businesses. There has been a migration of tenants leaving leased buildings to take advantage of their new purchasing power created by the low interest rates. For this reason, the warehouse condominium concept has worked well in the southern counties. ALTAIR APPRAISAL GROUP, INC. South Florida Regional Analysis 10 RETAIL MARKET The following is an overview of the South Florida retail market based on data from the Trammell Crow Company Market Scope as of Year-End 2003, This data does not include freestanding retail and most big-box users: County Inventorv (SF) Vacancv Broward 30,854,000 . 6,7% Miami-Dade 21,744,000 4.6% Palm Beach 2],284,000 5.3% II A) Broward County Retail Market The Broward County retail market contained a total inventory of 30,854,000 SF. The following chart summarizes their findings: Inventory Available Vacancy New Suppl)' Net Avg. Gross Submarket (SF) Space(SF) (SF) Absorption Rent (SF) Cooper City/ 5,470,000 49] ,000 9.0% ] ]2,000 337,000 $15.34 Pembroke Pines/ Miramar Coral Springs/ 7,699,000 555,000 7.2% 0 (93,000) $16,81 Man~ate Ft. Lauderdale 6,369 000 208,000 3,3% 208,000 167,000 $17.57 Pompano 6,008,000 365,000 6.1% 27,000 5,000 $15,22 Beach/Deerfield Beach Plantation/Sunrise/ 5,338,000 439,000 8.2% 0 61,000 $14.41 Tamarac Broward County 30,854,000 2,058,000 6.7% 347,000 '. 477 000 $15.74 The Broward County retail market currently encompasses just over 30.8 million square feet in community and neighborhood centers. During 2003, approximately 347,000 SF were added to the inventory, predominantly located in the southwestern portion of the county. The asking average net rental rate is $15.74/SF, up about 6% over the year-end 2002 estimate. At year-end 2003, vacant space in the county totaled just over two million square feet, exhibiting a vacancy rate of 6,7%, a 7% decrease from the previous year. Fort Lauderdale has the largest retail submarket with 7.6 million square feet; this submarket also has the largest amount of vacant space at 555,000 SF. The year-end vacancy rate is estimated at 7.2%, slightly higher than last year. The same is true for the southwestern Broward submarket which contains the cities of Cooper City, Pembroke Pines and Miramar. Residential growth is strong in this area, necessitating the development of new retail space. On a good note, the increase in the vacancy rate was small - from 2.7% to 3.3%. The highest asking net rental rate can be found in southwest Broward. In this subtnarket, the rate has increased by 6.5% to its year-end 2003 estimate of $17.57/SF. On the opposite end of the spectrum, the lowest rental rate is located in ALTAIR APPRAISAL GROUP, INC. South Florida Regional Analysis I] northeastern Broward within the areas of Pompano Beach and Deerfield Beach. Here, retail space can be rented on a net basis for an average of$I4.4J/SF. In Broward County overall, net absorption was positive for 2003. During that time, 477,000 SF were absorbed by the market. The majority of this absorption (377,000 SF) took place in Coral SpringslMargate. For the second consecutive year, Ft. Lauderdale was at the end of the list with absorption of negative 93,000 SF in 2003. B) Miami-Dade County Retail Market The Miami-Dade County retail market contained a total inventory of 2 1,744,000 SF. The follO\ving chart summarizes their findings: * Inventory A vaUable Vacancy New Supply Net Avg. Gross Submarket (SF) Space (SF) (SF) Absorption Rent (SF) Coral Gables/ 6,262,000 156,000 2.5% 296,000 338,000 $22.17 Kendall/Richmond Miami/Miami Beach 5,883,000 345,000 5.9% 0 (51,000) $21.1 8 Opa-LockaINorlandJ 3,554,000 126,000 3.5% 0 (51,000) $15.38 Hialeah South Dade 2,126,000 133,000 6.3% 15,000 42,000 $ J3.4 7 West Dade 3,919,000 238,000 6.1% 279,000 194,000 $19,61 Mjamj~Dade County 21,744,000 998,000 4,6% 590,000 574,000 . $19.20 Miami-Dade County contains upwards of 2 1.7 million square feet of retail space. The statistics indicate a rather positive picture for the county in 2003. The county exhibited the lowest vacancy rate in South Florida at 4.59%. The asking average net rental rate is estimated at $I920/SF, a 3.7% increase over the year-end 2002 ,figure, And finally net absorption is not possible, but on the rise; 574,000 SF were absorbed by the market throughout the year, an extraordinary 147% increase over the previous year. New supply of 590,000 SF was added to the Miami-Dade County inventory in 2003. The majority occurred either in Coral Gables/Kendall or in West Dade. Retail development was substantially more in 2003, marking a 264% increase over the 2002 estimate; that record pace is unlikely to repeat itself in the next year. C) Palm Beach Count), Retail Market The Palm Beach County retail market contained a total inventory of 2 I ,284,000 SF. The following chaIt summarizes their findings: Inventory A vaUable Vacancy New Supply Net Absorption A vg. Net Submarket (SF) Space (SF) (SF) (SF) Rent Boca Raton 5,629,000 303,000 5.4% 0 40,000 $21. I3 Boynton Beach 7,928,000 43,000 5,4% 480,000 546,000 $15,15 North Palm Beach/ 3,849,000 254,000 6,6% 67,000 1,000 $18,28 Jupiter West Palm Beach 3,878,000 146,000 3.8% 0 186,000 $16.54 Palm Beach County 21,284,000 1,133,000 5.3% 545,000 773,000 $17.63 AL T AIR APPRAISAL GROUP, INC. South Florida Regional Analysis 12 The retail market in Palm Beach County is the smallest in South Florida with 21.3 million square feet; almost one third of that space is located in the central area of the county in Boynton Beach. As of year-end 2003, the county's vacancy rate is 5.32%, a drop of almost 20% from the year-end 2002 estimate. Conversely, the asking average of net rental rate has gone up by 6% to $17.63/SF. New supply was significant in Palm Beach County with 545,000 SF added during the year. This figure represents a 67% increase over 2032. Palm Beach County recorded the leading net absorption figure in South Florida with 773,000 SF absorbed by the market;! not surprisingly, the majority was located in Boynton Beach. HOSPITALITY MARKET II According to the Hospitality Research Report by Marcus & Millichap for Fall, 2004, annual Occupancy will increase to 63.8 percent this coming year, an additional 150 base point increase in occupancy is forecast for 2005. The per room rates will continue to increase in most markets. Almost three-quarters of Corporate travel managers expect to book more hotel nights over this next year. Aresurgence in international travel, with a total revenue for passenger miles is forecast to increase 3.5 percent for this next year. Heavy construction is expected in the upscale and upper-upscale segments, for an overall construction of another 28,000 rooms. Fort Lauderdale During the first half of 2004, 12 properties traded with a median price per room of $66,750. Market fundamentals, as with most of Florida, are making a strong comeback. New development will come ,at a predictable pace that will roughly equal demand for new rooms. Current forecasts call for a total of 2, I 00 new rooms from 2005 through 2007 with demand trailing at 1,900 rooms. Miami The recreational, cultural and political significance of Miami has helped the hospitality industry be an early beneficiary of the recovery. Demand for 1, 400 new rooms th is year, together with new construction of only 331, will elevate annual average Occupancy by 250 basis points to 67 percent by 2004 year end. The median price per room has been steadily rising and llas topped at $60,000. Infonnation provided by the Greater Fort Lauderdale Convention & Visitors Bureau indicated the January~December 2004 Greater Ft. Lauderdale Annual Average Occupancy at 73.4% (up 8.2% from the previous year), and the January-December 2003 Greater Ft. Lauderdale Annual Average Occupancy at 67.8% (up 4.1 % from the previolls year), and the January-December 2002 Greater Ft. Lauderdale Annual Average Occupancy at 65.] % (down 1.8% from the previous year). , , ALTAIR APPRAISAL GROUP, INC. South Florida Regional Analysis 13 MULTIHOUSING (APARTMENT) MARKET The Marcus & Millichap Apartment Research Report from October 2004 for South Florida's marketplace indicates vibrancy in 2005. Median prices were up throughout the region and fundamentals were healthy. Construction levels remained elevated enough to push vacancies somcwhat higher. Owners in West Palm Beach and Miami were offering concessions to combat higher vacancies, but otherwise rent growth is helping to stabilize revenues. The market forecast caIls for vacancy to peak ill 2004 and wane tllereafter, and rent growth to persist, indicating an attractive investment market that will propel asset appreciation. ~ Developers expect to deliver 6,700 units to the South Florida market in 2004; in 2005, construction activity to decelerate to less than 6,000 units. While development activity was evenly split among the three counties in 2003, construction levels are expected to decline more rapidly in Ft. Lauderdale in 2004, placing the bulk of the new units in Miami or West Palm Beach. Multi-family residential development is occurring in Ft. Lauderdale, but condominiums are set to dominate the construction pipeline in 2004. Vacancy is forecast to rise by 20 basis points by year end, to 7.2 per cent regionally, the county breakdown shows Miami to increase by 30 basis points to 6,8 percent, Palm Beach to increase by 20 basis points to 10 per cent, however; this is due to Palm Beach being the focal point of construction over the last decade, Broward County shows only a minor 10 basis point increase, to 5.4 percent. This is partially attributable to rentcrs being able to make the leap from renting to owning with the help of low interest rates. Asking tents in South Florida are forecast to grow 2 per cent by the end of 2004 to $980 per month; as a result of high renter demand in submarkets such as Oakland Park, Pompano Beach and Plantation, owners arc expected to cut concession to less than 5 percent of asking rents by the end of 2004. Despite an increase in 2004, apartment vacancy remains ncar the national average, and accelerated job growth over the next few years is likely help reverse this trend. The region-wide median price per unit sold to date 2004 was $68,000, up from $63,000 in 2003. South Florida remains a solid bet for multi-family investment. Construction has been steady, but consistent population and employment growth have kept absorption strong and prevented vacancy from increasing significantly. Solid fundamentals will continue to draw capital to the local multi-family market. AL TAIR APPRAISAL GROUP, JNC. South Florida Regional Analysis 14 HOUSING STARTS ~ Iiistorically one of Florida's strongest sectors of the economy, construction was on a rapid dov,'Ilslide during the recession, which began in mid 1990 and ended 1992. As a result of Hurricane Andrew in 1994, the construction of new homes increased dramaticalIy. Many of the Miami-Dade County residents that were within the path of the hurricane relocated to Broward County, This resulted in increased construction in the southern and southwestern areas of Broward County. 'At present due to the lowest intcrest rates in many yea" residential activity is booming and housing starts are up The following is a summary of total new building starts for the South Florida tri-county market following by a 5-year history for each of the 3 counties: County BUildine Starts Permits Issued Broward 11,006 12,020 Miami-Dade 12,253 14,233 Palm Beach 12,948 13,052 B,-oward County Building Sta,"ts 1 I ] 0 000 '>l"":-~~~, "", '.. .:. ~ J 1:: ~; .B 8,000 It. C/) 6,000" t)J) ~ 4,000 = 2,000, Q:l 0 OSingle Family 1l!I_~Family 1998 1999 2000 2001 2002 Year -------" .~-- ----.---.-..-.-..----.. Source: Florida Research & Economic Database f--' . I I I ! I I I II> ..... I., tIl ..... fJ'J t)J) C ..... :5! 'S = '-.--.---'---.----..,.-------- I .Miami~Dade County Building Starts I ! i I WI Single FamilYjl1 'I!!JMul'i-Family I -_.J 19981999200020012002 Year L Source: Florida Research & Economic Database . . ALTAIR APPRAISAL GROUP,INC. South Florida Regional Analysis 15 ~ I ~ OIl .5 :s .; CQ Palm Beach County Building Starts " i [J Single Family I /- Multi-Fami2J 1998 1999 2000 2001 2002 \\ Year Source: Florida Research & Economic Database ~._----- ----.----....-.----.....-- TRANSPORT A TION South Florida has an adequate transportation system anchored by V.S. highways and three airports. The following are Year-End 2003 statistics relating to the regions three major airports: Total Passengers Domestic Passengers International Passengers Air Carrier Operations - Cargo General Aviation & Other Operations Ft. LauderdalelHlwd. International 17,938,046 ] 6,606,567 1,331,479 172,491 287,593 Miami International 29,595,618 15,739,247 13,856,371 380,798 417,423 Palm Beach International 6,010,820 N/A N/A 66,193 105,459 A) Broward County enjoys excellent automotive accessibility to both its residents and its neighbors from Palm Beach County and Dade County. North/south access to the central corridor of the county is attained via Florida's Turnpike, State Road 7 (V,S, 441) and University Drive. North/south access to the western corridor of the county is achieved via Interstate 75, the Sawgrass Expressway and Flamingo Road in the southern portion of the county and Pine Island Road and Coral Ridge Road in the northern portion. North/south access to the eastern corridor of the county is achieved via Interstate 95, Dixie Highway, Federal Highway (V.S. 1) and State Road AlA. East/west access in the northern portion of the county is attained via HilIsboro Boulevard, Southwest 10th Street, Sample Road, Copans Road, At/antic Boulevard, McNab Road, Commercial Boulevard and Oakland Park Boulevard. East/west access in the southern portion of the county is attained via Sunrise Boulevard, Broward Boulevard, State Road 84, Interstate 595, Griffin Road, Stirling Road, Sheridan Street, Hollywood Boulevard, Pembroke Road and Hallandale Beach Boulevard. Broward County is currently engaged in repairing and expanding its major roadways as its population steadily increases. ALTAIR APPRAISAL GROUP, INC. South Florida Regional Analysis J6 Additional fomls of transportation include buses and the Tri-Rail, which allow for uncomplicated travel to both Dade County and Palm Beach County. Broward County a~so has four airports. Fort Lauderdale/Hollywood International Airport is the major airport in the county. It is located just east of Interstate 95, between Interstate 595 and New Griffin Road. Other airports within the county include the Pompano Beach Airpark, the City of Fort Lauderdale Executive Airport and the North Peny Airport in Pembroke Pines. ~ Broward County is also the home of Port Everglades. Port Everglades incorporates approximately 2, I 00 acres with 300 acres of open storage, within the cities of Fort Lauderdale, Dania and Hollywood. The composition of the 'area primarily consists of industrial and office space, with the majority aSsociated with boating and shipping. Port Everglades has grown to become one of South Florida's strongest economic Sources with annual operating revenues of nearly $65 million and total waterborne commerce exceeding 20 million tons of liquid, bulk and containerized cargoes. More than 5,500 ships call at Port Everglades in a year fonlling the basis of a divcrsc maritime operation that includes a thriving cruise industry and a reputation as the "world's best cruise port", a growing containerized cargo business that establishes P0I1 Everglades among the nation's top seaports, a major petroleum storage and distribution hub, South Florida's primary bulk cargo depot and a favorite US Navy liberty port. Port Everglades is divided into three areas of operation, Southport, Midport and Northport. The Southport area is used primarily for cargo operations with a focus on lift- on/lift-off containerized operations and roll-on/roll-off services. Midport provides cruise berthing, cargo facilities, military vessel berthing and smaller lay-in spaces. Northport primarily handles cruise operations and liquid bulk unloading, wi,th miscellaneous other cargo operations. Port Everglades is considered one of the nation's most convenient cruise ports due to the location of the Fort Lauderdale/Hollywood International Airport. All of the Port's cruise terminals and parking garages are located in Northport and Midport. There is a total of 137,901 SF of cruise terminal area and 212,729 SF of baggage handling area. Parking is very convenient with a 2,500-space parking garage located in the Northport section and a I,OOO-space parking garage located in the Midport section that is scheduled for expansion. Port Everglades provides a full range of facilities and services for the cargo shipping industry. To accommodate the wide variety of cargoes that move through the seaport, Port Everglades' various storage facilities range from tank farms and silos to dockside transit cargo terminals and open storage yards. Refrigerated containers are kept cold by individual built-in motors that plug into electric outlets known as "reefer" outlets which are located throughout the seaport. There is also a large refrigerated warehouse near the docks and a convenient foreign trade zone with US Customs protected warehouSing to encourage imports and exports. , , ALTAIR APPRAISAL GROUP, INC. South Florida Regional Analysis 17 B) Miami-Dade County offers easy automotive accessibility to both its residents and its neighbors from Broward County and Palm Beach County. North/south access is via INterstate 95, Florida's Turnpike, Palmetto Expressway, US Highway I, State Road 7 (US 441), State Road 823 (Red Road), State Road 9 (27th Avenue), Miami Avenue, and Dixie Highway, East/west access in the northern portion of the county is via Ives Dairy Road, Miami Gardens Drive, Golden Glades Drive, 135th S Ireel, 125 th S'rect, I I 9th Street, 103rd Street, 79th Street, State Road 944 (54th Street), the Airport Expressway, US Highway 27, the Dolphin Expressway, Flagler Street, and Tamiami Trail. ~ East/west access in the southern portion of the county is via Coral Way, Bird Road, Miller Drive, Sunset Drive, Kendall Drive, Southwest I04th Street, Killian Drive, Coral Reef Drive, Eureka Drive, Caribbean Boulevard, and Coconut Palm Drive. Miami-Dade County is currently engaged in repairing and expanding its major roadways as its population steadily increases. Additional forms of transportation include buses and the Tri~Rail, which makes travel to both Palm Beach and Broward Counties very easy. Mass transportation also includes the MetroraiJ, a 21-mile elevated rail transportation system. This system has 20 Slations that link the downtown Miami area to the nearby suburbs. Future expansion projects include expansion to the northern portion of the County. Joining the Metrorail is the Metromover system. This is a system of elevated rubber-wheeled cars, which are nllly computerized and designed to carry downtown workers and SllOppers around the city of Miami. Future expansion plans are to expand the system to the Brickell and Omni Extensions. In addition, Miami-Dade County also has three airports and a major port. Miami International Airport is the major airpOli in the county. It is located'just west ofInterstate . 95 between State Road 948 (Northwest 36th Street) and the Dolphin Expressway. Miami International Airport ranks first with regard to intemationaI operations. It ranks fifth in regard to domestic cargo shipments and is the tenth busiest for passenger traffic. It is served by over 140 airlines, which is more than any other in the country. Other airports within the county include the Opa~Locka Airport and the Kendall-Tamiami Executive Airport. The Port of Miami is the southernmost port in the United States and the world's busiest passenger port with over three million travelers per year. . . ALTAIR APPRAISAL GROUP, INC, South Florida Regional Analysis 18 ~ C) Palm Beach County contains easy automotive accessibility to both its residents and its neighbors from Broward County and Dade County. North/south access is attained via Interstate 95, Florida's Turnpike, U.S. I, State Road 7 (U.S. 441), Dixie Highway, A-I-A, Military Trail, Congress A venue and PowerJine (Jog) Road. East/west access in the northern portion of the county is attained via PGA Boulevard, Northlake Boulevard, 45th Street, Okeechobee Boulevard, Belvedere Road, Southern Boulevard, Forest Hill Boulevard and 10tl1 Avenue. EasUwest access in the southern portion of the county is attained via Lake Worth Road, Lantana Road, Hypdluxo Road, Boynton Beach Boulevard, Atlantic A venue, Linton Boulevard, Yamato Road, Glades Road and. Palmetto Park Road. Palm Beach County is currently eng9ged in the repairing and expansion of its major roadways as its population steadily increases. Additional fonus of transportation include buses and the Tri-Rail, which makes travel to both Dade and Broward Counties very convenient. Palm Beach County also has three airports and a major port. Palm Beach International Airport is the major airport in the county. It is located just west of Interstate 95 between Belvedere Road and Southern Boulevard, Other airports within the county include the Palm Beach County Airport and the Boca Raton Airport. The Port of Palm Beach reports exports of approximately 1,883,299 short tons and imports of roughly I ,568, I 71 short tons per year. Income from the Port increased from $2 million to $5 million in the last five years. GOVERNMENT INFLUENCES A) Broward County influences development primarily through traditional methods of planning, zoning and a Comprehensive Plan. In 1985, Dade, Broward and Palm Beach Counties implemented the State Growth Management Act, also known as "Concurrency". Concurrency provisions require that before any new construction"can be approved, the infrastructure must be in place to provide for the necessary public services that accompany the development. Essentially, concurrency requires that public services, including roads, sanitary sewers, solid waste, drainage, potable water, mass transit and parks and recreation be made available to alleviate the impacts of a project as those impacts occur and that new projects not reduce established levels of services for facilities. Concurrency for mass transit is only required in larger governmental jurisdictions. B) Miami-Dade County is a chartered government county with a manager fonu of government. The system, known as metro government, is unique to only one otller county in Florida, Jacksonville-Duval County. It is an attempt to centralize and Coordinate governmental activity and is enacted in a modified two-tier system. The upper tier perfonus county and metropolitan functions and coordinates with the lower tier at the city government level. Unincorporated areas are served by the upper tier. Miami-Dade County has a nine member elected county commission, which includes the mayor. The county commission appoints the county manager. Additional elected offices are those of state attorney, public defender, clerk of the court, and school board members. The Miami-Dade County judicial system is part of the Third District Court of Appeal ALTAIR APPRAISAL GROUP, INC. South Florida Regional Analysis 19 serving two counties with nine judges and the eleventh circuit court serving one county with 65 judges. * Miami-Dade County influences development primarily through traditional methods of planning, zoning, and a Comprehensive Plan, A recent development is the State Growth Management Act, also known as "ConculTency." Concurrency provisions require that, before any new construction can be approved, the infrastructure must be in place to provide for the necessary public services that accompany the development. Concurrency requires that public services, including roads, sanitary sewers, solid waste, drainage, potable water, mass transit, and parks and recreation be made available to alleviate the impacts of a project as those impacts OCcur and that these n'ew projects do not reduce established levels of services. Concurrency for mass transit is only required in larger governmental jurisdictions. C) Palm Beach County influenccs developmcnt primarily through traditional methods of planning, zoning and a Comprehensive Plan. A recent development is the State Growth Management Act, also known as "Concurrency". Concurrency provisions require that before any new construction can be approved the infrastructure must be in place to provide for the necessary public services that accompany the development. Essentially, concurrency requires that public services, including roads, sanitary sewers, solid waste, drainage, potable water, mass transit and parks and recreation be made available to alleviate the impacts of a project as those impacts occur and that new projects not reduce established levels of services for facilities. Concurrency for mass transit is only required in larger governmental jurisdictions. Each county is to establish levels of service standards and implement their own concurrency plan. For example, to control development in Palm Beach County, based on road capacity, officials have designated deferral zones that outline areas within a one- mile radius around over-capacity roadways and affected areas of development. If a site is located within a deferral area, then future development could be delayed or prohibited until the systems within the area meet the capacity requirements. SERVICES Police & Fire Protection The cities in South Florida either have their own police or contracted police services through the Sheriffs Office. Most cities have their own fire protection services. Those who do not are usually a part of the county-wide system. Police and fire protection within South Florida are considered adequate. Utilities Electricity for South Florida is provided by Florida Power and Light. Telephone service is provided by Bell South. Water, sewage disposal, and trash disposal (where available) are usually the responsibility of the municipalities, although there are a number of overlapping jurisdictions. There are also several private utility companies within the counties. ALTAIR APPRAISAL GROUP, INC. South Florida Regional Analysis 20 Medical Services The health care system of South Florida has expanded significantly during the last 15 years. This growth has generally reflected influences present throughout the County. These forces are basically rapid population increases, large seasonal population fluctuations, and a shifting of the County's age distribution. Additionally, the enactment of the Medicaid legislation, along with the expansion of third party payment mechanisms, have further increased the demand for health services by . lowering the price consumers pay directly for care. There are numerous hospitals" and personal care facilities throughout the tri-county area. The University of Miami School of Medicine in Miami- Dade County is a leading research center in the southeast United States. ~ Communications The South Florida market contains numerous radio stations, local. television stations, cable television firms, daily newspapers, and a variety of weekly community papers. Education South Florida's education system includes public and private institutions from the primary grades to the college level. Miami-Dade County is the fourth largest school district in the country, exceeded only by New York, Los Angeles, and Chicago. Universities in South Florida include the University of Miami, Florida International University, Florida Atlantic University, Nova Southeastern, Broward County Community College, Miami-Dade Community College and Palm Beach Community College. The University of Miami is the largest private university in the southeast. Florida International University is the largest public university in South Florida. BUSINESS ADV ANT AGES Florida is a "right-to-work" state with favorable tax structure, training programs and financial inducements to encourage business investment. Nationwide, Florida is ranked as having the fourth lowest tax burden with no personal income tax and low corporate, sales and property taxes. Financial benefits are also obtained through incentives, including various tax abatements, credits or exemptions, as well as Federal job training subsidy and low interest revenue bonds. Labor training is provided thr~)Ugh federal, state and county incentive programs offering income tax credits job training or training grants. Vocational and occupational training is available in Broward County, Miami-Dade County and Palm Beach County through a wide range of programs and institutions. ALTAIR APPRAISAL GROUP, INC, South Florida Regional Analysis 2J SPORTS AND ENTERTAINMENT ~ S.outh Florida, among other things, is the home of several professional-sporting events. The NBA's Miami Heat play in the new American Airlines Arena in Miami-Dade County while the NHL's Florida Panthers play in the National Car Rental Center and the NFL's Miami Dolphins and MLB Florida Marlins play at Pro Player Stadium in Broward County. The Senior PGA Tour stops in Palm Beach Gardens at PGA National for the Senior PGA Championships. The Montreal Expos hold'ispring training every year at Municipal Stadium in West Palm Beach. The Expos Single-A team plays in the stadium during the regular season. Other forms of entertainment include Jai Alai, dog racing, various polo matches, equestrian events and boat shows. South Florida is also the home of a number of public and private golf and tennis facilities. SUMMARY The inevitability of limited developable land area and of drinking water is becoming a major concern and, thus, land values are expected to generally increase in economic value due to scarcity. With a diversifying economy, improved transportation facilities and corridors and a beginning effort toward bringing the arts and cultural amenities to South Florida, Broward, Miami~Dade and Palm Beach Counties are perceived as a desirable location for many people. The environment is relatively clean, taxes are low and housing is available. ALTAIR APPRAISAL GROUP, INC. II SITE PLAN . . f ~~BJjf I pl!H' " I, * ~ ~; z is ..J 5 lO ~ Z ::l .n z ~ ir; -' UJ ~ ... z :il r.. u. ~ ~f ::e i5 U -' 5 ~ <0 1-. r...1 :;: ::> t:Cl ..n ~ - .;., -<l ... z I UJ ~ in I- :t: ~ of ~ f II ri' 'j ~ ~ s., I g 68. I ~" .!2 Is I ~~181fl ,1, II g c: ,2 '6 o .9 ~ .. 2 2 ~ Ii- I I I I J J ~ ;1 llil I j t~ J I I I J__ I ~ --./ i~rl r B I (tB ~..~ --... n '" " 11 '\Pt>OlJ uo:u<o& j503 aZeS1U UOSJO ~-----:::,.,:"..;;.=:::o~ i~~ J~!' ; ~.~ o 8 f 11 .. ~'r I.J 6i ~Ba ., J I ~b--.t ~- I I I f I i , IS if o I :z " r I ,. I I Ilf j J I I f ~r , ~~:l ~ PROJECT COST ANALYSIS CONSOLI DA TfON TOTAL UNITS OCEAN BREEZE WEST PARCEL A (TOWNHOUSES - FEE SIMPLE) TYPICAL UNIT 1_, 51763 TOTALS f______ HARD COSTS 92,509.70 66.13 41% 3,422,859 SITE DEV 17,751.46 12.69 8% 656,804 SOFT COSTS 37,815,92 27.03 17% 1,399,189 LAND 75,987.64 54.32 34% 2,811,543 224,064.72 160.16 100% 8,290,;395 GROSS PROFIT WEST 55,835.28 39.91 20% 2,065,905 -. 10,356,300 II OCEAN BREEZE EAST PARCEL 8 (TOWNHOUSES - FEE SIMPLE) TYPIC/'lL UNIT SO FT 1399 INCOME SALES # UNITS 47 4.39 ACRES UNfTS/ACRE 10,71 65753 PER UNIT PER SQ FT TOT AlS [,-_.. HARD COSTS 92,509,70 66.13 41% 4,347,956 SITE DEV 17.751.46 12.69 8% 834,319 SOFT COSTS 37.815,92 27.03 17% 1,777,348 LAND 75,987.64 54.32 34% 3,571,419 224,064,72 1 60. 1 6 100% 10,531,042 GROSS PROFIT EAST 71,579.96 51.17 24% 3,364.258 295,645 211.33 13,895,300 COSTS TOTAL SALES 287,772 24,251.600 TOTAL COST l~~IVll:JINED GROSS PROFIT . . 18,821,437 22% 5,430,163 PRELIMINARY PROJECTIONS ACQU PER LOAN EQUITY AND TOTAL SF UNIT BASIS BASIS - ISITION 6.] 00,000 72,6]9 4.575,000 1.525.000 LlMlSC CLOSING ]22,000 1.452 LD TAXES 81,729' 973 - BANKlETC, LAND/SOFT 34.787 414 BANKffiTC, DEVELOPMENT 5,592 67 BANK/ETe - CONSTR REVOLVER 38.854 282,962 463 212,221 ~0.740 SUB TOTALS 6,382,962 75.988 i 4,787,221 ],595,740 54 75,988 - MMISSIONS/HBW 522,802 6,224 ISTRATION (BUILDER'S FEE) 274,858 3,272 .. /ACCOONTING 50,000 595 LAN APPROVAL PH (Phase lIne in 70,300 837 STRUCTURAL ENGlN/PLANNING 120.000 1.429 ANCE 40,000 476 OPMENT FEES 76,406 910 X 35,000 417 IATION 25,000 298 ETfNG 242,516 2,887 EST (A&D/LAND) ONSTlWCTION REV) QUITY /MEZZ) TOTAL INTEREST 1.624,358 J9,338 01'1'1' @ 3% 95.296 1,134 TALS 3,176,537 27 37.816 1,990,30] 331,717 i UNIT COUNT 84 INTEHEST ASSUMPTION 8,00% HARD COST. L ---- 2 lEGA " 3 UNPA 4 FEES FEES - FEES, SOFT COST 5 RE,CO 6 ADMIN 7 LEGAL SITE P 1\ Lund) 9 AHCH/ 10 INSUR , I DEVEL /2 R.ETA 13 ASSDC J <I MARK 15 INTER (C (E M]SC/C SUB TO HArm C - . -- MINARY PROJECTIONS CONT'D - OSTS . CONSTRUCTION SF I~Q FT/UNIT - 1399 SQ fT AVERAGE 7,770,815 66 92,510 ~OST - SITE WORK SITE WORK/SAN SEWER (Includes Offsitc) !I PHASE I 537.509' 14,527 PHASE I1 634,134 13.492 TOTAL 1,171,643 ]3,948 Landscape & MitlIrrigation/Sile Walls/Sile Grade PHASE r 92,500 2,500 PHASE lJ J 17,500 2,500 TOTAL 210,000 2,500 PERMITS 9,480 113 SUB TOTAL 1,391,123 BONDING COJ\TTINGENCY ] 00,000 l.lyo (BAD SOIL - ETC.) - , I SITE WORK/SAN SEWER TOTAL 1,491,123 13 17,751 1,118,342 372.78 I - , /7,751 UNIT COST 18,821,437 160 224,065 7,895,865 2,300,238 I FlueU -~ BAlm'L 1 6/ 1 6t-\ ~ 16B 17 18 19 20 TOTAL lNCOJVIE TOTAL UNIT SALES 24,251,600 288,710 TOTAL SALES 24,251,600 -IQ]'AL PROFIT PER UNIT TOTAL ESTIMATED PROFlT 64,645 5,430,163 . . PRELIMINARY PRICE SHEET SF Phase I DO! $ 249,900 x 0 $0 0 10 0% $ 259,900 x 0 $0 0 0% $ 269,900 x 0 $0 0 44% $ 279,900 x 37 ilQ,.356.300 51763 44% 37 $10,356.300 $279,900 51763 TSFA Phase II 24% $ 289,900 x 20 $5,798,000 27980 32% $ 299,900 x 27 ~O97.300 37773 ~ 56% 47 $13,895.300 $295.645 65753 TSFB $287,772 AVG 117516 TSF ~ SKETCH , . r , , , I i,tJ L T i )1 Hr.' ~ , i ' ,. V ,_ I! , I . d."., J, , :,--l-..--1': r::.....: :..:'~:l;- ~ ";. ;' roo", '. ';;/ii': :".: ('.~- ~)fl ...~~:.:.~~ . ,............. /1. .( I. ~ !, ., '~'.~ :1 .~ ..~ .~ ;i .'. ~~ ; ~' i :. ,!, : ~ , , li." . ~ ,: ~ h ,HHUHr!lU ! r.: , ,. ,~, :,1' ~';i ...., ~'~:. :~i,~ ~~~.~ '::.',': -',;: ;:.:,;~ ';":: ;:;~.;, I ; ~J! ~1! I i 1 -r-'''':'''' 'II'" ,:')1.). :,',: 'I' I';, - i,; ~ ~ !;j li \ . ,: .:,! .. ~~'-'''"' u...--,...:........_ i-'- ;",-, I I' . 'r- l' "';"':':~"':3 .~~~:' . -/_. J.:I:JNJ5 J9 IN ::r,o /:;~ ..~: r!- - ~t (/P=t~w::- t, !~I I ,- i,'; I ~. . I 1 - !.:.: 1 . ' f ;)~, ::;j I I _L ?~ ! .,:, ." 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GN:.^C",= l.-MU::; r.w., 1(1;(1~' : I , , I - -~.. ......- ",-,.sra ~FC'WVf'" I<' .'6' oeor.....'X"\t #~ OEt'tDv'),j 'O',l':I:i.' ~2 10':<1(1' p"uwr B6c S~ Arc " LEGAL DESCRIPTION r r ~ OCSO?PTKJN: A PORTION OF aOCK C OF TfoE PLAT OF BOYNTON rLLS. BOYNTON BEACH. PALM BCAQ-f COUffY. fl.ORDA, ACCCR()I\K; TO TJ-E R..A T T/-CREOF AS RECORIJED N PLA T 9X!< 4, PAGe 51 iT TI-E Pf.BI../C RECORDS OF PALM BCACH COUflY. FLORDA. DCSCRJ3Eo AS FQLOWS' CCJM.ENrI AT TI-E: /-oKJRTfEAST CORfoER CT LOT 147 OF SAD BLOCK C: TfENCE SOUTH (As:su.EV). ALO\U n-c EAST LN; OF SAD LOT 147, A DISTANCE OF 2QOO FEU TO TIE PavT OF BCCMIIIG; 71-eICE: CCXVTl>U:SOUTH, ALONG TI-E cAST L/€ OF SAD BLOCK c: 228..36 FEn TO TfE SOUTI-E:AST COIirER OF LOT 134 OF S4D BLOCK C; TI-EM::C WEST, ALOM; TI-E SOUTH LI€ OF SAD LOT 134. A OfSTAIa OF 100 FEET TO TfoE EAST LIIE OF LOTS 05 AN) 1J6 OF'SAD aOCl< C: TrCNCE SOUTH, ALONG SAD EAST LN: AMJ TIE SOI..I17-efL. y PROLONGA TION TfERfXJf; 189.19 FEET TO TIE CENTERL1-E OF GRANJ CIfCLE 'W; 8E:I'IG A ClRVF CCWCA \IE" SOl./THWE.. STE:RL Y HA 10m A RAOY$ ex:- 59165 FEET, (A LfoE RAJJiAL TO S4D aRVC BeARS N.41"04'57"E:) TICNCE NOR71-E:Rt.. Y, ALONG TI-E ARC OF SAD a.R\IE 5.02 FEer 7rROUGH A CCNTRAl ANGLE OF O"291t' TO THi MERSECTKJN WITH TfE MJRTI-ERL Y FRoLavcA TION ex:- TI-C EAST LIC ex:- LOT l29 OF SAD Fl..0CI< c: (A LfIIE RADIAL TO SAD QRVC AT TI-E SAD PO/Iff OF NTERSE<.Cn:JN BeARS N.40..J5'467::,); 71ENCE SOlITH. ALONG 77-E SAD NC:X?T1€Rt.. Y PROLONGATION OF 't1-E: EAST L~ OF LOT 129. A ClSTANCE or 57.60 FttT TO n-c SCUTI-E'AST COR/IER OF SAD LOT 129; TI-ENCE WEST. ALONG 77-E SOUTH LIC OF SJfJ!J LOT 729 AMJ TfE SOUTH A/tD TIE SOUTH LN: OF LOT 12& A lJISTAIa OF lSO.OO rcH TO n-c WEST UC OF SAD LOT 12&- TfEM:E NORTH. ALOfoK; SAD WE'ST Ln:. 15.00 FEET TO TIE SOUTH LIC or LOTS 127 AN) 126 OF' SAD 8L0Q< Q rfENCE WEST. ALONG TI-E SAD SOUTH LNE OF LOTS 127 Af'IJ 12& A 1JISTAJtK:E OF' 100.00 FEET TO T1-E m:ST U'E OF SAD LOT 126: THiNCE foKRTff. ALO\G SAD WEST ~ 45.00 FEET TO 17E SOUTH LfoE OF LOTS 124 ANJ 12J OF SAD E:l.OCK C; TJ-ENC! ~T; ALCNC S4D SOl.ITF-I LItE, 0000 FEEI TO TIE IW;ST l.Iol; OF SAD LOT 72J; nea NORTff. ALCN; SAD IiEST LIE A/I() THE: fIKlfTTl-ERt. Y PROLONGA TKJN . TlEREOF; 19.J.23 FEET TO TIE ~CTKJN WffH TfE Hf'STD;ty PRa.:ONGA.T/CrII CF TbE SOlITH LIrE OF LOT 141 OF SAD ~()Q( a- TI-ENCE /Il7(i046'35T.. ALONG SAD WESTER[, Y PROLOM:ATICW. 157.99 FEET TO TIE wm LIC OF SAD LOT 14t TfENCE: NORTH. ALCNJ SAD Hf'sr LIIE. t)l25 FFET TO TrE MJRTH L/'C CF SAD LOT 14t rraa N.8Jorr55t~ ALCJM; TfE NJRTH LIrE CF SAD LOTS 141 AAD '42 OF SAD EJL<XK C. A OISTAJa OF 75.51 FEn TO A LI\E 25 FEET WE'ST OF /w) PARALLa. WITH n-c WEST UE OF l.OT 150 OF .SAD GLOCK c: TI-ENCE NCX?TH. ALCN; SAD PARALLEL u.c. 9244 FEET TO T1-E NORTH LfoE OF LOTS t5o, 149, 148 AN) 147 OF SAD aOCK Q TfENCE EAST, ALCN; SAD MJRTH /.lIE, 20.5.00 FEET TO T1€ 8C~ OF A ClRVC CO\C'AI-F SOl.IT1-frfE:STERt.. Y HA t.1'.K; A RADUS OF 20.00 FEET /W} A CENTRAL. ANGLe" OF 90"00'oeJ'; 77-ENCE SOI.JTfEASTERL Y. MOM; TI-E ARC OF SAOctRlIE 3Z42 fTtT TO TI-E PONT OF BEG/INIK; AF"ORD:JESCRBED. =-) F':'~" 'DESCRPTION PARCEL l- LOTS 1 TH?OUGH 12, NCLUSIVE. 8!..OCI< ~ PALM BEACH COUNTRY aUB ESTATES, ACCORDING TO THE PLA T THEREOF AS RECORDED NPLA T BOOK 11, PAGE 43, PUBLIC RECORDS OF PALM BEACH 'COiJVTY, FLORIOA, AM) THE SOUTH HALF (S.V2) OF THE EAST f/4LF(E.V2) OF LOT.?, SU8DlVlSION OF THE WtST HALF (W.V2) CJF'THE SOUTHEAST QUARTER (SEV4) OF SECTION 2l TOWNSHIP '45.;SOUTH, RANGE 43 EAST, ACCORDiNG TO THE PLA T THEREOF A'SjtECOROED N PLA T BOOl< ~ PAGE 4, PUBLIC RECORDS OF PALM l3EA'cti COUNTY, FLORI{)A, LESS THE SOUTH 125 FEET, THEREOF Afi/):.LESS TI-E RIGHT OF WAY FOR SEACREST BOULEVARD AS 'SHr!JWN ON ROAD PLA T BOOK 5, PAGE 182, PUBLIC RECORDS OF -PALM BEACH COUNTY, FI.. ORDA. ~ QUALIFICATIONS OF APPRAISERS , , QUALIFICATIONS OF WARREN L. \\lHEELER BUSINESS ADDRESS Altair Appraisal Group, Ine, 2141 Blount Road Pompano Beach, FL 33069 Telephone: 954,934,0190 Fax: 954.337.0534 EDUCA TJON University of Maryland -- Associate of Arts - General Education University of South Florida -- Bachelor of Arts - Interdisciplinary Social Sciences II Appraisal-related courses: The Aopraisal Institute: Real Estate Appraisal Principles Basic Valuation Procedures Capitalization Theory and Techniques, Part 1 Capitalization Theory and Techniques, Part 2 Case Studies in real Estate Valuation Valuation Analysis and Report Writing Market Analysis Standards of Professional Practice EXPERIENCE Current: President, Altair Appraisal Group, lnc, 1999-2003 Appraisal Manager Consolidated Appraisal Services, Inc. Margate, Florida 1995 - 1999 Senior Commercial Appraiser Pardue, Heid, Church, Smith & Waller of So. Fla., Inc./Primis Inc. Deerfield Beach, Florida 1991 - 1995 Senior Appraiser Consolidated Appraisal Services, lnc, Fort Lauderdale, Florida 1988 - 1991 Commercial Appraiser Roc, Westberry & Associates Fort Lauderdale, Florida 1986 - 1988 Senior Consultant Laventhol & Horwath Tampa, Florida 1984 - 1986 Appraisal Associate Appraisal Market Research, Inc, Tampa, Florida TYPES OF PROPERTIES APPRAISED: Apartments Office Buildings Shopping Centers Warehouses Industrial Buildings Hotels Adult Congregate Living Facilities Hospitals Residential Subdivisions Single Family Homes LICENSES State Certified General Appraiscr #RZ 953 . . LEE ANN WILLIAMS Lee Williams is employed by Altair Appraisal Group, appraisers, review appraisers, and e0l1S1Iltffilts, wilh offices located in Pompano Beach, Florida. Ms. Williams has bccn a residcnt of southeast rIorida for 35 years and has been appraising real property throughout South Florida, but predominantly in Broward, Miami-Dade and Palm Bcach Counties. PROFESSIONAL QUALIFICATIONS: Florida Real Estate Appraisal Board State Certified Gcncral Rcal Estatc Appraiser No. 0000454 APPRAISAL EXPERIENCE: August 2003-present - Senior Commercial Appraiser Altair Appraisal Group, Pompano Beach, FI II September 2002- August 2003 - Senior Commercial Appraiser Consolidated Appraisal Services, Margate, Ff April 1992- September 2002 - Commercial Slaff Appmiscr Danncr Rcal Estate Consultants, Inc" Ft Lauderdale & Stuan, FI PROPERTY TYPES PREVIOUSLY APPRAISED: Adult Congregate Living Facilities Agricultural Farms Aircraft Hangars Apartment Buildings Bank buildings Commercial Property Condemnation - Partial and Total Takings Condominium units Easements - Surface, Subsurface, and Overhead Fish camps Industrial Property Lease Fee/Leasehold Interests Medical Offices Mobile Home Parks Motels/Hotels Office Buildings Recreational Property Residences Restaurants Retail Stores Schools Service Stations Shopping centers Vacant Land Warehouses Wetlands/Swamp land Other EDUCATION: College - B.S. Degree, Univcrsity of rlorida, Journalism Major Real Estate Appraisal Courses Completed: Appraisallnslitutc - Basic Incomc Capitalization USPAP Market Studies Gold Coast Rcal Estate School- An InlroducLion to Appraising Real Propcliy Standards of Professional Practice Real Estate Finance Standards of Professional Practice Am AD2b USPAP South Florida Water Management District- Appraising Ruml Properties in SE r/ Rura-l Property ApprAisals APPRAISAL OF A 3.44 ACRE PARCEL OF MULTI-FAMILY LAND LOCATED AT THE SOUTHWEST CORNER OF NORTH SEACREST BOULEVARD AND NORTHWEST 8TH AVENUE BOYNTON BEACH, FLORIDA 33435 FOR BOYNTON BEACH COMMUNI1Y REDEVELOPMENT AGENCY BY ROBERT B. BANTING, MAl, SRA . STATE-CERTIFIED GENERAL REAL ESTATE APPRAISER RZ4 AND BEAU M. ARNOLD STATE-CERTIFIED GENERAL REAL ESTATE APPRAISER RZ2937 WITH ANDERSON & CARR, INC. 521 SOUTH OLIVE AVENUE WEST PALM BEACH, FLORIDA 33401 DATE OF VALUE: OCTOBER 4, 2006 DATE OF REPORT: OCTOBER 6, 2006 FILE NO.: 260606 ROBERT B, BANTING. MAl. SRA. PRESIDENT State-Certified General Real Estate Appraiser RZ4 FRANK 1. CARDa, MAl, VICE PRESIDENT State,Certified General Real Estate Appraiser RZI I 90 A~[)r:v~()~ & CAVV. I~C. <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< L4l'l'raisers .llealtors >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 521 SOUTH OLIVE A VENUE WEST PALM BEACH, FLORIDA 33401-5907 www.andersoncarr.com Telephone (561) 833.1661 Fax (561) 833-0234 October 6, 2006 Oi!.a/it}' c5e/wce c5illce 1947 Vivian Brooks Planning Director Boynton Beach Community Redevelopment Agency 915 South Federal Highway Boynton Beach, Florida 33435 RE: Appraisal of 801 North Seacrest Boulevard, Boynton Beach, Florida 33435 Dear Ms. Brooks: Pursuant to your request, we have personally appraised the subject property, being a vacant parcel of residential land that is suitable for multiple-family development. The subject property contains roughly 3.44 acres or 149,925 square feet and is located at the southwest corner of North Seacrest Boulevard and NW 8th Avenue, within the municipal limits of the City of Boynton Beach. The subject property is currently zoned for multifamily use and has a corresponding future land use designation that would allow for development with a density of up to 10.8 dwelling units per acre (DU/Acre). It is currently sHe plan approved for a townhome development of 37 units. There is currently an amendment to the City's comprehensive plan being reviewed by the Department of Community Affairs (DCA) that would allow the city to increase densities throughout the city up to 20 DU/Acre, provided the proposed project provides an affordable housing component. Boynton Beach Community Redevelopment Agency (CRA) representative Vivian Brooks, has indicated to the appraiser that she does not feel the DCA will have an issue with approving the City's request and that the final amendment could be in place as early as December, following two public hearings in front of the City Commission. The appraisers have considered the reasonable probability of the subject's current density increasing in this valuation. The purpose of this appraisal is to report our opinion of the market value of the Fee Simple estate of the subject property, as of October 4, 2006, the date of inspection and photographs. The intended use of this appraisal is to estimate market value for use by our client (the intended user), for internal decision making purposes. The client is considering possibly purchasing the subject property. This report has been prepared for no other purpose and for use by no other person or entity than for use by the client for the purpose stated herein. Any other use of this appraisal is considered a misuse and thus the appraisers will not be held responsible for any outcome associated with such use by another entity or for another purpose. A~[)~V,()~ & CAVV. I~C. Vivian Brooks Planning Director Boynton Beach Community Redevelopment Agency October 6, 2006 The 2006 tax bill will not become delinquent until April 2007. However, according to the Palm Beach County Tax Collector Offices online, public access system, it appears that a tax certificate may have been sold on the property for delinquent property taxes in the 2004 tax year. The appraisers recommend that any buyer contemplating purchasing the subject, fully investigate the delinquent property tax status of the subject property, through the Palm Beach County Tax Collectors Office. The purpose of this appraisal is to report our opinion of the market value of the Fee Simple estate of the subject property, as of October 4, 2006, the date of inspection and photographs. As a result of our analysis, we have developed an opinion that the market value (as defined in the report), subject to the definitions, certifications, and limiting conditions set forth in the attached report, as of October 4, 2006, was: THREE MILLION DOLLARS ($3,000,000) The value estimate assumes an exposure time of six to twelve months. The following appraisal is presented in a summary report. This letter must remain attached to the report, which contains 50 pages plus related exhibits, in order for the value opinion set forth to be considered valid. Respectfully submitted, ANDERSON & CARR, INC. Robert B. Banting, MAl, SRA State-Certified General Real Estate Appraiser RZ4 Beau M. Arnold State- Certified General Real Estate Appraiser RZ2937 RBBIBMA:c~p 11 ~ ~~()~l?'()~ & C..u?l?~ I~C. TABLE OF CONTENTS Page No. Summary of Important Facts. ......... ...................................... ................... ......... ......1-2 Certification................................................................................................................ 3 Assumptions and Limiting Conditions ...................... ...~......... ...............................4-7 Photographs, Maps, Aerials.................................................................................. 8-13 Purpose and Date of AppraisaL........... ............................. .....................................14 Property Appraised.................................................................................................. 14 Legal Description............. ................................................. ....................................... 15 Intended Use and User of the Report.................................................................... 16 CHen t ..... ...... ....... ..... ..........................................................................,.......... ........... ..16 Definition of Market Value .....................................................................................17 Property Rights Appraised ...................................... .............. .................................. 17 Typical Buyer Profile................................................................................. ............... 18 Scope of Assignment........ ................................................................................ ...18-19 Palm Beach County Summary ...... ......................... ........... ..... ..... ..... ....... ......... ...20-21 Location I Neighborhood Summary ..................... .......................... ...................22-23 Property Data....................................................................................................... 24- 28 Owner of Record ............. ....................... ....... ......... ....... ....... ....... .......................24 Palm Beach County Property Control Number...............................................24 Census Tract........................................... ....................................................... .....24 Flood Zone................................ ................................................................,......... 24 Assessment and Taxes..... ................................. ............ ................. ....... ..............25 Zoning and Comprehensive Land Use Plan .................................................... 26 Concurrency.. ................................... ............... .................................................... 27 Utilities..... ...... ....... ........ ........................................ ..............................................27 Sales History ............................................ ............ ......................................... ...... 27 Site Analysis... .................. .......................,............. ............................... ..... .......... 28 Highest and Best Use ........ ................................................................................. ...... 29 Exposure I Marketing Times ................... ............ ..... ........ ....... ............ .................... 30 The Valuation Process............ ................................................................................. 31 Sales Comparison Approach.............................................................................. 32- 50 Qualifications for Robert B. Banting, MAL, SRA (State-Cert Gen REA RZ4) Qualifications for Beau M. Arnold (State-Cert Gen REA RZ2937) ~()~12S()~ & CA1212. I~C. SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS Client: Boynton Beach Community Redevelopment Agency Ownership: Boynton Associates L TD Property Rights Appraised: Fee simple estate Special Assumptions Reference: See Assumptions and Limiting Conditions Numbers 17 and 18. Unusual Market Externality: None Location: The property is located at the southwest corner of North Seacrest Boulevard and NW 8th Avenue, Boynton Beach Site/Land Area: 149,925 square feet, or 3.44 acres Hazardous Waste Conditions: None - observed. See Assumptions and Limiting Conditions Number 12. Zoning: R3 (Multiple-Family Family District) by Boynton Beach Land Use Plan Current HDR (High Density Residential, 10.8 DU/Acre Maximum) by Boynton Beach Proposed SHDR (Special High Density Residential, 20 DU/Acre Maximum) by Boynton Beach 1 ~()~12S()~ & CA1212.I~C. SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS (CONTINUED) Flood Zone & Map Reference: Zone C, Community Panel No. 120196-0004 C effective date September 30, 1982 Current Use: Vacant Highest and Best Use: Residential redevelopment Marketing Time: Six months to one year Value Conclusions Value Via Sales Comparison Approach $3,000,000 Final Market Value Conclusion: $3,000,000 Date of Value: Date of Report: Date of Inspection: October 4, 2006 October 6, 2006 October 4, 2006 Appraisers: Robert B. Banting, MAl, SRA State-Certified General Real Estate Appraiser RZ4 Beau M. Arnold State-Certified General Real Estate Appraiser RZ2937 2 A~()~12S()~ & CA1212. I~C. CERTIFICATION I certify that, to the best of my knowledge and belief: The statements of fact contained in this report are true and correct. The reported analysis, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, unbiased professional analyses, opinions, and conclusions. I have no present or prospective interest in the property that is the subject of this report, and I have no personal interest or bias with respect to the parties involved. My compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event. This appraisal conforms to the Uniform Standards of Professional Appraisal Practice ("USP AP") adopted by the Appraisal Standards Board of the Appraisal Foundation, except that the Departure Provision, permitting an appraiser to deviate from USPAP Standards, shall not apply. My analyses, opinions, and conclusions were developed, and this report has been prepared in conformity with the requirements of the Code of Professional Ethics and the Uniform Standards of Professional Appraisal Practice of the Appraisal Institute. This appraisal assignment was not made, nor was the appraisal rendered on the basis of a requested minimum valuation, specific valuation, or an amount, which would result in approval of a loan. The use of this report is subject to the requirements of the Appraisal Institute and the State of Florida Division of Real Estate, Florida Real Estate Appraisal Board, relating to review by their duly authorized representatives. As of the date of this report, Robert B. Banting, MAl, SRA has completed the requirements of the continuing education program of the Appraisal Institute. Robert B. Banting and Beau Arnold have made a personal inspection of the property that is the subject of this report. No one provided significant professional assistance to the person(s) signing this report. The appraisers have performed within the context of the competency provision of the Uniform Standards of Professional Appraisal Practice. Robert B. Banting, MAl, SRA State-Certified General Real Estate Appraiser RZ4 Beau M. Arnold State-Certified General Real Estate Appraiser RZ2937 3 ~()~12S()~ & CA12l? I~C. ASSUMPTIONS AND LIMITING CONDITIONS 1. Unless otherwise stated, the value appearing in this appraisal represents our opinion of the market value or the value defined AS OF THE DATE SPECIFIED. Values of real estate are affected by national and local economic conditions and consequently will vary with future changes in such cOIlditions. 2. Possession of this report or any copy thereof does not carry with it the right of publication nor may it be used for other than its intended use. The physical report(s) remains the property of the appraiser for the use of the client. The fee being for the analytical services only. The report may not be used for any purpose by any person or corporation other than the client or the party to whom it is addressed or copied without the written consent of an officer of the appraisal firm of Anderson & Carr, Inc. and then only in its entirety. 3. Neither all nor any part of the contents of this report shall be conveyed to the public through advertising, public relations efforts, news, sales or other media without written consent and approval of an officer of Anderson & Carr, Inc. nor may any reference be made in such public communication to the Appraisal Institute or the MAl, SRA or SRP A designations. 4. The appraiser may not divulge the material contents of the report, analytical findings or conclusions, or give a copy of the report to anyone other than the client or his designee, as specified in writing except as may be required by the Appraisal Institute, as they may request in confidence for ethics enforcement or by a court of law or body with the power of subpoena. 5. Liability of Anderson & Carr, Inc. and its employees is limited to the fee collected for the appraisal. There is no accountability or liability to any third party. 6. It is assumed that there are no hidden or unapparent conditions of the property, subsoil or structures which make it more or less valuable. The appraiser assumes no responsibility for such conditions or the engineering which might be required to discover these facts. 7. This appraisal is to be used only in its entirety. All conclusions and opinions concerning the analysis which are set forth in the report were prepared by the appraisers whose signatures appear on the appraisal report. No change of any item in the report shall be made by anyone other than the appraiser and the appraiser and firm shall have no responsibility if any such unauthorized change is made. 4 A~()~12S()~ & CAl?l? I~C. ASSUMPTIONS AND LIMITING CONDITIONS (CONTINUED) 8. No responsibility is assumed for matters legal in character or nature, nor matters of survey, nor of any architectural, structural, mechanical or engineering nature. No opinion is rendered as to the title which is presumed to be good and merchantable. The property is appraised as if free and clear, unless otherwise stated in particular parts of the report. 9. No responsibility is assumed for accuracy of information furnished by or from others, the clients, his designee or public records. We are not liable for such information or the work of subcontractors. The comparable data relied upon in this report has been confirmed with one or more parties familiar with the transaction or from affidavit. All are considered appropriate for inclusion to the best of our knowledge and belief. 10. The contract for appraisal, consultation or analytical service is fulfilled and the total fee payable upon completion of the report. The appraiser or those assisting the preparation of the report will not be asked or required to give testimony in court or hearing because of having made the appraisal in full or in part; nor engaged in post-appraisal consultation with client or third parties, except under separate and special arrangement and at an additional fee. 11. The sketches and maps in this report are included to assist the reader and are not necessarily to scale. Various photos, if any, are included for the same purpose and are not intended to represent the property in other than actual status, as of the date of the photos. 12. Unless otherwise stated in this report, the existence of hazardous material, which mayor may not be present on the property, was not observed by the appraiser. The appraiser has no knowledge of the existence of such materials on or in the property. The appraiser, however, is not qualified to detect such substances. The presence of substances such as asbestos, urea-formaldehyde foam insulation, or other potentially hazardous materials may affect the value of the property. The value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired. 5 ~()~12S()~ & CAl?l? I~C. ASSUMPTIONS AND LIMITING CONDITIONS (CONTINUED) 13. The distribution of the total valuation of this report between land and improvements applies only under the existing program of utilization. The separate valuations for land and building must not be used in conjunction with any other appraisal, no matter how similar and are invalid if so used. 14. No environmental or impact studies, special market studies or analysis, highest and best use analysis study or feasibility study has been requested or made unless otherwise specified in an agreement for services or in the report. The appraiser reserves the unlimited right to alter, amend, revise or rescind any of the statements, findings, opinions, values, estimates or conclusions upon any subsequent such study or analysis or previous study or analysis, subsequently becoming known to him. 15. The value estimated in this appraisal report is gross without consideration given to any encumbrance, restriction or question of title, unless specifically defined. The estimate of value in the appraisal report is not based in whole or in part upon the race, color or national origin of the present owners or Occupants of the properties in the vicinity of the property appraised. 16. This appraisal report has been prepared for the exclusive benefit of the client for internal decision making purposes. It may not be used or relied upon by any other party. Any party who uses or relies upon any information in this report, without the preparer's written consent, does so at his own risk. If this report is placed in the hands of anyone but the client, client shall make such party aware of all the assumptions and limiting conditions of this assignment. 6 ~()~12S()~ & CAl?12. I~C. ASSUMPTIONS AND LIMITING CONDITIONS (CONTINUED) 17. The subject property is currently zoned for multifamily use and has a corresponding future land use designation that would allow for development with a density of up to 1O.8DU/acre. It is currently site pla~ approved for a townhome development of 37 units. There is currently an amendment to the City's comprehensive plan being reviewed by the Department of Community Affairs (DCA) that would allow the city to increase densities throughout the city up to 20 DU/Acre, provided the proposed project provides an affordable housing component. Boynton Beach Community Redevelopment Agency (CRA) representative Vivian Brooks, has indicated to the appraiser that she does not feel the DCA will have an issue with approving the City's request and that the final amendment could be in place as early as December, following two public hearings in front of the city commission. The appraisers have considered both the current density and the potential future density of the subject property in this valuation. 18. The 2006 tax bill will not become delinquent until April 2007. However, according to the Palm Beach County Tax Collector Offices online public access system, it appears that a tax certificate may have been sold on the property for delinquent property taxes in the 2004 tax year. The appraisers recommend that any buyer contemplating purchasing the subject, fully investigate the delinquent property tax status of the subject property, through the PalIl). Beach County Tax Collectors Office. 19. ACCEPTANCE OF, AND/OR USE OF THIS APPRAISAL REPORT CONSTITUTES ACCEPTANCE OF THE PRECEDING CONDITIONS. 7 AN()~12S()~ & CA1212. I~C. SUBJECT PROPERTY PHOTOS Street scene looking south along Seacrest Boulevard. The subject property is to the right. (Photo taken October 4, 2006) Subject looking west from Seacrest Boulevard. (Photo taken October 4, 2006) 8 ~()~12S()~ & CAl?l? I~C. SUBJECT PROPERTY PHOTOS (CONTINUED) Subject looking northwest from Seacrest Boulevard. (Photo taken October 4,2006) Subject looking southw from NW 8th Avenue. (Photo taken October 4, 2006) 9 ~()~12S()~ & CAl?12. I~C. LOCATION MAPS fWiI'f2TM fi n WW"1Tf4 I ~""j'T" ;:.:JIW:UM ~ ;! JtW Int I i c . -(0'1' i ~ :; ~ I \ NW'~ / ) '-oj' . . , I. ....~~.-._..;..~ ""'''r ~'A', C>C"'YCi.}. .~,." :M;,/'-"'" ,- I d! ( ;'" --",OQ;~Nl:P I.N ~!'..o" PI~'~,._,^_, o:Wl!:..~'t.-~t..'\C~O}l$'r.1v..,b!_~l:{>(>l -, '", '^~ "<Nl> t ~ $.W3RC "" ,"0 ~1Z0;~ST W SW4'TM .... TP1,.tN::;"JIlt.AGS. "' ~ I ~ I ~ - 1(&Ne'!it GlllE&1ofBJUA.R TN S;''YeTH .$E ~'fH SW!!moll..N ~~~... s"'.renf SE 8TH '~w,~ ""'",. swa.., se"TK SVilTrl SW9'T'M "~f .'LAKE ~~-SW,1"T.M I SW:11'T~ ~, WAVl -;:OOI::lel._ SW12T~' FtMERA JULcRC HI8ISCUS...VAV :Wli:< '..,a.:'N'ml 10 ~()~l?S()~ & CA12l? I~C. PARCEL MAP ~_-- -l 1 (~- ~ 1 ~...' -- , I '.~J..l. . --- .- /~./'\:~' "', l:r~B / / /' ", ~">(jo 14600 j ('SS<lr'I"';~ \;--_ 147. ',\ T / / \. \'550 J 1540,,' / lSOI 1 " .. rOw. /.,/ \..., \""i'~-"" .......:.,1. .il.520 1562'\ "'1S3(Jo / / / /.J<-";"\.. ........l ,,/,./ ,.1/ "~ ..' ,-/1561 '\ . (1300 -______.....J I", e) 17~ > ..,. T.J.e ~ I -1 1230 1300 1310 1250 ....1300 .....'\. 1 ()6() .... ~~J 11"'I'il'~?~, 1200 . G250 11~" ../ I ~d~~ [i::l~'='.:'g::l 17~) r::::=- r~~ '-'fi.10 \ 1370 -_......- ..!,... ;\; flt.tI) _____ ~------- 1331 I . ',".., ----... ... - -- ~:'iiGo ), ( 1300 ~ 1410 -___ -----' 11 0010 ,.. /0010 0040 0070 0240(} ~ 01&0 01SO ,- 002:2 ~- '-"'---~1 1 01 I SOlO "'- I 1 \.~ - r' I 00.54 A~()~12S()~ & CA1212. I~C. AERIAL PHOTOGRAPH It should be noted that the improvements pictured in the aerial photograph have been razed and the site is now vacant. 12 A~()~12S()~ & CAl?l? I~C. AERIAL PHOTOGRAPH It should be noted that the improvements pictured in the aerial photograph have been razed and the site is now vacant. 13 ~()~12S()~ & CAl?l? I~C. PURPOSE AND DATE OF APPRAISAL The purpose of this assignment is to estimate the as is market value of the fee simple estate of the subject property, as of October 4, 2006, the date of inspection and photographs. PROPERTY APPRAISED The subject property is a vacant parcel of residential land that is suitable for multiple-family development. The subject property contains roughly 3.44 acres or 149,925 square feet and is located at the southwest corner of North Seacrest Boulevard and NW 8th Avenue, within the municipal limits of the City of Boynton Beach. The subject property is currently zoned for multifamily use and has a corresponding future land use designation that would allow for development with a density of up to 1O.8dwelling units per acre (DU/acre). It is currently site plan approved for a townhome development of 37 units. There is currently an amendment to the City's comprehensive plan being reviewed by the Department of Community Affairs (DCA) that would allow the city to increase densities throughout the city up to 20 DU/Acre, provided the proposed project provides an affordable housing component. Boynton Beach Community Redevelopment Agency (CRA) representative Vivian Brooks, has indicated to the appraiser that she does not feel the DCA will have an issue with approving the City's request and that the final amendment could be in place as early as December, following two public hearings in front of the city commission. The appraisers have considered the likelihood of the subject's current density increasing in this valuation. 14 ~()~12S()~ & CAJ?12. I~C. LEGAL DESCRIPTION The following legal description was taken from the last recorded deed involving the subject property. It can be found in Palm Beach County OR Book 03896, Page 0826 PARCEL 1: A portion of Block C of the Plat of Boynton Hills, Boynton l!each J Palm aeacb Coun ty , Florida, according to the Plat thereof. recorded in Plat Book 4 t at Page 51. of the Public Records of Palm Beach Co~y I Florida> described as follows: , comm~~~/'\tbe Northeast corner of Lot 147 of said Blod< C; Qlence South (assu, - ',',JIg theEut line of Said Lot 147 a: di$tance of 20.0,,0 feet to, the Point 0 _..S. -" ning; thence continue South.., along the East .)~ne._ot said Block C,228.~.', " t~ the Southeast corner of Lot 134 of ,said Block C; "tbence' West, along the \'~~ '-line.oI said tot 134. a distance of 100 feet to the East line of Lots 135 ~:!1:~ of said Block C; thence South, along said East line and tile Southorly' ~~tlon thereof, 189.19 (eet to lhe center.line. of.ORAND CIRCLE uN", being ll:.eurve c9ncave Southwesterly -having a radius of 591. 65 f~t. ( a line radial to ia.lU~".citrve bears North 4V'04' 57" East); thence' Nortbwe~terly; along' the arc o~:"'m. curve 5,02 feet througb a central angh: of 0029'11" to the intu&ectionwilh ~(~~ JNortherly prolongation of the East line of Lot 129 of said Bloc.k, C (a line r.atfiil t~ said curve at tbe said JioOint of mtersectiol1 beats North 4Oo35'46l' East); the~~utb, along tbe said Northerly prolong-atton of the East line ot Lot 1,2:9, a ~a"peJ ,oott 57.60 teet co the Southeast corner of said Lot 129; thence West, along ~ line of said Lot 129 and the South line of Lot 128, II distance of lSO.00 te~'>to.:tbe West line of said Lot 128; thence North, along said West line 15.00 reet to dte ~utb line of Lot!> 121 and 126 or Il>aid .Block C; thence West, along the said Sout~;HJle of Lots 127 and 126; a dist~nce ,of 10lLOO feel to lh:e West line of said Lot I'2t) ; \hence North'. along said West line. 45.00 teet to the South line of Lots 124 and l~~l\s~d Block C; thence West along said South line, 100.00 feet to the West line ot-:":Hfd Lot 123; thence North, along said West Un~ and the NortherJlt prolongation th~.., .193.23 feet to the inter5ection with the Westerly prolongation of thfJ Sou th line of(t6t',141 of said 810ck C; thence North 16(043'35" 18et, along s.tJd Westerly. prolonp~ 157,9'9 feet to the West !.ine of said Lot 141; thenee North, along said West line(t},~,25 feet to the North line of said lAt 141, thence NOt'th 83<>17'55" I!:ast, along'-$~(~rth line of Lots 141 and 142 of said Block C, a <lis, tance ot 75.51 f"t to a line ~'f~l)We!if of and pa~llc:l with the East line of 1.ot 150 ot said Block C; thence Nor'tq-f'-Jil(fnlf said parallel UM 92.44 feet to the North line 01 Lots 150, 119, 148 and. 114J!.J'A.'~:ijd Block C; thence East. along .tHud Nor:th line ZOfi.OO (eet to the begmnUlg'l(?ra~A~utye concave Southwesterly havmg a radiUS of 20,00 (eet and a central angle oqf 909.{K1'..oo"; thenCe Southea$terly along the ,arc of said'curve,' 31.42 fcet (0 the Poinl\~f.'&"ginning- aforcdel$cnbed. \r ....".-;.,~.. 15 ~()~12S()~ & CA12l? I~C. INTENDED USE AND USER The intended use of this appraisal is to estimate market value for use by our client (the intended user), for internal decision making purposes. The client is considering possibly purchasing the subject property. This report has been prepared for no other purpose and for use by no other person or entity than for use by the client for the purpose stated herein. Any other use of this appraisal is considered a misuse and thus the appraisers will not be held responsible for any outcome associated with such use by another entity or for another purpose. This report has been prepared utilizing generally accepted appraisal guidelines, techniques and methodologies as contained within the Uniform Standard of Professional Practice (USP AP), as promulgated by the Appraisal Foundation. As a State-Certified, Licensed or Registered Trainee Appraiser, the appraisers preparing this report are bound by these standards and regulated by the Florida Real Estate Appraisal Board of the Florida Department of Professional Regulation. CLIENT Boynton Beach Community Redevelopment Agency 915 South Federal Highway Boynton Beach, Florida 33435 16 ~()~12S()~ & CAl?12.I~C. MARKET VALUE The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently, knowledgeably, and assuming the price,is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (A) Buyer and seller are typically motivated; (B) Buyer and seller are well informed or well advised, and each is acting in what he considers his and/or her own best interest; (C) A reasonable time is allowed for exposure in the open market; (D) Payment is made in cash in U. S. dollars or in terms of financial arrangements comparable thereto; and (E) The price represents normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. SOURCE: Title XI of the Financial Institutions Reform, Recovery;, and Enforcement Act of 1989("FIRREA"). PROPERTY RIGHTS APPRAISED The property rights appraised are those of the fee simple estate. Fee Simple Estate Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat. SOURCE: The Dictionary of Real Estate Appraisal, Fourth Edition 2002, by the Appraisal Institute. 17 ~()~12S()~ & CAl?V. I~C. PERSONAL PROPERTY, FURNITURE, FIXTURES AND EQUIPMENT This appraised value of the fee simple estate does not include the personal property, furniture, fixtures and equipment (FF&E), if any, necessary for the operation of the intended use of the property. TYPICAL BUYER PROFILE We found that buyers of similar properties in this market are residential developers with experience in smaller scale infill development and redevelopment. Alternative buyers would be governmental authorities for possible development of park or other civic related facilities. SCOPE OF ASSIGNMENT The traditional appraisal approaches include the cost approach, the sales comparison approach, and the income capitalization approach. We have considered all three approaches in this assignment, but found only the sales comparison approaches to be applicable. The cost and income approaches were not used. In the process of gathering data for the sales comparison approach to value, we conducted a search of our appraisal files and public information services such as the Palm Beach County Property Appraisers public access system and the Palm Beach County Clerks Office, as well as subscription based information sources such as CoStarComps.com and RealQuest.com for comparable sales in the relevant market area. The appraisers have focused their sales research on infill properties sold for residential redevelopment in the eastern portion of Central and Southern Palm Beach County. We searched for the most similar sales in closest proximity to the subject property. Our sale search included both vacant and improved commercial type properties sold over the past two years. The sales ultimately selected for further analysis were the best comparable sales we were able to find in this market. We obtained and verified additional information on the comparable properties with a party to the transaction, or a broker or agent of the parties when possible. 18 ~()~12S()~ & CAl?12. I~C. SCOPE OF ASSIGNMENT (CONTINUED) We have made a personal inspection of the subject property. We have made a periphery drive by inspection of the comparables as well as examining aerial photography. Physical data pertaining to the subject property was obtained from personal inspection and public information sources. We make no warranty as to the authenticity and reliability of representations made by those with whom we verified sales and other information. We have taken due care in attempting to verify the data utilized in this analysis. We based our analysis and conclusions on overall patterns rather than on specific representations. The appraisal is presented in a summary report. 19 ~()~12S()~ & CA12l? I~C. PALM BEACH COUNTY SUMMARY : .' "~--- 76 . ,..,,..,....... - , ~ 33455 " . . '\ ......" "- ..... I ....0-, ,\, i:: ...........,..................., :\t-~.'~~'!..- ...~~~.~~.'H.~::'t ~...~..13~!JQ ... . ~\~,::-:... r;. ..~\" ~ " "'.- . ',' I" ... 458' -. .:; j : -''''''~ ; . 33478 .~ } er : : . I \._.... I... ,." \. I \\, .:': . : ':--ilo.----. ~,,_ -'J : ~ . .,/ : : . ..''-. 33418 1 ' BelICh :'':~~: , .'-.., I : ..' 3$"t.ll.."~ :', . "....". \ : i'-.-- .. .. ", 33470 "; .... ';. .~.. .. t :,"'-. ,', _.3)41.2 ..... I I.....,.. ~ j .98 .....'" "'. ~'441 II E A,C.M . PAL M ~ - ... f.< LOR I n' A , , lEI : 33414 , 'j Palm Beach County, located along Florida's southeastern coast, is the sixth fastest growing metropolitan area in the United States. The population was 863,518 in 1990. The 2000 census reports the county's population at 1,131,184, third largest in the state with an increase of31 percent since 1990. The 2005 population estimate is 1,265,900 persons, an increase of 11.9 percent over the 2000 census. The vast majority of the growth has been a result of in-migration from the North as well as from Dade and Broward Counties. Tourism is the county's leading industry, employing over 60,000 people and generating about $1.9 billion dollars annually. The other two billion dollar industries are construction and agriculture. The expanded (1988) Palm Beach International Airport experienced their busiest month ever in April 2004 after serving a record 5.8 million passengers in 2003; a highly visible sign of the county's explosive growth. 20 ~()~12S()~ & CAl?l? I~C. PALM BEACH COUNTY SUMMARY (CONTINUED) The airports growth has necessitated new direct -access overpass-interchanges with I- 95 (2004). Tourism and in-migration of retirees are the forces that drive the county's growth. Major private sector employers include Florida Power & Light, US Sugar Corporation, ADT/Sensormatic, Office Depot, Palm Beach Newspapers, and BellSouth, each with over 1,000 employers. However, the largest employer is the Palm Beach County School Board with over 18,000 employees. The county has the highest total effective buying power in the state. The climate and recreational opportunities attract wealthy individuals and families. The county boasts forty-seven miles of coastline, along with the Intracoastal Waterway, as well as a bounty of attractions, events, and festivals. With over 140 golf courses, the county is considered the "golf capital of the world." The county includes both unincorporated areas and incorporated municipalities; the largest of which is West Palm Beach, the county seat. Boca Raton, located at the south end of the county is the second largest city, and one of the highest income retail trade areas in the U.S. The town of Palm Beach is one of the wealthiest communities in the country. Palm Beach County had a 2005 real estate tax base of more than 653,000 properties valued at nearly $181 billion, representing a value increase of roughly 21 % over 2004 figures. In 2005 the residential accounted for roughly 43% of the tax role with 32% more being condominium and 19% commercial properties. The balance of the tax roll was made up of agricultural properties and tangible personal property. The factors that have fed the county's past growth remain in force. As its population increases, Palm Beach County is becoming a major market in its own right. In addition, communications and information technology will allow more companies to locate here as manufacturing and transportation shrink in overall economic importance. These positive factors should benefit the county's real estate markets for the foreseeable future. The real estate market is strong, and population growth, while moderating in percentage terms, remains high on an absolute basis. As population grows, more supporting commercial, industrial and services development will be required. These factors combined with a growing economy and a finite quantity of developable land created a positive real estate outlook for the long term. 21 A~()~12S()~ & CAl?l? I~C. NEIGHBORHOOD SUMMARY A neighborhood is defined as: "A group of complementary land uses; a congruous grouping of inhabitants, buildings, or business enterprises." SOURCE: Dictionary of Real Estate Appraisal. Fourth Edition, 2002. f <> Of J j N., tlNhAv-e- G SI , ,., 181hA.... e.-attt-Olltl SI N.. ~1th Cl N.. 11lh Av" ~ _.,." a..... 91 lJthCt~'J":!.~'6.1h Cl Circle Or S ~' :gN1f:1GthAv. ,~_~f i~"'t..~&.>.yo.. If f N" tSri, r.:r;.g 1"1-1 :~II_wC. :;.1!:1 - Av. * il-~ n'!!:7 j 'it .iQ'W Nwt..U, Av" ~N" 14tt1Av. r1 hllllq)r Shot. 0. ,.,. ~- ~'E i "ii !r , !J z r E NwlSlhA'fI. lI'l ! NW5thliNI! J! 'i ,~=~--::: .f ~Jtd'W.! I Ne91hA,\ite J ~ Ne l!lthAw" .s 11 IJ ,., t! ~t C,!aY Orl M<>4_'. i i t go .. S' f f f j !!J;: ~ 51! 9'5/! " ...'....., f ~ 81tI Av. ;; .. ~ Ofd Bo~n Rd if J "-Ct- COr.. Ct t:>',i --".....--...."1 A 1:1 ",,3tfyAII. N.13thA_ N.. t2ttlA,", ,~ lllhA",.NIII,llthAo.,,,, Nclt1IIFid I ~ltftWfty tIko,2thT.. ,,1tU,Rd N.7."AYII ~/th',S' 4thAv<, f '4 -.W i ~ ~.l> ~---"",. oo.",Qr JI. 'i it l : .~.,. .. ~~Ko. yw..... .' Sl. a -""'~ ... C''' . '''# _ _sW:eth~ - ~\'~.~ ,....)..e;. ,,~..,~;~ :' , ..4':>11.;" 't.. ,,>.,r ~<f' .~ ,..." "i <t "". '''l, ~"> 'l .~ ."..., ~.,. Q< ~ <jl NYIf' ...AiI. ..,....A'" ~. ; .~ E PCe-flnsr:-.. ~". r;\ o;~ : - .~ S. 2ndPN. ,-~BOyntfm.-ch ,1e; '-'0l'17-tJnt,E ;: '.. f,S....'Av. :re :it _ ~.'_ _ .I'-t::l~~~,~.-'i _ n ~ ;: - : \1 :~ '~ ,'Se :f(l- L <.~. I :--. ,"" - --'---'-'_ :~. /K.prI_,,_Dr :sa j'i~ ".' "'w :l~,,-,- 0. ". i_: S'~:A:A~. J':~ - 'Ha=~:NJI S, l11hAvcl ~ 0), C,itlIIaoLII ~ 8: S.,I2itIAVIl!',ta Rh4.t. Dr JUh'.q..~! , ; .. The subject property is located west of downtown Boynton Beach, in the central part of the City of Boynton Beach. The neighborhood is bound on the north by Martin Luther King Jr. Boulevard, on the south by Boynton Beach Boulevard, on the east by Federal Highway and on the west by Interstate 95. The neighborhood is characterized by older commercial properties along the major thoroughfares with moderately priced, older single family residences and multi-family residences in the interior neighborhoods. 22 ~()~l?S()~ & CA1212. I~C. NEIGHBORHOOD SUMMARY (CONTINUED) The neighborhood has good access. The primary thoroughfares are Boynton Beach Boulevard, Federal Highway, and Seacrest Boulevard. Boynton Beach Boulevard provides access to the Congress Avenue commercial di~trict, a booming retail area, as well as rapidly developing residential areas lying west of the city. Access to Interstate 95 is located at Gateway Boulevard and Boynton Beach Boulevard. Federal Highway traverses Palm Beach County's older coastal neighborhoods. Federal Highway also provides access to Atlantic Avenue in downtown Delray Beach, an older commercial district that is redeveloping as a thriving restaurant and nightlife area. The City of Boynton Beach has a conceptual redevelopment plan for the district. The plan includes a mixed use project in the area of Martin Luther King Jr. Boulevard and Seacrest Boulevard. The CRA has recently purchased several parcels of land in the district and some of the commercially zoned property has been down zoned for residential uses. Infill development is underway west of Seacrest Boulevard. All things considered, this neighborhood is likely to experience stable or possibly moderately increasing property values for the foreseeable future. It is yet to be seen, as hoped by the city and local business owners, if the completion of the on- going projects will create the momentum necessary to spur a dramatic wave of new private redevelopment. 23 A~()~12S()~ & CAl?l? I~C. PROPERTY DATA Taxpayer of Record Boynton Associates LTD Census Tract .~ wEe Gs.:-:r.:':ir.g S-::':;HIT; ........... a M I Streer Address 2006 Information 801 1'0 SL-\.CREST BL\D BOYNTON BCH FL 33435 '48424 CllyNam. State Abbr. 'Zip Cod. ).7SA :\10 Cod. ,SIa.. C<lde Counly Coo. 'tnct Cod. '099 0061.00 Get Census Demographic Back co FFIEC ~ain Back t.o GeoCode D:..sc~aln1.er HellO - Highway ~ Tract Street NCI!: elk1: tho! fr;;!p - it'M:tf.t!11J!p Parcel Control Numbers 08-43-45- 21-07 -003-1230 Flood Zone Data The subject property has been found to be located on the National Flood Insurance Program Map, Community Panel Number 120196 0004 C dated September 30, 1982. This map depicts that the subject is situated within an area designated as Flood Zone "C". Flood Zone "C" is defined as "areas of minimal flooding." 24 ~()~12S()~ & CAl?l? I~C. PROPERTY DATA (CONTINUED) Assessment and Taxes The following summary is based on information obtatned from the Palm Beach County, Property Appraisers Public Access System. ' The proposed assessment for the subject for the 2006 tax year is $781,464. Total taxes will amount to $18,910 based on this assessment. The 2006 tax bill will not become delinquent until April 2007. However, according to the Palm Beach County Tax Collector Offices online public access system, it appears that a tax certificate may have been sold on the property for delinquent property taxes in the 2004 tax year. The appraisers recommend that any buyer contemplating purchasing the subject, fully investigate the delinquent property tax status of the subject property, through the Palm Beach County Tax Collectors Office. Based on the conclusions of this report, the current assessment appears to be low. A prudent purchaser would be aware of the potential for reassessment after a sale of the property and the tax bill could increase substantially. 25 ~()r=12S()~ & CA1212. I~C. PROPERTY DATA (CONTINUED) Zoning and Land Use The subject property is located within the corporate limits of the City of Boynton Beach and is therefore subject to the Boynton Beach Zoning Code and Comprehensive Plan. The City has given the subject property a zoning designation of R-3 (Multiple-Family Dwelling District). These district regulations allow a maximum density of 10.8 dwelling units per acre. The subject currently has a site plan approval for a 37 unit townhome development. The city code reads: "It is the intent of this district to provide a higher residential density which encourages vertical structures and flexibility in multiple-family living and that a certain amount of multiple-family dwelling is necessary and desirable and can complement certain areas if located appropriately and if properly designed. " This zoning designation allows for a number of uses by right, including but not limited too, single family residences and multiple-family residential structures (including apartments, cooperatives, condominiums, town houses, and their attendant recreational facilities). Conditional uses include but may not be limited to, churches, schools, fraternal organizations, boarding houses and private clubs. For a complete listing of potential uses allowed under the R-3 zoning designation as well as the various site and other regulations the reader is directed to the Boynton Beach Zoning Code which is available from their municipal website at www.boynton-beach.org The City's future land use map indicates the property is located within an area designated HDR (High Density Residential, 10.8 DU/Acre Maximum). The current zoning designation is in conformity with the land use designation.It should be noted that there is currently an amendment to the City's comprehensive plan being reviewed by the Department of Community Affairs (DCA) that would allow the city to increase densities throughout the city up to 20 DU/Acre, provided the proposed project provides an affordable housing component. Boynton Beach Community Redevelopment Agency (CRA) representative Vivian Brooks, has indicated to the appraiser that she does not feel the DCA will have an issue with approving the City's request and that the final amendment could be in place as early as December, following two public hearings in front of the city commission. The appraisers have considered the likelihood of the subject's current density increasing in tl}is valuation. 26 ~()~l?S()~ & CA12l? I~C. PROPERTY DATA (CONTINUED) Concurrency The strongest growth control measure ever imposed on Palm Beach County was passed by the Florida Legislature and became effective on February 1,1990. This was mandated by Chapter 163, Florida Statutes, otherwise known as the "Growth Management Law." One provision of this law is referred to as "Concurrency" which dramatically limits the ability to develop real property. It is basically the requirement that adequate infrastructure be available to serve new development. Eight types of infrastructure are affected including traffic, potable water, sewer, drainage, solid waste, recreation and open space, mass transit, and fire rescue. The appraisers have assumed for this analysis that the subject could be developed at maximum of 20 units per acre and meet concurrency requirements. Utilities Municipal water and sewer are available on site. Subject Property Sales History The appraisers have not been provided with a title abstract on the property appraised, nor have they conducted a title search of their own. The appraisers have, however, consulted the Palm Beach County Property Appraiser's records and found that the subject property does not appear to have been involved in a market transaction since being acquired by the current owner in November 1982. 27 ~()~12S()~ & CAl?l? I~C. PROPERTY DATA (CONTINUED) Site Analysis We have been not been provided with a surveyor site plan for the subject property. We have therefore relied on the legal description, aerial photography, the Palm Beach County property records and a physical inspection of the property for this analysis. Size and Shape The subject site is irregular in shape and contains approximately 149,925 square feet, or 3.44 acres. Topography This office has not been provided with a soil survey, made specifically for the subject, which would reveal the presence of any adverse soil characteristics, such as muck and/or contamination, affecting the market value of the property. Accordingly, this appraisal is subject to a formal soil survey and testing for contamination. The site is relatively level and roughly at road grade. AccesslExposure The subject can be accessed via Seacrest Boulevard on the west, NE 7th Avenue to the north or NE 1st Street to the east. Access and exposure are considered good. EasementslEncroachmen ts Typical utility easements are believed to exist, although a survey delineating the boundaries of such was not made available to the appraisers. This appraisal assumes that there are no easements on the property that would affect its use in such a way as to have a negative impact on value. 28 A~()~12S()~ & CA1212. I~C. HIGHEST AND BEST USE The Appraisal Institute defines "Highest and Best Use" as follows: "The reasonably probable and legal use of vacant land Ot improved property which is physically possible, appropriately supported, financially feasible and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility and maximum productivity" SOURCE: The Dictionary of Real Estate Appraisal, Fourth Edition 2002, by the Appraisal Institute. The highest and best use is that use of the land that can reasonably be expected to produce the greatest net return to the land over a given period of time. That is the legal use that will yield to land the highest present value, sometimes called "maximally productive". The subject site is physically capable of handling numerous improvements. Its use would be limited only by zoning, logical continuation of existing uses, and the feasibility of such uses. The zoning of the property promotes residential uses with a current maximum density of 10.8 dwelling units per acre. The subject property has gained a site plan approval from the city for the construction of 37 townhome units and is currently in the marketing phase. Construction has yet to begin. The site also has the potential to have its density increased if the proposed comprehensive plan amendment is adopted and certain affordable housing provisions are met. The area was originally developed in a residential manner with mixture of both single family and multi-family uses. There are some limited areas of neighborhood commercial zoning along Seacrest Boulevard, however, the city is looking at down zoning some of these properties to encourage a predominate residential use in the neighborhood.. Considering the existing use in the area in conjunction with newer planned projects and the zoning, we feel the highest and best use as vacant would be for a multi- family development that would maximize the available density and be in keeping with the overall redevelopment trend in the area. 29 ~()~12S()~ & CAl?l? I~C. EXPOSURE TIME Exposure time is the estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the; appraisal: a retrospective estimate based on an analysis of past events assuming a competitive and open market. Exposure time is always presumed to occur prior to the effective date of the appraisal. The overall concept of reasonable exposure encompasses not only adequate, sufficient and reasonable time but also adequate, sufficient and reasonable effort. Exposure time is different for various types of real estate and value ranges and under various market conditions. SOURCE: Appraisal Standards Board of the Appraisal Foundation, Statement on Appraisal Standards No. 6, Fourth Edition, 2002 The real estate market in South Florida has remained strong over the past several years. Most properties offered for sale have been exposed on the market for six to twelve months. Exposure times in the area have varied as some sellers were approached by buyers without directly marketing the properties, while in other cases properties have been significantly over priced and sat on the market for extended periods of time. The appraisers feel that if adequately priced the subject property would be expected to sell with an exposure time of six months to one year. 30 ~()~12S()~ & CAl?l?I~C. THE VALUATION PROCESS Generally, the appraiser uses three approaches in estimating the market value of a particular property. As discussed in the Scope of Assignment, we have applied the sales comparison approach to value. The sales comparison approach requires that the appraiser locate recent sales of similar properties and through an adjustment process arrive at an indication of what these properties would have sold for if they possessed all of the salient characteristics of the subject property. These adjusted sales prices are then correlated into an estimate of the market value of the property via the sales comparison approach to value. The final step in the appraisal process is the reconciliation or correlation of the value indications. In the reconciliation or correlation, the appraisers consider the relative applicability of each of the approaches used, examines the range between the value indications, and places major emphasis on the approach that appears to produce the most reliable solution to the specific appraisal problem. The following section of the report describes the analytical process. 31 ~()I'12S()~ & CAl?l? I~C. SALES COMPARISON APPROACH A search of the Palm Beach County Official Records, local multiple listing service records, discussions with local brokers and appraisers and a personal inspection of the subject area produced several sales of similar type properties. The sales used in the analysis were the best comparables that we were able to verify with a party to the transaction. We compared the selected sales with the subject, considering differences and possible adjustments. We utilized a qualitative process to compare the subject property with the comparables to reflect a value for the subject property. In this analysis, we considered differences between the comparables and the subject in terms of property rights sold, financing, conditions of sale, market conditions (trend or time adjustment), zoning and land use classification, location, site size, and site conditions, such as entitlements, subsoil conditions or existing improvements. The appraisers based the comparisons on a standardized unit of measure, the price per square foot of land area. The price per square foot of land area correlates well among the comparables and is commonly used by buyers in this type of analysis. The following pages feature a detailed write up of each comparable used in the is analysis, a locational map and summary of the selected comparable sales data, which is followed by a discussion of the pertinent adjustments and conclusion of value 32 A~()~12S()~ & CA1212. I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO.1 Our File: 210149C, 210149D, 250724, 260080 -13B , , OR Book 18842, Page 0160 Deed Dated June 23, 2005 Grantor: Balestrieri Development Corporation Grantee: Lennar Homes, Inc. Legal: Long legal in the Southeast Quarter of Section 20, Township 46 South, Range 43 East, Palm Beach County, Florida. Parcel No.: 12-43-46-20-01-013-0010, -0020, -0030, -0040, -0050, -0060,- 0070 and 12-43-46-20-17-000-0010 Location: Southwest corner of Swinton Avenue and SW 10th Street, Delray Beach, Florida Zoning: RM, Residential Multifamily (6-12 du/ac) by City of Delray Beach 33 ~()~12S()~ & CAl?l? I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO.1 (CONTINUED) Land Use Plan: Medium Density Residential by City of Delray Beach Utilities: Water and sewer Site Size: Slightly irregular in shape containing 383,328 square feet or 8.80 acres. Sales Price: $4,264,706 Price/SF: $11.13 Price/Acre: $484,626 Price/Unit: $42,647 Financing: Cash to seller Comments: The property had sold in August 2003 for $932,000 including $60,000 in the cost to remove the existing improvements. At that time the property was zoned CF with a low density land use plan. The property owners applied for a rezoning to medium density multifamily which would allow a development density up to 12 units per acre. The site was approved for the Village at Swinton Square. A 100 unit townhouse (11.36 du/ac) project with 20 percent of the units set aside as affordable "workforce housing" which would limit profit on resale in order to discourage investor purchases. Prices for the workforce units will be capped at $220,000 and they will contain 1,600 square feet of which 1,300 square feet will be under air. The market price units will have from 1,800 to 1,900 square feet under air. The site has 610 feet offrontage on S.W 10th Street to the north, 616.95 feet on Swinton Avenue to the east, 578.22 feet on Reigle Avenue to the south, and 627.20 feet along an existing subdivision to the west. A large banyan tree on the site will be retained and the site will have an overall coverage of 66 percent. Sale information confirmed by Leo Balestrieri, grantor and Andy McGregor of Lennar Homes. (wbl11/2003, 12/ 2004, 11/2005) 34 ~()~12S()~ & CAl?12. I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO.2 Our File: 250710, 260080, 260605 - 13B and 15B - ~'" '.Il ~I! ~14.)II~JI,L II~ .1Aa1 ./..c:: I , .. "'I ..:1 'm~"s ,..:lI... ~n., 'Jl9l J J:Y 1b'I '.0 !--AVE ' - - - i1 SE ~I.l ~V! t ' .. L ~.b '~. llS ~1",'~ i4'?" · ao..... ~ I!!Il' 1 , ~ f~ :. -." ~'..,. 19 J"'~ I ~ Cj= ~~ @ lJJ '..... - ~ It" ~ I;:; ".' <:@3) C 3 .....' 4 : "",: t,..,.. ,....&I.. f ~ @G'), ~.,I:] '..!.U!' , I m.r ':'!., ; l - . , '1:> ! I'AI....WAY 'lIl'! .. ." '/n, GAItDtff.....~....... I"AIRFIEL.O ~' I, ~~' , /<l, 0.:' ct\'IOO ! W"UV · c~:~~.. t .~. /' t~,~ '.54) 10:z.. 't:Jl.. _ ...:~. ~ .. ',' I~. ,... F; OJ I p~ "'! Of f .'. /C.r.. ..../;. fi,i, ~,i' Z2 ..' ..'.. .. .. ".. ..' ,.t' .i ......, -AVE:::;:;:-- ..' "'r~, m 4ot' Co' .. IKAi . iRACT~ II tt<57. ) A J::i: . , Il~J 'I ~I II'filv IJ I r---.~ ~ OR Book 18843, Page 1910 OR Book 18883, Page 1387 I. t. ,~ .. ~ "I" (~3 lo<l4 18, 1-, ! j; "..' -. 2.'l. ;t J Ci'i) I J Deed Dated June 28, 2005 Deed Dated June 28, 2005 Grantor: David C. & Elaine B. Baker and S & L Investments, LLC Grantee: 2319 South Federal Partners, LLC Legal: Lots 1 through 5, Robinson's Addition to Boynton Beach, Plat Book 23, Page 144, Palm Beach County, Florida. Parcel No.: 08-43-45-33-06-000-0010, -0030, -0041 and -0042 Location: Northwest corner of South Federal Highway and SE 23rd Avenue, Boynton Beach, Florida 35 ~()~l?S()~ & CAl?12. I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO.2 (CONTINUED) Zoning: C3 and C2, Commercial by City of Boynton Beach. Land Use Plan: LRC, Local Retail Commercial by City of Boynton Beach. Site Size: Generally rectangular site containing 54,976 square feet or 1.26 acres. Sales Price: $2,341,000 Price/SF: $42.58 Price/Acre: $1,857,937 PricelUnit: $106,409 Financing: Cash to seller. Comments: Sale involves the assemblage of several tax parcels in two separate but related transactions which both closed on the same day. The property was rezoned subsequent to sale from commercial to multifamily and is planned for the development of 22 three story 3 and 4 bedroom townhomes over first level garages. The development will named Hemingway Square. The long range land use plan will allow up to 20 units per acre but with open space and parking requirements the current plan is to develop the site with a density of 17.43 units per acre. Prices were not disclosed but five units have been sold as of March 2006. Property was under contract for a 60 day due diligence period with a 30 day close. Sale information confirmed by John B. DeMeo in November 2005 and again on March 3, 2006. (wbl, gko) 36 ~()~12'()~ & CAl?l? I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO.3 - 3508 N Federal Highway, Boynton Beach Our File: 260450.001, 260605-13B C4 ",' ':.\..-""1 en --<,. . ""A.~~,' --\.,;.~~l .~"::~' },:~" ,~ iWlO ~~~~1,: 1 '""~'.~: ~~ ~>:;:i ~J:~<\ C3 OR Book 19167, Page 1554 Deed Dated August 25, 2005 Grantor: Langston Bag Co. of Florida Grantee: Boynton Townhomes, LLC Legal: Lots 37,38 and 58, AMENDED PLAT OF TRADE WINDS ESTATES, Plat Book 21, Page 73, Palm Beach County, Florida, Less that portion deeded to the State of Florida by instrument recorded in Official Records Book 104, Page 35, Palm Beach County, Florida. Parcel No.: 08-43-45-04-17 -000-0370 08-43-45-04-17-000-0380 Location: East side of Old Dixie Highway, west side of Federal Highway, (more frontage on Old Dixie Highway) south of Miller Road, 1I3rd mile north of Gulfstream Boulevard, Boynton Beach, Florida 37 ~()I::l?S()~ & CAVV. I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO.3 (CONTINUED) Zoning: At sale: C3 and C4, Community and General Commercial, by Boynton Beach Proposed: IPUD, Infill Planned Unit Development by Boynton Beach Land Use Plan: At sale: Local Retail Commercial and General Commercial by Boynton Beach Proposed: Special High Density Residential Area by Boynton Beach (Maximum density of up to 20 units per acre) Site Size: 121,400 SF or 2.78 acres Utilities: Electric, Public Water, Sewer, and Telephone Sale Price: $3,000,000 $24.71 Price/SF: Price/Acre: $1,079,137 Price /Unit: $54,545 (based on maximum potential of 55 units) Financing: No impact Comments: Sale verified with A. Guy Neff, Esquire, as an arms length transaction with no known seller concessions. (mjb 7/2006, bma 10/2006). 38 ~()~12S()~ & CAl?l? I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO.3 -1415 S. Federal Highway, Boynton Beach, FL 33435 Our File: 260450.001,260605 -15B & 13B ~ ,l ~I~' g" ~ ~/ ,~ . ....:v I J:.. ~ · . ~ G ,4_~t ~ ~ +.... z ,",;l ~ ~ J/ I ~....:.; OJ l~ ~ l;;; .~. -... ir... ,.. . fJj~" ~A-"":: U: .. .. .. .!..",' f.'l.r. ,. 12- Z} , ... . ." !' AvE .~ .@"" il.:!'.!!, .....:~ en ~_. '~.. (4-2.11) ... ... ~. .. - .. ~.. ~ ,-. J *"- -.:",;.1 1..1 ~ ~~w ~I ) ~c . -''1 ~ ";.1.. ..I~ .~. COfomO 'qOLONIAL ~ ~ ~.) - ~~ ~,~ ,::;e~:lo 1 ..12thl~ ~ ~i .. t ~r,~ r 1 ~:~~ I .. ~:VE I}~ . ~. I~': ~ckl\ TR ~L~ .IiKl ., r ~ ~ - , ~ 't d~,:...2C. '-" ~ b~' ..-- .. " .I.,./.... ~' '._' .11 ' : \.i- ,__I .-.: rZ4-2"~).., .... ~ u.'M '.,~...". ...I" ..~ 101. _. ~ .. .. . .. - 4" IL ,- SN..IG .. .' ~v~;: C 3 GQi:> <XNX>'S ~ ~ I~ 2{ - .. - ... AVE '. ,. .. .. ...'- jl QJ]) ... ;/ Jl;l.4S_ .. _ Z2 r J .. .. . ii $A; 'il ... OR Book 19179, Page 1294 Grantor: IAJ ~ ~ R3 SEE SEe 2T ..~ C~:D ~. 27 Deed Dated August 29, 2005 Gulf Stream Lumber Company Grantee: Boynton, Inc. Legal: Lots 29 and 30, Block 2, Revised Plat of Boynton Heights, Plat Book 10, Page 64, Palm Beach County, Florida. Parcel No.: 08-43-45-28-00-000- 5090 08-43-45- 28-00-000-51 00 08-43-45- 28-01-000-0060 08-43-45-28-01-000-0121 08-43-45- 28-01-000-0130 08-43-45- 28-01-000-0 140 08-43-45- 28-01-000-0150 08-43-45-28-01-000-0160 39 08-43-45-28-01-000-0170 08-43-45-28-01-000-0190 08-43-45 - 28-01-000-0200 08-43-45- 28-01-000-0240 08-43-45-28-01-000-0260 08-43-45-28-01-000-0270 08-43-45-28-01-000-0290 ~()~12S()~ & CAl?l? I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO.4 (CONTINUED) Location: The northwest corner of the intersection of South Federal Highway and Woolbright Road in Boynton Beach, Florida Zoning: MU - L by Boynton Beach (Maximum density of up to 40 units per acre) Land Use Plan: Mixed Use Site Size: 646,989 SF or 14.85 acres Utilities: Electric, Public Water, Sewer, and Telephone Sale Price: $14,950,000 Price/SF: $23.10 Price/Acre: $1,006,734 Price /Unit: $30,263 (based on m494 units) Financing: No impact Comments: According to the selling agent, Robert Dockerty, this property was in escrow for three or four years. There was environmental remediation necessary. The buyer intends on developing a multi use project which will include retail, office and 494 residential units. There were no seller concessions and this was an arms length transaction. (mjb 7/2006, bma 10/2006). 40 ~()~12S()~ & CAl?l? I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO.5 - 125 - 131 SW rt Avenue, Boynton Beach, FL Our File: 260450.001, 260605 - 13B \'XnQ lliilf ,!,;,;:.;: ~~~':-r~~~:~4;~'~r~I"1tJt'~~~;'~;' .'." ^;-: ": ~ . ~ r''-~-'''~ ' . .,~~<C 2 i Vi ;. :", '!'~ "og~ l i ~. i ~p "i'1'e ~,,-: '~--. r ""-"".-'"~~""T". 'D., r.... 00'.; ~ ~i':~;.:. j' :; I ': '\"/~'!;>1.' ~~.- :; .. I' i ' I " 'I" '. ; a,. I . I Sir..i! ~:~ ':'~~';:~ s;'t .=.,'/e.s'=-- (~.; :::!:;e'e',l;C;::;~L''??':~!:.;:'':f:' ["G{'7iW l ~ f ! 'I~l~ ; i \ i i - , PU OR Book 19322, Pages 1842, 1843 & 1844 Deed Dated September 22, 2005 Grantor: Matthew Williams and Dianne Williams Grantee: Pozzi- Weston Development, LLC Legal: Lots 35 and 36, Block 12" Boynton Heights Revised Plat, Plat Book 10, Page 64, Palm Beach County, Florida. Lot 31, less the West 5 feet thereof, Lot 32 and 33, less the East 20.5 Feet thereof, Boynton Heights Addition, Plat Book 10, Page 64 Palm Beach County, Florida. Lot 34, and the East 20.5 feet of Lot 33, Block 12, Boynton Heights Addition, Plat Book 10, Page 64 Palm Beach County, Florida Parcel No.: 08-43-45-28-10-012-0350 08-43-45-28-10-012-0311 08-43-45-28-10-012-0331 41 ~()~l?S()~ & CAl?12. I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO.5 (CONTINUED) Location: North side of SW 1't Avenue, east of SW 1'1 Street and west of Seacrest Boulevard, Boynton Beach, Florida Zoning: R2 - Duplex by Boynton Beach Land Use Plan: Medium Density Residential Site Size: 17,400 SF, 0.399 acres (145' x 120') Utilities: Electric, Public Water & Sewer, and Telephone Sale Price: $375,000 Price/SF: $21.55 PricelUnit: $125,000 Financing: No impact Comments: This sale was verified with Matthew Williams, the listing agent and owner. The sale consisted of three parcels, sold together, but recorded separately. There were no seller concessions and this was an arms length transaction. The buyer intends to build three custom Key West style single family homes on the sites. One 1,730 square foot, 3 bedroom!2 bathroom home with a 1 car garage has been built so far and is listed for sale as of 10/2006 at $459,900. (mjb 7/2006) (bma 10/2006) 42 ~()~12S()~ & CA12l? I~C. SALES COMPARISON APPROACH (CONTINUED) Comparable Sales Map Fflt.-"NOO:. Pl;~! Oelr~}f &a:Ct:-<?dI~ C!1."b. -'~~i>3Tk'_____"- ..; , -, 43 ~()~V~()~ & CAVV. I~C. SALES COMPARISON APPROACH (CONTINUED) Sales Summary and Discussion " CQMpARULESALES SUMMARY; , '......., ," Sale Sale Date Location Comments Purchase Land Price/ SF OR Bk/Pg Price Area (SF) Land Iun-2005 Southwest comer of Swinton Approved 100 unit 1 18842/0160 Ave and SW 10th Street, townhouse project with 20% $4,264,706 383,328 $11.13 Delray Beach workforce housing set aside Iun.2oo5 Northwest corner of S Federal Plans to develop with 22 2 18843/1910 Hwy and SE 23rd Ave, $2,341,000 54,976 $42.58 18883/1387 Boynton Beach townhome units Aug-2005 West side of N Federal Hwy, Proposed Zoning and Land 3 1916711554 just south of Miller Road, Use to allow a potential of $3,000,000 121,400 $24,71 Boynton Beach up to 20DU/Acre Aug-2005 Northwest corner of S Federal Mixed use: office, retail, 4 Highway and Woolbright and 494 residential units. $14,950,000 646,989 $23.10 19179/1294 Road, Boynton Beach Long escrow Sep-2005 INorth side of SW 1st Avenue, 5 19322/1842- east of SW 1st Street and west Plans to develop with 3 $375,000 17,400 $21,55 1844 of Seacrest Blvd, Boynton single family homes IRp~"h Date-of. Southwest corner of N Seacrest Current Land Use allows Sub. Value Blvd and NW 8th Avenue, lO,8DU/Acre application NA 149,925 NA Oct-2006 Boynton Beach made for 20DU/Acre Property Rights The property rights transferred were believed to be fee simple. No non market leases were known to be encumbering the sales. Thus, each of the comparable sales utilized here represent both the fee simple and leased fee estates. No differences between the sales and the subject are reflected. 44 ~()-=I2S()~ & CAI212. I~C. SALES COMPARISON APPROACH (CONTINUED) Sales Summary and Discussion (Continued) Financing We considered any indication of favorable financing. All of the comparable sales were either on a cash basis, or had market oriented finandng, and, therefore, no differences were noted. No adjustments have been made for financing, Conditions of Sale The property rights transferred were fee simple. The appraisers were unaware of any of the comparable properties being encumbered by leases that affected value. Therefore, no adjustments were made to these properties. Market Conditions The date of value is October 4, 2006. The sales occurred over the period from June 2005 to September 2005. The sales data for this market does not give a clear indication of a significant change market conditions for similar type properties over the period in which the sales occurred. None of the comparables have been adjusted for market conditions based on the date of sale. However, both comparables 1 and 4 were known to have been under contract for extended periods of time and although they have recent closing dates the sales prices are not reflective of the market for that time period. Hence, these comparable sales warrant some upward adjustment for time. 45 ~()I:12S()~ & CA1212. I~C. SALES COMPARISON APPROACH (CONTINUED) Sales Summary and Discussion (Continued) Location The subject is located on a well traveled secondary thoroughfare (Seacrest Boulevard) and is close to the downtown central business district of Boynton Beach. The immediate neighborhood has generally underperformed other local markets and has been characterized in the past by stagnant growth and fair to average property maintenance levels. However, the City and the CRA have begun to focus on improving the neighborhood through both public and private investment in the area. Comparable 5 is also located in the city of Boynton Beach and is only about 8 blocks south of the subject. However, it is located in a different neighborhood that exhibits higher property value levels than that of the subject's immediate neighborhood. Hence some downward adjustment for location is warranted. Comparables 2, 3, and 4 are located in Boynton Beach, as well. However, each is located along the Federal Highway Corridor, which is a significantly superior neighborhood area to that of the subject. Each of these sales also warrants downward consideration for superior location. Sale 1 is located within the City of Delray Beach, in a neighborhood area that is similar to that of the subject. No location adjustment is warranted for this comparable. Size Generally, larger properties will sell for a somewhat lower price per square foot than smaller ones, and vice versa, when all else is equal. Conversely, the smaller a property becomes the less development potential it may have without assembling it with other properties. The comparable sales utilized herein vary widely in size. However, the sales do not clearly indicate the need for a direct size adjustment. Therefore, no adjustment has been made. 46 A~()~12S()~ & CAl?12. I~C. SALES COMPARISON APPROACH (CONTINUED) Sales Summary and Discussion (Continued) Zoning / Land Use / Density The subject is currently zoned for multi-family use with a density of 10.8 dwelling units per acre and likely potential of up to 20 DU/Acre if the proposed project contains some affordable housing. The comparable sale properties had varying zoning and land use designations at the time of sale, including multi-family, commercial, and mixed use. However, each comparable was purchased with the intent to ultimately develop it with a residential or mixed use. Some properties fronting Federal Highway required zoning changes from commercial to residential. Normally, some sort of adjustment would be warranted for zoning. However, because the zoning changes consisted of a down zoning of the site from a more intense use, then the need for adjustment is less critical as the risk and uncertainty of whether such a request would go through is diminished. Probably the most important factor in the zoning and land use discussion is the overall density associated with each comparable. Sale 5 has the most restrictive zoning and lowest density of the comparables. It is inferior to both the proposed density of the subject and the existing. It warrants upward consideration for inferior density. Sale 1 calls for an overall density similar to that of what is currently allowed on the subject property. However, it requires a 20% affordable housing set aside that reduces the overall potential profitability of the project. The subject would have a 20DU/Acre density were it to have an affordable housing element. Hence, some upward consideration is warranted. Sale 4 had a mixed use designation and a potential density of up to 40 DU/acre, although it will ultimately be developed at about 33DU/acre. This site is deemed not only superior to the subjects current density, but that of it's potential density of up to 20 DU/acre pending the proposed comprehensive plan amendment discussed earlier in the Zoning and Land Use section of this report. Downward consideration is warranted for this sale. 47 ~()~12S()~ & CA12l? I~C. SALES COMPARISON APPROACH (CONTINUED) Sales Summary and Discussion (Continued) Zoning / Land Use / Density (Continued) The remaining two comparable sales, 2 and 3, each required zoning and land use changes in order to be developed residentially, unlike the subject which already has the zoning in place for up to 1O.8DU/Acre. Ultimately, however, they were granted densities that were higher than the subjects existing and in line with that of the subjects proposed. Additionally, to the appraisers' knowledge these projects did not require a provision for affordable housing. Overall, the need for and cost of a zoning change was deemed to be offset by the density that was ultimately rewarded. Hence, we have not adjusted these sales for Zoning / Land Use / Density. Miscellaneous Site Conditions Another factor considered here is the existence of any physically detrimental site conditions such as contamination or muck, or the presence of any development entitlements that run with the land, i.e. site plan approval. None of the sales were known to be significantly impacted by soil conditions. The subject is reported to have an approved site plan for 37 town home units Site planning is an entrepreneurial process with costs associated with it that can sometimes be quite extensive. A site plan approved site is more desirable than a "raw" site. That said, the subject's approval is at the existing density of 10.8 dwelling units per acre, where as the subject likely will ultimately be approved for a density of up to 20 dwelling units per acre. Overall the existing site plan is believed to have some impact on value, but not as significant as if it were for the maximum potential density of up to 20 dwelling units per acre, Conclusion Considering all of these differences, we developed the following qualitative comparison chart listing the sales as they compare to the subject property, based on a price per square foot of land area. Not all categories considered are depicted. Those omitted reflect no differences between the sale and the subject property. 48 . ~ z - -- ~ ~ ~ z ~ II! ~ 11./ Q Z ~ .-.. ~ f;r;':l ;J z ~ o u '-' == ~ ~ ~ ~ z o rr.J ~ ~ o U rr.J f;r;':l ~ rr.J .-.. "C ~ = = .... .. = Q U '-' = Q .... [I.l = - CJ = Q U C 0; . 52 ... ~ v u 0] - '" C .....52 E <:ii] 8 __ v gp;3 '2 -g ~j '" C ] .E "':a o:l c ~8 '" c .~ ~ ]~ 8 0 ... 8..~ 8m 'C ll.. o:l v ~G:' "Om C'-" j c .52 ~ u j ~f OQ:l .!!P:: ~o v 0; m c .g~ v .... ....... 0..... ~ ... o:l ] <:ii ... o 'C .B + c - V N <:ii ... ..!l! 's <:ii c ,52 ~ u j ... ..!l! 's <:ii gp .;; + ~ + - ... ..!l! 's /I <:ii <') .... .... .... ..... 00 N <') c<1 00 <') c o 'E '~ v m ~ 'Oci5 .....c:: ~o ... .... 8~~ t:i CI) 0) v"OQ:l ] 1; ~ :; 0) ..::: rJS<~ o .,., '00 0.... 00 NN 6v ~gg .... c "'00 ~~ .3~ ..2:>C5 .!::"t:: + .~ 8.. - ::l mm 'E v o S Z r5 ;0- o:l E 's <:ii ... ,52 ... v 0.. ::l m ... ..!l! 's Vi ... ..!l! 's Vi 00 .,., N v ..... '00 t-- 0\ '. "0 0 ~Q:l m ai 'O~ ... "0 V ... C t<) ... N 8 "'-l tjm v "0 ] 1; ..c:: 15 ~ ~ Z:I:~ o t-- .,.,....00 00\<') 0.... .... 6~i2 ::l0000 >-, 00 00 .... .... N c '" .... -5t-- tI)~ .3..... be> .:d 't:: + ,~ 8.. V)~ 'E v ~ ~ ::l ;0- o:l ... ..!l! 's Vi ... o 'C v 0.. ::l m ... ..!l! 's Vi ... ..!l! 's Vi .... t-- .,f N ..... o o '<l;. .... N .... g "0' Cil ~ q;P:: ~~ Z~ ..c:: u .... .... o:l o 0 v v..c::Q:l il '5 g - ~ =: '" .... >. ~ ,a~ .,.,v 0"" 0"" N~ clot-- ::l'oO ~o; .... t<) c o:l 0 -5.... Vl~ .3..... bo .E 'E + ,~ 0.. V)i~ .... o 'C 8.. ::l m ... ..!l! 's Vi ... o 'C v 0.. ::l m 0() C .;; + o !J + .... ..!l! 's <:ii "0- 0; o:l ... 0 ~P:: v .E ~ 0() m 'C .... .D 0"0 ... 0 E~..c:: o "0 ~ u C v tj '" Q:l j ~ 2 1:: ..c:: C o'~ ~ Z:I:Q:l .,.,v 00\ ON N~ cloO\ ::l ~ ~O\ .... '<t c "'.,., -5"" '" ....; .3~ bC5 .... 'c ~8..+ - ::l mm ... o 'c 'E + - ... ..!l! 's Vi ... o 'C v 0.. ::s m ... ..!l! 's Vi ... ..!l! 's <:ii o .... <') N ..... .,., v: .... N ..... 0\ 00 0\ \0" '<t \0 o o v r..: .... v~ ::l V C ~ ~"O ~ 1; c o 'E ~ Q) S .... ~ Q:l ~~i 15~~ ~~~ '(il ~ u ..c "€ ~ ~ u o '" m o:l Z~'O~ .,.,~ 8~~ ~NOO 0.. N .... v<') mO\ .... .,., ~ ~ ~ ~ Z ~ ~ ~ ~ .,., N 0\ a\ v .... .... '" v .... ~ v ai m ::l Z ~ '0< q;..c coo..c ~~~ v "0 C ] 1; B '5:g~ rJSQ:lQ:l v ::l 0;'00 >8 ~~ ~ u ~o o ..ci ::l m 0\ '<t ~()~12S()~ & CA1212. I~C. SALES COMPARISON APPROACH (CONTINUED) Conclusion (Continued) The preceding qualitative comparison chart shows the overall unadjusted value range for the subject property based on a price per square foot of land area to be roughly between $11.00 and $42.00. The adjusted range indicates a value more than comparable sale 1 at $11.13 per square foot and less than comparable sale 5 at $21.55. It is also notable that three of the sales show a clustering of sale prices from $21.55 to $24.71 per square foot. Sale 1 is a very good comparable because it is located in a similar neighborhood and has an affordable housing provision. However, its density is somewhat lower than the subjects and it requires an upward adjustment for time as well, due to its long escrow period. Sale 5 had an inferior density. It was located in close proximity to the subject, but within a significantly superior neighborhood. The subject would not likely command a price at the top of the range. Considering the available market data and the fact that the subject does have a site plan approval in place we feel a conclusion in the upper portion of the range is appropriate. Therefore, given the preceding data and discussions it is concluded that the market reflects a value for the subject property, as of October 4, 2006, of $20.00 per square foot. 149,925 Square Feet @ $20.00 per square foot = Rounded to: $2,998,500 FINAL MARKET VALUE ESTIMATE $3,000,000 50 QUALIFICATIONS OF APPRAISER ROBERT B. BANTING, MAl, SRA PROFESSIONAL DESIGNATIONS - YEAR RECEIVED MAl - Member Appraisal Institute - 1984 SRA - Senior Residential Appraiser, Appraisal Institute - 1977 SRPA - Senior Real Property Appraiser, Appraisal Institute - 1980 State-Certified General Real Estate Appraiser, State of Florida, License No, RZ4 - 1991 EDUCATION AND SPECIAL TRAINING Licensed Real Estate Broker - #3748 - State of Florida Graduate, University of Florida, College of Business Administration, BSBA (Major - Real Estate & Urban Land Studies) 1973 Successfully completed and passed the following Society of Real Estate Appraisers (SREA) and American Institute of Real Estate Appraisers (AIREA) courses and/or exams: Note: the SREA & AIREA merged in 1991 to form the Appraisal Institute, SREA R2: SREA 201: SREA: SREA: AIREA 18: SREA 101: AIREA: AIREA: AIREA: AIREA 2-2: AIREA: AIREA: AIREA: Case Study of Single Family Residence Principles of Income Property Appraising Single Family Residence Demonstration Report Income Property Demonstration Report Capitalization Theory and Techniques Introduction to Appraising Real Property Case Studies in Real Estate Valuation Standards of Professional Practice Introduction to Real Estate Investment Analysis Valuation Analysis and Report Writing Comprehensive Examination Litigation Valuation Standards of Professional Practice Part C ATTENDED VARIOUS APPRAISAL SEMINARS AND COURSES, INCLUDING: The Internet and Appraising Golf Course Valuation Narrative Report Writing Appraising for Condemnation Condominium Appraisal Reviewing Appraisals Eminent Domain Trials Tax Considerations in Real Estate Mortgage Equity Analysis Partnerships & Syndications Advanced Appraisal Techniques Federal Appraisal Requirements Valuation of Leases and Leaseholds Valuation Litigation Mock Trial Rates, Ratios, and Reasonableness Analyzing Income Producing Properties Standards of Professional Practice Regression Analysis In Appraisal Practice Discounting Condominiums & Subdivisions Condemnation: Legal Rules & Appraisal Practices Analyzing Commercial Lease Clauses Testing Reasonableness/Discounted Cash Flow Hotel al)d Motel Valuation Analytic Uses of Computer in the Appraisal Shop Residential Construction From The Inside Out Development of Major/Large Residential Projects Federal Appraisal Requirements Engaged in appraising and consulting assignments including market research, rental studies, feasibility analysis, expert witness testimony, cash flow analysis, settlement conferences, and brokerage covering all types of real estate since 1972, President of Anderson & Carr, Inc" Realtors and Appraisers, established 1947 Past President Palm Beach County Chapter, Society of Real Estate Appraisers (SREA) Realtor Member of Central Palm Beach County Association of Realtors Special Master for Palm Beach County Property Appraisal Adjustment Board Qualified as an Expert Witness providing testimony in matters of condemnation, property disputes, bankruptcy court, foreclosures, and other issues of real property valuation, Member of Admissions Committee, Appraisal Institute - South Florida Chapter Member of Review and Counseling Committee, Appraisal Institute - South Florida Chapter Approved appraiser for State of Florida, Department of Transportation and Department Natural Resources, Instructor of seminars, sponsored by the West Palm Beach Board of Realtors, Authored articles for The Palm Beach Post and Realtor newsletter, Real Estate Advisory Board Member, University of Florida, TYPES OF PROPERTY APPRAISED - PARTIAL LISTING Air Rights Medical Buildings Amusement Parks Department Stores Condominiums Industrial Buildings Mobile Home Parks Service Stations Auto Dealerships Vocant Lots - Acreage Shopping Centers Leasehold Interests Apartment Buildings Hotels - Motels Office Buildings Special Purpose Buildings Residential Projects Financial Institutions Churches Marinas Residences - All Types Restaurants Golf Courses Easements "I am currently certified under the continuing education program of the Appraisal Institute,II QUALIFICATIONS OF APPRAISER BEAU M. ARNOLD GENERAL INFORMATION State Certified General Real Estate Appraiser RZ2937 State Licensed Real Estate Sales Associate SL3076071 EDUCATION AND SPECIAL TRAINING Graduate, University of Florida, College of Business Administration, BSBA (Majors - Real Estate and Management) 1997 Successfully completed and passed the following courses: UF: UF: Al 200R: AI300GR: Al 1310 Al I41ON: Al 520: Real Estate Analysis Real Estate Valuation Residential Market Analysis and Highest and Best Use Real Estate Finance, Statistics, and Valuation Modeling Basic Income Capitalization National Uniform Standards of Professional Appraisal Practice Highest & Best Use and Market Analysis Engaged in appraising and researching real estate with Anderson and Carr, Inc. since May of 1997. TYPES OF PROPERTY RESEARCHED Vacant Commercial Land Commercial Buildings Vacant Residential Land Single Family Residences Rights-of-Way Special Purpose Properties Service Stations Residential Condominiums TYPES OF PROPERTY APPRAISED Single Family Homes Condominiums Vacant Commercial Land Vacant Residential Land Agricultural Land Commercial Buildings Proposed Construction Net leased Properties Public Land Office Properties Special Purpose Properties Rights-of- Way Easements Vacant Multi-Family Land Industrial Land Apartment Buildings Warehouse Buildings Gas Stations Subdivision Land Restaurants Shopping Centers APPRAISAL OF A 4.32 ACRE PARCEL OF MULTI-FAMILY LAND LOCATED AT THE SOUTHEAST CORNER OF NORTH SEACREST BOULEVARD AND NORTHEAST 7TH AVENUE BOYNTON BEACH, FLORIDA 33435 FOR BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY BY ROBERT B. BANTING, MAl, SRA STATE-CERTIFIED GENERAL REAL ESTATE APPRAISER RZ4 AND BEAU M. ARNOLD STATE-CERTIFIED GENERAL REAL ESTATE APPRAISER RZ2937 WITH ANDERSON & CARR, INC. 521 SOUTH OLIVE AVENUE WEST PALM BEACH, FLORIDA 33401 DATE OF VALUE: OCTOBER 4, 2006 DATE OF REPORT: OCTOBER 6, 2006 FILE NO.: 260605 ROBERT B, BANTING, MAl, SRA, PRESIDENT State.Certified General Real Estate Appraiser RZ4 FRANK J CARDO, MAl, VICE PRESIDENT State-Certified General Real Estate Appraiser RZII90 A~()I:l?'()~ ~ l:Al?l? I~l:. <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< /fl'l'raisers .~ealtors >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 521 SOUTH OLIVE AVENUE WEST PALM BEACH, FLORIDA 33401-5907 www.andersoncarr.com Telephone (561) 833-1661 Fax (561) 833.0234 October 6, 2006 Ol!.afj~v c5eJVice c5i/lce 1947 Vivian Brooks Planning Director Boynton Beach Community Redevelopment Agency 915 South Federal Highway Boynton Beach, Florida 33435 RE: Appraisal of 700 North Seacrest Boulevard, Boynton Beach, Florida 33435 Dear Ms. Brooks: Pursuant to your request, we have personally appraised the subject property, being a vacant parcel of residential land that is suitable for multiple-family development. The subject property contains roughly 4.32 acres or 188,243 square feet and is located at the southeast corner of North Seacrest Boulevard and NE 7th Avenue, within the municipal limits ofthe City of Boynton Beach. The subject property is currently zoned for multifamily use and has a corresponding future land use designation that would allow for development with a density of up to 10.8 dwelling units per acre (DU/Acre). There is currently an amendment to the City's comprehensive plan being reviewed by the Department of Community Affairs (DCA) that would allow the city to increase densities throughout the city up to 20 DU/Acre, provided the proposed project provides an affordable housing component. Boynton Beach Community Redevelopment Agency (CRA) representative Vivian Brooks, has indicated to the appraiser that she does not feel the DCA will have an issue with approving the City's request and that the final amendment could be in place as early as December, following two public hearings in front of the City Commission. The appraisers have considered the reasonable probability of the subject's current density increasing in this valuation. The purpose of this appraisal is to report our opinion of the market value of the Fee Simple estate of the subject property, as of October 4, 2006, the date of inspection and photographs. The intended use of this appraisal is to estimate market value for use by our client (the intended user), for internal decision making purposes. The client is considering possibly purchasing the subject property. This report has been prepared for no other purpose and for use by no other person or entity than for use by the client for the purpose stated herein. Any other use of this appraisal is considered a misuse and thus the appraisers will not be held responsible for any outcome associated with such use by another entity or for another purpose. A~()~l?S()~ & CA~12. I~C. Vivian Brooks Planning Director Boynton Beach Community Redevelopment Agency October 6, 2006 The 2006 tax bill will not become delinquent until Apri12007. However, according to the Palm Beach County Tax Collector Offices online public access system, it appears that tax certificates may have been sold on a portion of the property for delinquent property taxes in the years 2004 and 2005. The appraisers recommend that any buyer contemplating purchasing the subject, fully investigate the delinquent property tax status of the subject property, through the Palm Beach County Tax Collectors Office. The purpose of this appraisal is to report our opinion of the market value of the Fee Simple estate of the subject property, as of October 4, 2006, the date of inspection and photographs. As a result of our analysis, we have developed an opinion that the market value (as defined in the report), subject to the definitions, certifications, and limiting conditions set forth in the attached report, as of October 4, 2006, was: THREE MILLION FOUR HUNDRED THOUSAND DOLLARS ($3,400,000) -- The value estimate assumes an exposure time of six to twelve months. The following appraisal is presented in a summary report. This letter must remain attached to the report, which contains 49 pages plus related exhibits, in order for the value opinion set forth to be considered valid. Respectfully submitted, ANDERSON & CARR, INC. .~.. ~~~..~..-.~~-=-~..~. ~ . /. ....~. - ~~bert . ;antin~~ S~ State-Certified General Real Estate Appraiser RZ4 ",!.\ ;~, /,(0 ;':,. /; ". . lJy, j I ),1" / / {~,/f_.:ff I Beim M. 'ATn.6Id" State- Certified General Real Estate Appraiser RZ2937 RBB/BMA:cmp 11 A~()~12S()~ & CA1212. I~C. TABLE OF CONTENTS Page No. Summary of Important Facts............, ,............ ....... .... .................... .......... '.. .......,....1-2 Certification.................................................,...,......,..............................,.................... 3 Assumptions and Limiting Conditions ..................................................................4-7 Photographs, Maps, Aerials.................................... ...... .~..................................... .8-13 Purpose and Date of Appraisal........................... .................................................... 14 Property Appraised ........ ............................. ,............................ ...... ... .............. ..... .... 14 Legal Description...... ..................................,...................,........................................ 14 Intended Use and User of the Report....................................................................15 Clien t .................. ..... .............................,.................................................................... 15 Definition of Market Value ....... ,...................................................... ..... '.. ..... ......,...16 Property Rights Appraised ......................................... ........,.........,... ,..... .... ..,..........16 Typical Buyer Profile. ...... .............................,.. ,............ .,................,..... ................. ...17 Scope of Assignment.......................................,.................................................. .17 -18 Palm Beach County Summary ....... ........ .................,... ....,........., .......,...... ....... ....19-20 Location / Neighborhood Summary "" .......... ..................... ..... ................ ...... ....21-22 Property Data...........................,.."......."...."..."...................."................................ .23- Owner of Record.................. ,..............................,...,..........................,............... 23 Palm Beach County Property Control Number............................................... 23 Census Tract... ......... ........................ ................................................................... 23 Flood Zone................... ...... ........ .......... ........................................................ ....... 23 Assessment and Taxes.......................................................................... .............. 24 Zoning and Comprehensive Land Use Plan .................................................... 25 Concurrency. ............... ..............................................,......................................... 26 Utilities...........................................,..,.............................................,................... 26 Sales History ...................................".......,.,...."........,..................,...........,.......... 26 Site Analysis........................,.. ....................,....,.................,................................. 27 Highest and Best Use...... ............................................................................. ............ 28 Exposure / Marketing Times ..............,...............,....,......,.,..........,..,........................29 The Valuation Process................................................................................ ............. 30 Sales Comparison Approach ......,................... ..........., .............. ..... ............... ,.....31-49 Qualifications for Robert B. Banting, MAI, SRA (State-Cert Gen REA RZ4) Qualifications for Beau M. Arnold (State-Cert Gen REA RZ2937) ~()~l2S()~ & CA12l? I~C. SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS Client: Boynton Beach Community Redevelopment Agency Ownership: Boynton Associates LTD Property Rights Appraised: Fee simple estate Special Assumptions Reference: See Assumptions and Limiting Conditions Numbers 17 and 18. Unusual Market Externality: None Location: The property is located at the southeast corner of North Seacrest Boulevard and NE 7th Avenue, Boynton Beach Site/Land Area: 188,243 square feet, or 4.32 acres Hazardous Waste Conditions: None ,observed. See Assumptions and Limiting Conditions Number 12, Zoning: R3 (Multiple-Family Family District) by Boynton Beach Land Use Plan Current HDR (High Density Residential, 10.8 DU/Acre Maximum) by Boynton Beach Proposed SHD R (Special High Density Residential, 20 DU/Acre Maximum) by Boynton Beach 1 ~()~12S()~ & CAl?V. I~C. SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS (CONTINUED) Flood Zone & Map Reference: Zone C, Community Panel No. 120196-0004 C effective date September 30, 1982 Current Use: Vacant Highest and Best Use: Residential redevelopment Marketing Time: Six months to one year Value Conclusions Value Via Sales Comparison Approach $3,400,000 Final Market Value Conclusion: $3,400,000 Date of Value: Date of Report: Date of Inspection: October 4, 2006 October 6, 2006 October 4, 2006 Appraisers: Robert B. Banting, MAl, SRA State-Certified General Real Estate Appraiser RZ4 Beau M. Arnold State-Certified General Real Estate Appraiser RZ2937 2 ~()-=12S()~ & CAl?V. I~C. CERTIFICATION I certify that, to the best of my knowledge and belief: The statements of fact contained in this report are true and correct. The reported analysis, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, unbiased professional analyses, opinions, and conclusions, I have no present or prospective interest in the property that is the subject of this report, and I have no personal interest or bias with respect to the parties involved, My compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event. This appraisal conforms to the Uniform Standards of Professional Appraisal Practice ("USP AP") adopted by the Appraisal Standards Board of the Appraisal Foundation, except that the Departure Provision, permitting an appraiser to deviate from USP AP Standards, shall not apply. My analyses, opinions, and conclusions were developed, and this report has been prepared in conformity with the requirements of the Code of Professional Ethics and the Uniform Standards of Professional Appraisal Practice of the Appraisal Institute, This appraisal assignment was not made, nor was the appraisal rendered on the basis of a requested minimum valuation, specific valuation, or an amount, which would result in approval of a loan, The use of this report is subject to the requirements of the Appraisal Institute and the State of Florida Division of Real Estate, Florida Real Estate Appraisal Board, relating to review by their duly authorized representatives, As of the date of this report, Robert B. Banting, MAl, SRA has completed the requirements of the continuing education program of the Appraisal Institute. Robert B. Banting and Beau Arnold have made a personal inspection of the property that is the subject of this report. No one provided significant professional assistance to the person(s) signing this report. The appraisers have performed within the context of the competency provision of the Uniform Standards of Professional Appraisal Practice, ----_.=:~~ ~-~" ~~'"/' Robert B. Banting, MAl, A State-Certified General Real Estate Appraiser RZ4 Beau M, Arnold State-Certified General Real Estate Appraiser RZ2937 3 A~()~12S()~ & CA12I2. I~C. ASSUMPTIONS AND LIMITING CONDITIONS 1. Unless otherwise stated, the value appearing in this appraisal represents our opinion of the market value or the value defined AS OF THE DATE SPECIFIED. Values of real estate are affected by national and local economic conditions and consequently will vary with future changes in such conditions. 2. Possession of this report or any copy thereof does not carry with it the right of publication nor may it be used for other than its intended use. The physical report( s) remains the property of the appraiser for the use of the client. The fee being for the analytical services only. The report may not be used for any purpose by any person or corporation other than the client or the party to whom it is addressed or copied without the written consent of an officer of the appraisal firm of Anderson & Carr, Inc. and then only in its entirety. 3. Neither all nor any part of the contents of this report shall be conveyed to the public through advertising, public relations efforts, news, sales or other media without written consent and approval of an officer of Anderson & Carr, Inc. nor may any reference be made in such public communication to the Appraisal Institute or the MAl, SRA or SRPA designations. 4. The appraiser may not divulge the material contents of the report, analytical findings or conclusions, or give a copy of the report to anyone.othyr than the client or his designee, as specified in writing except as may be required by the Appraisal Institute, as they may request in confidence for ethics enforcement or by a court of law or body with the power of subpoena. 5. Liability of Anderson & Carr, Inc. and its employees is limited to the fee collected for the appraisal. There is no accountability or liability to any third party. 6. It is assumed that there are no hidden or unapparent conditions of the property, subsoil or structures which make it more or less valuable. The appraiser assumes no responsibility for such conditions or the engineering which might be required to discover these facts. 7. This appraisal is to be used only in its entirety. All conclusions and opinions concerning the analysis which are set forth in the report were prepared by the appraisers whose signatures appear on the appraisal report. No change of any item in the report shall be made by anyone other than the appraiser and the appraiser and firm shall have no responsibility if any such unauthorized change is made. 4 A~()r=I2S()~ & C~12. I~C. ASSUMPTIONS AND LIMITING CONDITIONS (CONTINUED) 8. No responsibility is assumed for matters legal in character or nature, nor matters of survey, nor of any architectural, structural, mechanical or engineering nature. No opinion is rendered as to the title which is presumed to be good and merchantable. The property is appraised as if free and clear, unless otherwise stated in particular parts of the report. 9. No responsibility is assumed for accuracy of information furnished by or from others, the clients, his designee or public records. We are not liable for such information or the work of subcontractors. The comparable data relied upon in this report has been confirmed with one or more parties familiar with the transaction or from affidavit. All are considered appropriate for inclusion to the best of our knowledge and belief. 10. The contract for appraisal, consultation or analytical service is fulfilled and the total fee payable upon completion of the report. The appraiser or those assisting the preparation of the report will not be asked or required to give testimony in court or hearing because of having made the appraisal in full or in part; nor engaged in post-appraisal consultation with client or third parties, except under separate and special arrangement and at an additional fee. 11. The sketches and maps in this report are included to assist the reader and are not necessarily to scale. Various photos, if any, are included for the same purpose and are not intended to represent the property in other than actual status, as of the date of the photos. 12. Unless otherwise stated in this report, the existence of hazardous material, which mayor may not be present on the property, was not observed by the appraiser. The appraiser has no knowledge of the existence of such materials on or in the property. The appraiser, however, is not qualified to detect such substances. The presence of substances such as asbestos, urea-formaldehyde foam insulation, or other potentially hazardous materials may affect the value of the property. The value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired. 5 ~()I:VS()~ & CAVV. I~C. ASSUMPTIONS AND LIMITING CONDITIONS (CONTINUED) 13. The distribution of the total valuation of this report between land and improvements applies only under the existing program of utilization. The separate valuations for land and building must not be used in conjunction with any other appraisal, no matter how similar and are invalid if so used. 14. No environmental or impact studies, special marJ.<:et studies or analysis, highest and best use analysis study or feasibility study has been requested or made unless otherwise specified in an agreement for services or in the report. The appraiser reserves the unlimited right to alter, amend, revise or rescind any of the statements, findings, opinions, values, estimates or conclusions upon any subsequent such study or analysis or previous study or analysis, subsequently becoming known to him. 15. The value estimated in this appraisal report is gross without consideration given to any encumbrance, restriction or question of title, unless specifically defined. The estimate of value in the appraisal report is not based in whole or in part upon the race, color or national origin of the present owners or occupants of the properties in the vicinity of the property appraised. 16, This appraisal report has been prepared for the exclusive benefit of the client for internal decision making purposes. It may not be used or relied upon by any other party. Any party who uses or relies upon any information in this report, without the preparer's written consent, does so at his own risk. If this report is placed in the hands of anyone but the client, client shall make such party aware of all the assumptions and limiting conditions of this assignment. 6 ~()~12S()~ & CA1212. I~C. ASSUMPTIONS AND LIMITING CONDITIONS (CONTINUED) 17, The subject property is currently zoned for multifamily use and has a corresponding future land use designation that would allow for development with a density of up to 1O.8DU/acre. There is currently an amendment to the City's comprehensive plan being reviewed by the Department of Community Affairs (DCA) that would allow the city to increase densities throughout the city up to 20 DU/Acre, provided the proposed project provides an affordable housing component. Boynton Beach Community Redevelopment Agency (CRA) representative Vivian Brooks, has indicated to the appraiser that she does not feel the DCA will have an issue with approving the City's request and that the final amendment could be in place as early as December, following two public hearings in front of the city commission, The appraisers have considered both the current density and the potential future density of the subject property in this valuation. 18. The 2006 tax bill will not become delinquent until April 2007. However, according to the Palm Beach County Tax Collector Offices online public access system, it appears that tax certificates may have been sold on a portion of the property for delinquent property taxes in the years 2004 and 2005. The appraisers recommend that any buyer contemplating purchasing the subject, fully investigate the delinquent property tax status of the subject property, through the Palm Beach County Tax Collectors Office. 19. ACCEPTANCE OF, AND/OR USE OF THIS APPRAISAL REPORT CONSTITUTES ACCEPTANCE OF THE PRECEDING CONDITIONS. 7 ~()f:12S()~ & CA1212. I~C. SUBJECT PROPERTY PHOTOS Street scene looking east along NE 7th Avenue. The subject property is ahead on the right. (Photo taken October 4,2006) Street scene looking south along Seacrest Boulevard. The subject property is to the left. (Photo taken October 4, 2006) 8 ~()~12S()~ & CAl?12. I~C. SUBJECT PROPERlY PHOTOS (CONTINUED) Subject looking east from Seacrest Boulevard. (Photo taken October 4, 2006) Subject looking southwest from the intersection of NE 7th Avenue and NE 1 st Street. (Photo taken October 4, 2006) 9 ~1)~12S()~ & CAI2I2. I~C. LOCATION MAPS HYPOt.uXO R!"!' ' ".fx,I' . i"-~~'~~-/~- 0"" J. 'n" ~~~;.", l~LA:.,:,:~~'~n" --, 1'fW12Tl-4 ~ "NW1,TI1" I , { J " ! :1 il ~ ~ ~ ~ ~ MI"1'Tk I ~ \6 I ~~ " . c ] ~ :;'iE 12TH 1 ,~ !IV NE11T1'i f' oM.P.T1N UJTMV! KlhJ .iF< t I j , z = ~ ~ ! IoM.10TH l NN STM Subject Property ':;-:''1' ~<""D ON..ET :.... "C'.) . , " ~ ~ I NW'Goiio\ ;':'!f': r. Ridge "'~ Eani' , .se~o $W-CT-IoI ..... SW!!TH .se~TH JW.~T~ Ul $WelK SE en-I INE ~YJA,"" """ SW~TN $.EnH I(€PNEA S\~,-r,.; ~El>>6ItIA.R SW'9TN ~O,j~t.E "'-<s"" CASTttU,tr. """" 'i, $W-10TH. 'SW-HT~ ~ WAY C:'<<:"l~l.........LAt.n'" S\.....~2T"H p-:r.,.E.:u. ~U\.ERC HISrscl.f$ \....... Y 'I Atl.u.tS RD :~I:;c;.I..::...;.,{Il:'),l 10 ~()~t:?S()~ & CAt:?., -..::. I~C. PARCEL MAP ---~---- ~...~. .0'- J::i jf-==== .~ ~02 1:1 ' 'j~--- - -1 ~8 0010 004& 001& 12;:3(1)0 0021 0022 ~ ~- ~, o(NI.2Oo I 1 711 J [J- &700~ 0011 &7400 .__ oo..,..n. ~--m- &700 i .... I ~V 0013 '~ " 0012 I I o(Jo,5.&IJo 00141 11 ~()~l?S()~ & CAl?12. I~C. AERIAL PHOTOGRAPH It should be noted that the improvements pictured in the aerial photograph have been razed and the site is now vacant. 12 A~()-=l?S()~ & CA1212. I~C. AERIAL PHOTOGRAPH It should be noted that the improvements pictured in the aerial photograph have been razed and the site is now vacant. 13 A~()~l?S()~ & CAl?12. I~C. PURPOSE AND DATE OF APPRAISAL The purpose of this assignment is to estimate the as is market value of the fee simple estate of the subject property, as of October 4, 2006, the date of inspection and photographs. PROPERTY APPRAISED The subject property is a vacant parcel of residential land that is suitable for multiple-family development. The subject property contains roughly 4.32 acres or 188,243 square feet and is located at the southeast corner of North Seacrest Boulevard and NE 7th Avenue, within the municipal limits of the City of Boynton Beach. The subject property is currently zoned for multifamily use and has a corresponding future land use designation that would allow for development with a density of up to 1O.8dwelling units per acre (DU/acre). There is currently an amendment to the City's comprehensive plan being reviewed by the Department of Community Affairs (DCA) that would allow the city to increase densities throughout the city up to 20 DU/Acre, provided the proposed project provides an affordable housing component. Boynton Beach Community Redevelopment Agency (CRA) representative Vivian Brooks, has indicated to the appraiser that she does not feel the DCA will have an issue with approving the City's request and that the final amendment could be in place as early as December, following two public hearings in front of the city commission. The appraisers have considered the likelihood of the subject's current density increasing in this valuation. LEGAL DESCRIPTION The following legal description was taken from the last recorded deed involving the subject property. It can be found in Palm Beach County OR Book 03896, Page 0826 ~" '.> PARC~L3; t.ots I through 12 inclusive, in Block ,l;.:w- PALJif BEACH COUNTRY er.;rm'lS1'ATES, according to the Plat thereof, a~~~rded In Plat Book 11. at PIl e 43, of the Public Records of Pahrl Beach Cou '(F*rida,and the South Half (~) of the Eut Half (E\> of t.ot Z ot Subdivision 1Ji~ West Half (W\) of tbe SOutheast Quarter (BEla> or Section 21, Township 45~Uj},Rang~43 East, Boynton Beach. Palm Bmld Coun ty. Florida. acoordinj to Ui~'~~)';ereor. as ffilorded in Plat Book 1, at Pare 4. of' the hbllc Records of Pabl{ ~". unt)',. Florida, LESS the South 125 feet therc.."Of; and I.ESS tb.e rigb.t.of-way ,tor.... ~~crest Boulevard" as shown on Road Plat Book 5, lit Page 182, of the Public ''RiCCia' of PaJm Beaeh County. Florida, 14 ~()I:12S()~ & CA1212. I~C. INTENDED USE AND USER The intended use of this appraisal is to estimate market value for use by our client (the intended user), for internal decision making purposes. The client is considering possibly purchasing the subject prope~ty. This report has been prepared for no other purpose and for use by no other person or entity than for use by the client for the purpose stated herein. Any other use of this appraisal is considered a misuse and thus the appraisers will not be held responsible for any outcome associated with such use by another entity or for another purpose. This report has been prepared utilizing generally accepted appraisal guidelines, techniques and methodologies as contained within the Uniform Standard of Professional Practice (USP AP), as promulgated by the Appraisal Foundation. As a State-Certified, Licensed or Registered Trainee Appraiser, the appraisers preparing this report are bound by these standards and regulated by the Florida Real Estate Appraisal Board of the Florida Department of Professional Regulation. CLIENT Boynton Beach Community Redevelopment Agency 915 South Federal Highway Boynton Beach, Florida 33435 15 A~()~12S()~ & CAl?12. I~C. MARKET VALUE 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 ~s not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (A) Buyer and seller are typically motivated; (B) Buyer and seller are well informed or well advised, and each is acting in what he considers his and/or her own best interest; (C) A reasonable time is allowed for exposure in the open market; CD) Payment is made in cash in U. S. dollars or in terms of financial arrangements comparable thereto; and (E) The price represents normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. SOURCE: TI'tle XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA") , PROPERTY RIGHTS APPRAISED The property rights appraised are those of the fee simple estate. Fee Simple Estate Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat. SOURCE: The Dictionary of Real Estate Appraisal, Fourth Edition 2002, by the Appraisal Institute. 16 ~()~l?S()~ & CAl?l? I~C. PERSONAL PROPERTY, FURNITURE, FIXTURES AND EQUIPMENT This appraised value of the fee simple estate does not include the personal property, furniture, fixtures and equipment (FF&E), if any, necessary for the operation of the intended use of the property. TYPICAL BUYER PROFILE We found that buyers of similar properties in this market are residential developers with experience in smaller scale infill development and redevelopment. Alternative buyers would be governmental authorities for possible development of park or other civic related facilities. SCOPE OF ASSIGNMENT The traditional appraisal approaches include the cost approach, the sales comparison approach, and the income capitalization approach. We have considered all three approaches in this assignment, but found only the sales comparison approaches to be applicable. The cost and income approaches were not used. In the process of gathering data for the sales comparison approach to value, we conducted a search of our appraisal files and public information services such as the Palm Beach County Property Appraisers public access system and the Palm Beach County Clerks Office, as well as subscription based information sources such as CoStarComps.com and RealQuest.com for comparable sales in the relevant market area. The appraisers have focused their sales research on infill properties sold for residential redevelopment in the eastern portion of Central and Southern Palm Beach County. We searched for the most similar sales in closest proximity to the subject property. Our sale search included both vacant and improved commercial type properties sold over the past two years. The sales ultimately selected for further analysis were the best comparable sales we were able to find in this market. We obtained and verified additional information on the comparable properties with a party to the transaction, or a broker or agent of the parties when possible. 17 ~()I:l?S()~ & CAl?12. I~C. SCOPE OF ASSIGNMENT (CONTINUED) We have made a personal inspection of the subject property. We have made a periphery drive by inspection of the comparables as well as examining aerial photography. Physical data pertaining to the subject property was obtained from personal inspection and public information sources. We make no warranty as to the authenticity and reliability of representations made by those with whom we verified sales and other information. We have taken due care in attempting to verify the data utilized in this analysis. We based our analysis and conclusions on overall patterns rather than on specific representations. The appraisal is presented in a summary report. 18 ~()~l?S()~ & CAVl? I~C. PALM BEACH COUNTY SUMMARY 76 ~J..<:./ : ,,~ 33455 ~,' ';, ...... . ,,~< ,I, , 34956 "M:, ART I N '\~.-' :: \~" I _~, .. ,;::... ! . ~ . . . . 00 '(........ ...... '00. "'r,.~<~_. .;l~!!!l9;"~~~;~" ~\~5~ ] , er i ''*;iiu---:-\J: : i -"~3341f1 ~ :~ach , '" II " ".. 33410 ' I, " "', eo/~"- :\ .33412 ..' era Beac 33~1.j " ~' : , Palm Intern 441 B E A ,'C'.t1 , , , , ,D , 33414,-'-- . R I 11' A Palm Beach County, located along Florida's southeastern coast, is the sixth fastest growing metropolitan area in the United States. The population was 863,518 in 1990. The 2000 census reports the county's population at 1,131,184, third largest in the state with an increase of31 percent since 1990. The 2005 population estimate is 1,265,900 persons, an increase of 11.9 percent over the 2000 census. The vast majority of the growth has been a result of in-migration from the North as well as from Dade and Broward Counties. Tourism is the county's leading industry, employing over 60,000 people and generating about $1.9 billion dollars annually. The other two billion dollar industries are construction and agriculture. The expanded (1988) Palm Beach International Airport experienced their busiest month ever in April 2004 after serving a record 5.8 million passengers in 2003; a highly visible sign of the county's explosive growth. 19 ~()~12~()~ & CAl?l? I~C. PALM BEACH COUNTY SUMMARY (CONTINUED) The airports growth has necessitated new direct-access overpass-interchanges with 1- 95 (2004). Tourism and in-migration of retirees are the forces that drive the county's growth. Major private sector employers include Florida Power & Light, US Sugar Corporation, ADT/Sensormatic, Office Depot, Palm Beach Newspapers, and BellSouth, each with over 1,000 employers. However, the largest employer is the Palm Beach County School Board with over 18,000 employees. The county has the highest total effective buying power in the state. The climate and recreational opportunities attract wealthy individuals and families. The county boasts forty-seven miles of coastline, along with the Intracoastal Waterway, as well as a bounty of attractions, events, and festivals. With over 140 golf courses, the county is considered the "golf capital of the world." The county includes both unincorporated areas and incorporated municipalities; the largest of which is West Palm Beach, the county seat. Boca Raton, located at the south end of the county is the second largest city, and one of the highest income retail trade areas in the U.S. The town of Palm Beach is one of the wealthiest communities in the country. Palm Beach County had a 2005 real estate tax base of more than 653,000 properties valued at nearly $181 billion, representing a value increase ofroughly 21 % over 2004 figures. In 2005 the residential accounted for roughly 43% of the tax role with 32% more being condominium and 19% commercial properties. The balance of the tax roll was made up of agricultural properties and tangible personal property. The factors that have fed the county's past growth remain in force. As its population increases, Palm Beach County is becoming a major market in its own right. In addition, communications and information technology will allow more companies to locate here as manufacturing and transportation shrink in overall economic importance. These positive factors should benefit the county's real estate markets for the foreseeable future. The real estate market is strong, and population growth, while moderating in percentage terms, remains high on an absolute basis. As population grows, more supporting commercial, industrial and services development will be required. These factors combined with a growing economy and a finite quantity of developable land created a positive real estate outlook for the long term. 20 A~()r=12S()~ & CAVV. I~C. NEIGHBORHOOD SUMMARY A neighborhood is defined as: "A group of complementary land uses; a congruous grouping of inhabitants, buildings, or business enterprises." SOURCE: Dictionary of Real Estate Appraisal, Fourth Edition, 2002. ...,.....,.. .i f :".em .~ i " i " f ~! ""'....,"'.~! l2.j; ~ ~8tt\AY" ,. .. t; . Old Boynlon Rd T.. ~..... co C~"'CI ! ....'( ,.'.<:'4_1 . " ~'" f !Oi. .Il i '1' : r l2 '\ ! i. i VV:OcC'1ttl Ava- :i ; ~,p :::':':';0 I, ... ~uAv.. W.._ OC.~~~"'" . ~ ot?ano, A 8 Ln_owMTr.. l; , :'" i. Svw3rd ..~~ s: :;;== ! . , ,J" "'oft~)l w.&t St .,4 Sow !.d~ct ? ~,....SYll4Mh~ ~W.y ....2~~CIi" 4..#Ii,.~ .._:f I ' <fJ',,,~,,~ of) ""~!ll ~-d'""~-'\I>~ JI? ;.,"'" J'4,ilft;oS). 'l II' NJtw.L,,~;'cir q. \ ." ~ I i:i:" 0.- 1 <T ~'f8r i ,~ , 11' (_, . N.,l~Aft ',:Jr\"'11fh~ . \N.,~7ii.Ct N.'71hAv. 1"" Ct ~~"'! 'N. 14tJ1 q, """ ')' . '~ }"" _'flo_~,Ay. ff~~'.,;,.~ if ;,,~ ... '2! '19 :VJ '~ 1"~!,~:~, ~N. HwI_~. N..UthA_ :"~t2thAv. """' t _l~l, ~v.N_~:' Illl A't(o 0$ J l' l i 110. .~ o 2: b IrWt ~.~ Dr; ., """UtttAw. Nwfltt1A~ I~. .I NetthA\oo.. J .. z r if tm l')lh A'fIco;' ~ NYf"~OJf! 1If if G)N\rl!~''''Y''' i J'~~d,~.f! f ~3fdAvlt!e N. 'mAn f II" o No '11h AVIr ..-71hS'" 4thAvt!' (0 - MI h'A...o. ~. ! r . d: ;;- E.0e.e.nAwo0 _ ~ 8.. hlAv" C.~\ s.. 2nd Av. fC' HOfIJ'{Jf'ftE Ii fS....thAw.. ~ g : 3f1 !th A.\I~I' r%;~,,~ ~ ;!..l!l... S., ....... 1 ~V.;; p.. '. ...:;;: Of ~ I,:. h....Aw j,< iI'~~"'N!l S.lOthAve : 1,: 'it _~IItbo~DrS~; I' ., 11 It! Ave_,:W 0,.:, C~ Ln' ~ 8 l!j,~1 ~1 Av. '\ RMtlr. Or Jul. q.b_ " !, Nwt"Ave CocOQ.lltn Sw ZttCI An BOynton &each i~ s~~~~;;! ! S",,'thLn 7thAw * 111 <::f 91\1 Ith AVe f 9WlM:tlAW I- SW:lo,,~ !Ie B'!"Htt1~"" S<.l,.J~,~Ylll The subject property is located west of downtown Boynton Beach, in the central part of the City of Boynton Beach. The neighborhood is bound on the north by Martin Luther King Jr. Boulevard, on the south by Boynton Beach Boulevard, on the east by Federal Highway and on the west by Interstate 95. The neighborhood is characterized by older commercial properties along the major thoroughfares with moderately priced, older single family residences and multi-family residences in the interior neighborhoods. 21 ~()~VS()~ & CAl?l? I~C. NEIGHBORHOOD SUMMARY (CONTINUED) The neighborhood has good access. The primary thoroughfares are Boynton Beach Boulevard, Federal Highway, and Seacrest Boulevard. Boynton Beach Boulevard provides access to the Congress Avenue commercial district, a booming retail area, as well as rapidly developing residential areas lying west of the city. Access to Interstate 95 is located at Gateway Boulevard and Boynton Beach Boulevard. Federal Highway traverses Palm Beach County's older ,coastal neighborhoods. Federal Highway also provides access to Atlantic Avenue in downtown Delray Beach, an older commercial district that is redeveloping as a thriving restaurant and nightlife area. The City of Boynton Beach has a conceptual redevelopment plan for the district. The plan includes a mixed use project in the area of Martin Luther King Jr. Boulevard and Seacrest Boulevard. The CRA has recently purchased several parcels of land in the district and some of the commercially zoned property has been down zoned for residential uses. Infill development is underway west of Seacrest Boulevard. All things considered, this neighborhood is likely to experience stable or possibly moderately increasing property values for the foreseeable future. It is yet to be seen, as hoped by the city and local business owners, if the completion of the on- going projects will create the momentum necessary to spur a dramatic wave of new private redevelopment. 22 ~()~12S()~ & CAI?I? I~C. PROPERTY DATA Taxpayer of Record Boynton Associates L TD Census Tract ....raC; FrrE'C' ",,' "c.", ':'"'''' ........... . Parcel Control Numbers 08-43-45-21-10-001-0010 and 08-43-45-21-00-000-0021 Flood Zone Data 2006 Isformatio.o 71111 N SEACRIST BLYD BOl~'TO::\ BCH n :Str..t Addu.. 'City:';am. State Abbr Zip Code "lSA ,,10 Code 33B5 ~S..24 State Code 12 County Code 099 Tract Code 0061.00 Get Census Demographic Back 'to FFIEC ma:in Back to GeoCode: D1..!<cla.i.=r He it: ~";::.t...: elkl: tl'.-:! t!'ap - R~u.t!f !~1&p The subject property has been found to be located on the National Flood Insurance Program Map, Community Panel Number 120196 0004 C dated September 30, 1982. This map depicts that the subject is situated within an area designated as Flood Zone "C". Flood Zone "C" is defined as "areas of minimal flooding." 23 ~()r=12S()~ & CAl2l? I~C. PROPERlY DATA (CONTINUED) Assessment and Taxes The following summary is based on information obtained from the Palm Beach County, Property Appraisers Public Access System. . ,cs ..... .. "... .......... .........C;j .C~. ... ..... .... ..... ..... ..... Property Control No, Land Improvements Total Tax 08-43-45-21-10-001-0010 $571 ,539 $0 $571,539 $13,285 08-43-45-21-00-000-0021 $1,031,746 $0 $1,031,746 $24,037 Total $1,603,285 $0 $1,603,285 $37,322 The 2006 tax bill will not become delinquent until April 2007. However, according to the Palm Beach County Tax Collector Offices online public access system it appears that tax certificates may have been sold on a portion of the property for delinquent property taxes in the years 2004 and 2005. The appraisers recommend that any buyer contemplating purchasing the subject, fully investigate the delinquent property tax status of the subject property, through the Palm Beach County Tax Collectors Office. Based on the conclusions of this report, the current assessment appears to be low. A prudent purchaser would be aware of the potential for reassessment after a sale of the property and the tax bill could increase substantially. 24 ~()-=12S()~ & CAl?l!. I~C. PROPERlY DATA (CONTINUED) Zoning and Land Use The subject property is located within the corporate li~its of the City of Boynton Beach and is therefore subject to the Boynton Beach Zoning Code and Comprehensive Plan. The City has given the subject property a zoning designation of R-3 (Multiple-Family Dwelling District). These district regulations allow a maximum density of 10.8 dwelling units per acre. The city code reads: "It is the intent of this district to provide a higher residential density which encourages vertical structures and flexibility in multiple-family living and that a certain amount of multiple-family dwelling is necessary and desirable and can complement certain areas if located appropriately and if properly designed." This zoning designation allows for a number of uses by right, including but not limited too, single family residences and multiple-family residential structures (including apartments, cooperatives, condominiums, town houses, and their attendant recreational facilities). Conditional uses include but may not be limited to, churches, schools, fraternal organizations, boarding houses and private clubs. For a complete listing of potential uses allowed under the R-'3 zoning designation as well as the various site and other regulations the reader is directed to the Boynton Beach Zoning Code which is available from their municipal website at www.boynton-beach.org The City's future land use map indicates the property is located within an area designated HDR (High Density Residential, 10.8 DU/Acre Maximum). The current zoning designation is in conformity with the land use designation. It should be noted that there is currently an amendment to the City's comprehensive plan being reviewed by the Department of Community Affairs (DCA) that would allow the city to increase densities throughout the city up to 20 DU/Acre, provided the proposed project provides an affordable housing component. Boynton Beach Community Redevelopment Agency (CRA) representative Vivian Brooks, has indicated to the appraiser that she does not feel the DCA will have an issue with approving the City's request and that the final amendment could be in place as early as December, following two public hearings in front of the city commission. The appraisers have considered the likelihood of the subject's current density increasing in this valuation. . 25 ~()~VS()~ & CAVV. I~C. PROPERTY DATA (CONTINUED) Concurrency The strongest growth control measure ever imposed on Palm Beach County was passed by the Florida Legislature and became effective on February 1, 1990. This was mandated by Chapter 163, Florida Statutes, otherwise known as the "Growth Management Law." One provision of this law is referred to as "Concurrency" which dramatically limits the ability to develop real property. It is basically the requirement that adequate infrastructure be available to serve new development. Eight types of infrastructure are affected including traffic, potable water, sewer, drainage, solid waste, recreation and open space, mass transit, and fire rescue. The appraisers have assumed for this analysis that the subject could be developed at maximum of 20 units per acre and meet concurrency requirements. Utilities Municipal water and sewer are available on site. Subject Property Sales History The appraisers have not been provided with a title abstract on the property appraised, nor have they conducted a title search of their own. The appraisers have, however, consulted the Palm Beach County Property Appraiser's records and found that the subject property does not appear to have been involved in a market transaction since being acquired by the current owner in November 1982. 26 ~()~l?S()~ & CAl?12. I~C. PROPERlY DATA (CONTINUED) Site Analysis We have been not been provided with a surveyor site plan for the subject property. We have therefore relied on the legal description, aerial photography, the Palm Beach County property records and a physical inspection of the pr~perty for this analysis. Size and Shape The subject site is roughly rectangular in shape and contains approximately 188,243 square feet, or 4.32 acres. Topography This office has not been provided with a soil survey, made specifically for the subject, which would reveal the presence of any adverse soil characteristics, such as muck and/or contamination, affecting the market value of the property. Accordingly, this appraisal is subject to a formal soil survey and testing for contamination. The site is relatively level and roughly at road grade. AccesslExposure The subject can be accessed via Seacrest Boulevard on the west, NE 7th Avenue to the north or NE 1st Street to the east. Access and exposure are considered good. EasementslEncroachments Typical utility easements are believed to exist, although a survey delineating the boundaries of such was not made available to the appraisers. This appraisal assumes that there are no easements on the property that would affect its use in such a way as to have a negative impact on value. 27 ~()I:12S()~ & CA1212. I~C. HIGHEST AND BEST USE The Appraisal Institute defines "Highest and Best Use" as follows: "The reasonably probable and legal use of vacant land or improved property which is physically possible, appropriately supported, financially feasible and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility and maximum productivity" SOURCE: The Dictionary of Real Estate Appraisal, Fourth Edition 2002, by the Appraisal Institute. The highest and best use is that use of the land that can reasonably be expected to produce the greatest net return to the land over a given period of time. That is the legal use that will yield to land the highest present value, sometimes called "maximally productive". The subject site is physically capable of handling numerous improvements. Its use would be limited only by zoning, logical continuation of existing uses, and the feasibility of such uses. The zoning of the property promotes residential uses with a current maximum density of 10.8 dwelling units per acre. The site also has the potential to have its density increased if the proposed comprehensive plan amendment is adopted and certain affordable housing provfsions are met. The area was originally developed in a residential manner with mixture of both single family and multi-family uses. There are some limited areas of neighborhood commercial zoning along Seacrest Boulevard, however, the city is looking at down zoning some of these properties to encourage a predominate residential use in the neighborhood. Across Seacrest Boulevard from the subject property is a vacant multi acre parcel with the same zoning and land use designations. It has gained a site plan approval from the city for the construction of 37 townhome units and is currently in the marketing phase. Construction has yet to begin. Considering the existing use in the area in conjunction with newer planned projects and the zoning, we feel the highest and best use as vacant would be for a multi- family development that would maximize the available density and be in keeping with the overall redevelopment trend in the area. 28 ~()~12S()~ & CAI2I2. I~C. EXPOSURE TIME Exposure time is the estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal: a retrospective estimate based on an analysis of past events assumirtg a competitive and open market. Exposure time is always presumed to occur prior to the effective date of the appraisal. The overall concept of reasonable exposure encompasses not only adequate, sufficient and reasonable time but also adequate, sufficient and reasonable effort. Exposure time is different for various types of real estate and value ranges and under various market conditions. SOURCE: Appraisal Standards Board of the Appraisal Foundation, Statement on Appraisal Standards No. 6, Fourth Edition, 2002 The real estate market in South Florida has remained strong over the past several years. Most properties offered for sale have been exposed on the market for six to twelve months. Exposure times in the area have varied as some sellers were approached by buyers without directly marketing the properties, while in other cases properties have been significantly over priced and sat on the market for extended periods of time. The appraisers feel that if adequately priced the subject property would be expected to sell with an exposure time of six months to one year. 29 ~()~~Sf)~ & CA~~. I~C. THE VALUATION PROCESS Generally, the appraiser uses three approaches in estimating the market value of a particular property. As discussed in the Scope of Assignment, we have applied the sales comparison approach to value. The sales comparison approach requires that the appraiser locate recent sales of similar properties and through an adjustment process arrive at an indication of what these properties would have sold for if they possessed all of the salient characteristics of the subject property. These adjusted sales prices are then correlated into an estimate of the market value of the property via the sales comparison approach to value. The final step in the appraisal process is the reconciliation or correlation of the value indications. In the reconciliation or correlation, the appraisers consider the relative applicability of each of the approaches used, examines the range between the value indications, and places major emphasis on the approach that appears to produce the most reliable solution to the specific appraisal problem. The following section of the report describes the analytical process. 30 ~()~12S()~ & CAl?l? I~C. SALES COMPARISON APPROACH A search of the Palm Beach County Official Records, local multiple listing service records, discussions with local brokers and appraisers and a personal inspection of the subject area produced several sales of similar type properties. The sales used in the analysis were the best comparables that we were able to verify with a party to the transaction. We compared the selected sales with the subject, considering differences and possible adjustments. We utilized a qualitative process to compare the subject property with the comparables to reflect a value for the subject property. In this analysis, we considered differences between the comparables and the subject in terms of property rights sold, financing, conditions of sale, market conditions (trend or time adjustment), zoning and land use classification, location, site size, and site conditions, such as entitlements, subsoil conditions or existing improvements. The appraisers based the comparisons on a standardized unit of measure, the price per square foot of land area. The price per square foot of land area correlates well among the comparables and is commonly used by buyers in this type of analysis. The following pages feature a detailed write up of each comparable used in the is analysis, a locational map and summary of the selected comparable sales data, which is followed by a discussion of the pertinent adjustments and conclusion of value 31 ~()~I?S()~ & CAI?I? I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO.1 Our File: 210149C, 210149D, 250724, 260080 - 13B Ui:In r /~.ICl64-184 Thru 1861 ;;:;-; 'F=J=j fliXPllIl . ., ,.. . . . . .. . /~. OSR '~f:E .5' '1.'Ii"!".'r I- tt'II"I"I'II~ .'av ! -.. - ~ L:i~ r"i~ T~' (!} CF r' I on...., .EM* . ': . :-- ~ I: ~ _ 1-4) (68-431 e! U~ V ~ (1-4Jtl-tEV CDillT[iIl"CI4-T71 S;-----1. : ~ I-l..f.l:' 7 ....,:. ~ """.1 I' ,~'" " ~ .'ldL" " ',.;, : =:;'~r~K "w:: .".., . I-n .n' . ~Ir .~I rE-! L~~I.I fU ! ~.r.1..P. 4. I ". r I. :r.:.:~-=. L ., ~..~ C'I' I:....~ I "'..... ! CJ i 1.''':-0 ",;.. to II' "II: 'N__, .18. ~,...... ., J"" ~, cr:.!!>~-'I ~4-1i~ I . rill ;~F' H" _I,JI'13. ,t..: ,:. I MJ,_...., iii.lll.. l};;)Y~'~I.I~', ..'::., i .;,";- ir,r ,. , I" !I""~ DELItAY BEACH Ui... 1- I Z ~1 ~ I t11' 1 ~ "=-I-~ ~'.,..;" UEUORIN..QNlDENS " I ..",,,,'r:- n=l.~ ~ .- · Ii I 1= . - "! . 11;! Y BEACH ' '. : ~ ", ' ~ ri f<!i ~R-IA 1~1t~1 I. t";f .' PlAT No.2 111\J.111.P'4 " 1 t- !II~I~ .- _--.--10 l' ,J_J,' ~INE U6Yl" ~~: ,,~ ci TR I '.a.'~ ~1"" I ~-- ~ .' ti.... !t II I ...."...re.j .:J.6' CF ' . fa.ENrA",. ,.I~," ~ c<= ' . ~ g: !;. ....... 1t"'41 I -- " ~.. . S&H(JOL CF b b-. . ..... n 01 IJ 8 _& ~~ I ~ V;L," ,UcKll~ iiI'MCTZ9:. A ~~ ". W"' ,~~. ';'\1",,11;); I" ~I' "''''@f--'" 1\' if8 ~ ~ ~~' I ~/; ~ !'.1. ~.. ~ ; : 11I1' : ' 1\ ,:,:.,:,~~ 2. i 101 , t ~ . -;. . ; (1- 4) I' q u I JMtttIN~~" I)~~ MJ;"I' .~- - ~I ~~~ '-~I 4~11,d~ .;-. .;". I ~ I . 3 . m ' II 11M --"'"'" ' (52-7:5) I-P~Jttl iSL.t" - 10". I RM ~ ~I RM ~ ImlUH .. ." . ~ . VB" , ;';\ ~ - THE~~~~2'(llELRAY 'L1JrI' I~"" .;,IH~ 11d1.~11~i'1. '~ .!EI1jfJ'@>U-'. ""~"'IT"I.t,' IniI' ~ =;I~; 1~~IWt ~~ ~-.. ~ "':. .~. ,= :;'":' !~ ~/'l . _ 1- .....'t:"".7J1 IlEP\.AT .J;!A " .,..._~- ,- I ~ . d l..plii.; ...jll (74-8) '.CT'" ,C':,j,r ~" v.... ".,." ~1XNlO IlL . I . ! , , OR Book 18842, Page 0160 Deed Dated June 23, 2005 Grantor: Balestrieri Development Corporation Grantee: Lennar Homes, Inc. Legal: Long legal in the Southeast Quarter of Section 20, Township 46 South, Range 43 East, Palm Beach County, Florida. Parcel No.: 12-43-46-20-01-013-0010, -0020, -0030, -0040, -0050, -0060,- 0070 and 12-43-46-20-17-000-0010 Location: Southwest corner of Swinton Avenue and SW 10th Street, Delray Beach, Florida Zoning: RM, Residential Multifamily (6-12 du/ac) by City of Delray Beach 32 ~()~VS()~ & CA1212. I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO.1 (CONTINUED) Land Use Plan: Medium Density Residential by City of Delray Beach Utilities: Water and sewer Site Size: Slightly irregular in shape containing 383,328 square feet or 8.80 acres. Sales Price: $4,264,706 Price/SF: $11.13 Price/Acre: $484,626 PricelUnit: $42,647 Financing: Cash to seller Comments: The property had sold in August 2003 for $932,000 including $60,000 in the cost to remove the existing improvements. At that time the property was zoned CF with a low density land use plan. The property owners applied for a rezoning to medium density multifamily which would allow a development density up to 12 units per acre. The site was approved for the Village at Swinton Square. A 100 unit townhouse (11.36 du/ac) project with 20 percent of the units set aside as affordable "workforce housing" which would limit profit on resale in order to discourage investor purchases. Prices for the workforce units will be capped at $220,000 and they will contain 1,600 square feet of which 1,300 square feet will be under air. The market price units will have from 1,800 to 1,900 square feet under air. The site has 610 feet offrontage on S.W 10th Street to the north, 616.95 feet on Swinton Avenue to the east, 578.22 feet on Reigle Avenue to the south, and 627.20 feet along an existing subdivision to the west. A large banyan tree on the site will be retained and the site will have an overall coverage of 66 percent. Sale information confirmed by Leo Balestrieri, grantor and Andy McGregor of Lennar Homes. (wbl11/2003, 12/ 2004, 11/2005) 33 A~()r=12S()~ & CAl?12. I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO.2 Our File: 250710, 260080, 260605 - 13B and 15B . # ' .!.I I~'. " I \~J IA:: )1'0] II I .c " .. ..' ..,' 'Ii II' ".:lIr.II~ 110 J \) 1L'Ii. V1~ II i';; -AVE I - _ =:"I SE 211l ~V! .. ,~ .. ~.k . P!i' ~i' ~ 7""Ti j4"7'" ' ...' lJr.' j r ~Q I!!Ir . ... : at: .~". ~.13 l2.* I!.M~ Of= IOV ~ ..,! , .. . I- '"., ~ - I.....'.':'~ lU '......T ' 'IS' · Ii) " em:> C 12 ~a.'.~ f: ~,,: k,~,.. I~., ~If@ ~ i ,,,.,1. f, ,t J~,.r ~ 1 ; ~ .- '1 I' .".' ) 7 ~ r OS" ,'I l. , ~, , 1WiDtHl ~ '~I.MWAY FAIRFIEl.D .1 114'''' ,... l' ~t.!oIOO , APTS. ~ I....,' t ,_' icoNoo w ~ CONDo, ~ ~ /' ~~,~J,~lIO'1.' 't: ", . -;~, , ~ . l/) "" ~ O~ I PN /l,! Of f I ~l r. 2!1 ~I .. 22 ...' ..' , .... ,..~ .. Itre' "'lSD' Po lot .. ~I" ...~ ,.., t ::::I W -A V E .,;;;:::- - ...' "'1- .,' CI' It I. 4. H ...,., su- I ! ~E~:~!!'I~ :~.:i.OJ~cm~ I J (97':j~ \J 6) ,EW' I ".,il' II J 16.J f1~ lLJ 11----J7~ h'\ OR Book 18843, Page 1910 OR Book 18883, Page 1387 / i (~3 14f~ Ie ~ l"l ! ~ eM' \ ~.~. ;e ~ ~ Deed.Dated June 28, 2005 Deed Dated June 28, 2005 Grantor: David C. & Elaine B. Baker and S & L Investments, LLC Grantee: 2319 South Federal Partners, LLC Legal: Lots 1 through 5, Robinson's Addition to Boynton Beach, Plat Book 23, Page 144, Palm Beach County, Florida. Parcel No.: 08-43-45-33-06-000-0010, -0030, -0041 and -0042 Location: Northwest corner of South Federal Highway and SE 23rd Avenue, Boynton Beach, Florida 34 ~()~VS()~ & CAl?12. I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO.2 (CONTINUED) Zoning: C3 and C2, Commercial by City ~f Boynton Beach. Land Use Plan: LRC, Local Retail Commercial by City of Boynton Beach. Site Size: Generally rectangular site containing 54,976 square feet or 1.26 acres. Sales Price: $2,341,000 Price/SF: $42.58 Price/Acre: $1,857,937 Price/Unit: $106,409 Financing: Cash to seller. Comments: Sale involves the assemblage of several tax parcels in two separate but related transactions which both closed on the same day. The property was rezoned subsequent to sale from commercial to multifamily and is planned for the development of 22 three story 3 and 4 bedroom townhomes over first level garages, The development will named Hemingway Square. The long range land use plan will allow up to 20 units per acre but with open space and parking requirements the current plan is to develop the site with a density of 17.43 units per acre. Prices were not disclosed but five units have been sold as of March 2006. Property was under contract for a 60 day due diligence period with a 30 day close. Sale information confirmed by John B. DeMeo in November 2005 and again on March 3, 2006. (wbl, gko) 35 ~()~12S()~ & CAV12. I~C. SALES COMPARISON APPROACH (CONTINUED) f r I I I I I I , , I r I ' I I I I I I ~ I i I i i ' I J ;' f I OR Book 19167, Page 1554 C4 t.....x~ en ,o:p .,~~; 1.~ .~;:l , ~,~,".~~-1.L;" .'."".',,1;'\ .";,,,! 63"';:' Deed Dated August 25, 2005 Grantor: Langston Bag Co. of Florida Grantee: Boynton Townhomes, LLC Legal: Lots 37, 38 and 58, AMENDED PLAT OF TRADE WINDS ESTATES, Plat Book 21, Page 73, Palm Beach County, Florida, Less that portion deeded to the State of Florida by instrument recorded in Official Records Book 104, Page 35, Palm Beach County, Florida, Parcel No.: 08-43-45-04-17 -000-0370 08-43-45-04-17 -000-0380 Location: East side of Old Dixie Highway, west side of Federal Highway, (more frontage on Old Dixie Highway) south of Miller Road, 1/3rd mile north of Gulfstream Boulevard, Boynton Beach, Florida 36 ~()I:12S()~ & CA12l? I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO.3 (CONTINUED) Zoning: At sale: C3 and C4, Community and General Commercial, by Boynton Beach Proposed: IPUD, Infill Planned Unit Development by Boynton Beach Land Use Plan: At sale: Local Retail Commercial and General Commercial by Boynton Beach Proposed: Special High Density Residential Area by Boynton Beach (Maximum density of up to 20 units per acre) Site Size: 121,400 SF or 2,78 acres Utilities: Electric, Public Water, Sewer, and Telephone Sale Price: $3,000,000 $24.71 Price/SF: Price/Acre: $1,079,137 Price /Unit: $54,545 (based on maximum potential of 55 units) Financing: No impact Comments: Sale verified with A. Guy Neff, Esquire, as an arms length transaction with no known seller concessions. (mjb 7/2006, bma 10/2006). 37 ~()~VS()~ & CAVV. I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO.3 - 1415 S. Federal Highway, Boynton Beach, FL 33435 Our File: 260450.001, 260605 -15B & 13B ;'\ \. WI,~ r ~G' '- .3 F Z ,.1l-'$@I,,';1.!!'.'rIIIJ:._-' ~ · r (2!51:1 ~~ ,,+,... 2 ,..) ~ ~,J:/ IS. I. ';"r; ? .. .. . 1- ~~ ~J ~ l;; .;;:. 2)'~ ... ~_. ~. ~ .~= l~A' ..... -..: AvE .'~ .@j.J.'Illl.""f.,4.... Ul !:~-' ~ : ~ (4-211) ... ~ " ., '. - ~ . . J := .", ;.1 IJ ~ ~~w ~ 1',.1, ;J 1 ..~ . ~ ._~". ~ ..'-1....1:, ~,eotwo "OLONIAI... Nil..IIIc+"; ~li!'" ,. --!l ~ I th NE--" .. ) ENTER .. '~~.".' --" /'" ~~ ..':."~'" .", ~k~" .~ ~~'JI" I' r,.. ONOO. ~ - _~ . :zo 10 - ~,!E _ ~ .~'"' =-' ' ~c T ~L KI.', ~ i "~ ~ ..... t... "-.. -." ~ ", I!,~ ,~'. U> .... ._" -J _ ~ u ~~:' .. ,-' .Ii' , ._"!It '"" ._T _ r2"'2"~..:.I):~ \' ! I,.., ao '", II U '..oJ" ~ !~. ;;;. MA a[ .. . .. ..: ...~ IL f '-.: SN.JG~, "Ive:'~ C3 ~ ~s ~ '; ~ J ~III".A .. 'i'\. GIV la.4S At.. OR Book 19179, Page 1294 Grantor: MJ ..... ~ R3 SEE SEe 2'T ..- C~=D ~" 27 Deed Dated August 29, 2005 Gulf Stream Lumber Company Grantee: Boynton, Inc. Legal: Lots 29 and 30, Block 2, Revised Plat of Boynton Heights, Plat Book 10, Page 64, Palm Beach County, Florida. Parcel No.: 08-43-45- 28-00-000-5090 08-43-45- 28-00-000- 5100 08-43-45- 28-01-000-0060 08-43-45-28-01-000-0121 08-43-45-28-01-000-0130 08-43-45- 28-01-000-0140 08-43-45-28-01-000-0150 08-43-45 - 28-01-000-0160 38 08-43-45-28-01-000-0170 08-43-45- 28-01-000-0190 08-43-45- 28-0 1-000-0200 08-43-45-28-01-000-0240 08-43-45-28-01-000-0260 08-43-45-28-01-000-0270 08-43-45-28-01-000-0290 ~()~I!S()~ & CAI!12. I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO.4 (CONTINUED) Location: The northwest corner of the intersection of South Federal. Highway and Woolbright Road in Boynton Beach, Florida Zoning: MU- L by Boynton Beach (Maximum density of up to 40 units per acre) Land Use Plan: Mixed Use Site Size: 646,989 SF or 14.85 acres Utilities: Electric, Public Water, Sewer, and Telephone Sale Price: $14,950,000 Price/SF: $23.10 Price/Acre: $1,006,734 Price /Unit: $30,263 (based on m494 units) Financing: No impact Comments: According to the selling agent, Robert Dockerty, this property was in escrow for three or four years. There was environmental remediation necessary, The buyer intends on developing a multi use project which will include retail, office and 494 residential units. There were no seller concessions and this was an arms length transaction. (mjb 7/2006, bma 10/2006). 39 ~()~VS()~ & CAVV. I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO.5 -125.131 SW rt Avenue, Boynton Beach, FL Our File: 260450.001, 260605 - 13B Siti,;!. ~:~ '2....: .~Si A.VE. :.'::(!:; ::":;aE):::;';:~L-'1:'':;~~~;:'4~,. I')U:tl:~ h ~ p .. ! PU OR Book 19322, Pages 1842,1843 & 1844 Deed Dated September 22, 2005 Grantor: Matthew Williams and Dianne Williams Grantee: Pozzi-Weston Development, LLC Legal: Lots 35 and 36, Block 12, Boynton Heights Revised Plat, Plat Book 10, Page 64, Palm Beach County, Florida. Lot 31, less the West 5 feet thereof, Lot 32 and 33, less the East 20.5 Feet thereof, Boynton Heights Addition, Plat Book 10, Page 64 Palm Beach County, Florida. Lot 34, and the East 20.5 feet of Lot 33, Block 12, Boynton Heights Addition, Plat Book 10, Page 64 Palm Beach County, Florida Parcel No.: 08-43-45-28-10-012-0350 08-43-45-28-10-012-0311 08-43-45- 28-10-012-0331 40 ~()~12S()~ & CAl?12. I~C. SALES COMPARISON APPROACH (CONTINUED) SALE NO.5 (CONTINUED) Location: North side of SW pt Avenue, east of SW pt Street and west of Seacrest Boulevard, Boynton Beach, Florida Zoning: R2 - Duplex by Boynton Beach Land Use Plan: Medium Density Residential Site Size: 17,400 SF, 0.399 acres (145' x 120') Utilities: Electric, Public Water & Sewer, and Telephone Sale Price: $375,000 Price/SF: $21.55 Price/U nit: $125,000 Financing: No impact Comments; This sale was verified with Matthew Williams, the listing agent and owner. The sale consisted of three parcels, sold together, but recorded separately. There were no seller concessions and this was an arms length transaction. The buyer intends to build three custom Key West style single family homes on the sites. One 1,730 square foot, 3 bedroom/2 bathroom home with a 1 car garage has been built so far and is listed for sale as of 10/2006 at $459,900. (mjb 7/2006) (bma 10/2006) 41 4.~f)I:l?'()~ <I: t::4.l?l?~ I~t::. SALES COMPARISON APPROACH (CONTINUED) Comparable Sales Map .~If ~~_/-- I .e.c.IBD-...._/'\_____'',;... ",~"....,.""" Oelra.}( ~ad~ Gio1~ C IL:t~ I !.d" 1 ~i "-,, v' Beach ,,1 . '. ""'-7 - , ., i ,J,. J 1. 1.'1,11' .'~""':;:"'rl . .. .,' ~ -=-...-......~.f' ,~,... N1 fI J -Jr--" . ! y e...=t )1 42 ON .......___M~-f'm~--I + . ," ". ,',' . c :X'J ~ "'-..... """ C :O":>D/k', ~l,.j] "OJ] ~f)I:l?'()~ <I: t::Al?l?~ I~t::. SALES COMPARISON APPROACH (CONTINUED) Sales Summary and Discussion CQMP.A.RASLE SALES SUMMAR Vj Sale Sale Date Location Comments Purchase Land Price/ SF OR Bk/Pg Price Area (SF) Land Jun-2005 Southwest corner of Swinton Approved 100 unit 1 18842/0160 Ave and SW 10th Street, townhouse project with 20% $4,264,706 383,328 $11.13 Defray Beach workforce housing set aside Jun-2oo5 Northwest corner of S Federal Plans to develop with 22 2 1884311910 Hwy and SE 23rd Ave, $2,341,000 54,976 $42.58 1888311387 Boynton Beach townhome units Aug-2005 West side of N Federal Hwy, Proposed Zoning and Land 3 19167/1554 just south of Miller Road, Use to allow a potential of $3,000,000 121,400 $24.71 Boynton Beach up to 20DU/Acre Aug-2005 Northwest corner of S Federal Mixed use: office, retail, 4 Highway and Woolbright and 494 residential units. $14,950,000 646,989 $23.10 1917911294 Road, Boynton Beach Long escrow Sep-2005 INorth sIde of SW 1st Avenue, 5 1932211842- east of SW 1st Street and west Plans to develop with 3 $375,000 17,400 $21.55 of Seacrest Blvd, Boynton single family homes 1844 Rpo~h Date-of- Southeast corner of N Seacrest Current Land Use allows Sub. Value Blvd and NE 7th Avenue, 10.8DU/Acre application NA 188,243 NA Oct-2006 Boynton Beach made for 2ODU/Acre Property Rights The property rights transferred were believed to be fee simple. No non market leases were known to be encumbering the sales. Thus, each of the comparable sales utilized here represent both the fee simple and leased fee estates. No differences between the sales and the subject are reflected. 43 4.~f)I:l?'()~ <I: t::Al?l?~ I~t::. SALES COMPARISON APPROACH (CONTINUED) Sales Summary and Discussion (Continued) Financing We considered any indication of favorable financing. All of the comparable sales were either on a cash basis, or had market oriented financing, and, therefore, no differences were noted. No adjustments have been made for financing. Conditions of Sale The property rights transferred were fee simple. The appraisers were unaware of any of the comparable properties being encumbered by leases that affected value. Therefore, no adjustments were made to these properties. Market Conditions The date of value is October 4,2006. The sales occurred over the period from June 2005 to September 2005. The sales data for this market does not give a clear indication of a significant change market conditions for similar type properties over the period in which the sales occurred. None of the comparables have been adjusted for market conditions based on the date of sale. However, both comparables 1 and 4 were known to have been under contract for extended periods of time and although they have recent closing dates the sales prices are not reflective of the market for that time period. Hence, these comparable sales warrant some upward adjustment for time. 44 ~f)I:l?'()~ <I: t::Al?l?~ I~t::. SALES COMPARISON APPROACH (CONTINUED) Sales Summary and Discussion (Continued) Location The subject is located on a well traveled secondary thoroughfare (Seacrest Boulevard) and is close to the downtown central business district of Boynton Beach. The immediate neighborhood has generally underperformed other local markets and has been characterized in the past by stagnant growth and fair to average property maintenance levels. However, the City and the CRA have begun to focus on improving the neighborhood through both public and private investment in the area. Comparable 5 is also located in the city of Boynton Beach and is only about 8 blocks south of the subject. However, it is located in a different neighborhood that exhibits higher property value levels than that of the subject's immediate neighborhood. Hence some downward adjustment for location is warranted. Comparables 2, 3, and 4 are located in Boynton Beach, as well. However, each is located along the Federal Highway Corridor, which is a significantly superior neighborhood area to that of the subject. Each of these sales also warrants downward consideration for superior location. Sale 1 is located within the City of Delray Beach, in a neighborhood area that is similar to that of the subject. No location adjustment is warranted for this comparable. Size Generally, larger properties will sell for a somewhat lower price per square foot than smaller ones, and vice versa, when all else is equal. Conversely, the smaller a property becomes the less development potential it may have without assembling it with other properties. The comparable sales utilized herein vary widely in size. However, the sales do not clearly indicate the need for a direct size adjustment. Therefore, no adjustment has been made. 45 ~f)I:l?'()~ <I: t::Al?l?~ I~t::. SALES COMPARISON APPROACH (CONTINUED) Sales Summary and Discussion (Continued) Zoning / Land Use / Density The subject is currently zoned for multi-family use with a density of 10.8 dwelling units per acre and likely potential of up to 20 DU/Acre, if the proposed project contains some affordable housing. The comparable sale properties had varying zoning and land use designations at the time of sale, including multi-family, commercial, and mixed use. However, each comparable was purchased with the intent to ultimately develop it with a residential or mixed use. Some properties fronting Federal Highway required zoning changes from commercial to residential. Normally, some sort of adjustment would be warranted for zoning. However, because the zoning changes consisted of a down zoning of the site from a more intense use, then the need for adjustment is less critical as the risk and uncertainty of whether such a request would go through is diminished. Probably the most important factor in the zoning and land use discussion is the overall density associated with each comparable. Sale 5 has the most restrictive zoning and lowest density of the comparables. It is inferior to both the proposed density of the subject and the existing. It warrants upward consideration for inferior density. Sale 1 calls for an overall density similar to that of what is currently allowed on the subject property. However, it requires a 20% affordable housing set aside that reduces the overall potential profitability of the project. The subject would have a 20DU/Acre density were it to have an affordable housing element. Hence, some upward consideration is warranted. Sale 4 had a mixed use designation and a potential density of up to 40 DU/acre, although it will ultimately be developed at about 33DU/acre. This site is deemed not only superior to the subjects current density, but that of it's potential density of up to 20 DU/acre pending the proposed comprehensive plan amendment discussed earlier in the Zoning and Land Use section of this report. Downward consideration is warranted for this sale. 46 ~f)I:l?'()~ <I: t::Al?l?~ I~t::. SALES COMPARISON APPROACH (CONTINUED) Sales Summary and Discussion (Continued) Zoning / Land Use / Density (Continued) The remaining two comparable sales, 2 and 3, each required zoning and land use changes in order to be developed residentially, unlike the subject which already has the zoning in place for up to 1O.8DU/Acre. Ultimately, however, they were granted densities that were higher than the subjects existing and in line with that of the subjects proposed. Additionally, to the appraisers' knowledge these projects did not require a provision for affordable housing. Overall, the need for and cost of a zoning change was deemed to be offset by the density that was ultimately rewarded. Hence, we have not adjusted these sales for Zoning / Land Use / Density. Miscellaneous Site Conditions Another factor considered here is the existence of any physically detrimental site conditions such as contamination or muck, or the presence of any development entitlements that run with the land, i.e. site plan approval. None of the sales were known to be significantly impacted'by soil conditions. Comparable 1 sold with site plan approval being in place. Site planning is an entrepreneurial process with costs associated with it that sometimes can be quite extensive. A site plan approved site is more desirable than a "raw" site. That said, it appears that the buyer may have covered some of the site planning costs, therefore, this sale has received only some downward consideration for this factor. Conclusion Considering all of these differences, we developed the following qualitative comparison chart listing the sales as they compare to the subject property, based on a price per square foot of land area. Not all categories considered are depicted. Those omitted reflect no differences between the sale and the subject property. 47 . ~ z - ., ~ ~ ~ ~ Z Q ~ ~ ~ ~ ~ ----- ~ ~ ~ z E: z o u '-' = ~ ~ ~ e;: z o 00 ~ ~ o u 00 ~ ~ 00 ----- "Cl Q,l = = .... - = = u '-' = = .... [I'J = - Cj = = u I'.~ ] I "8 j i... , , I:; . " . , , " '" c:: o E ".;:3 Vi:g o U __ Cl) ~;5 'S "8 ~j . I '" c:: ] .~ "';a '" c:: ~8 '" c:: .~ ~ ;ar;n c::.... o 0 U ... 8.~ 8r;n 'C lJ.. c:: ,9 ~ '-' .s "200 "'~ O!:Q .2~ ~O Cl) <<; r;n c:: - .9 ~ ~ Cl) U O:g .... c:: .s~ <Ll _ ... - 0..-; ~ ... .!9 's II Vi ... o 'C + ~ c:: .... <Ll N Vi ... .!9 's II Vi c:: .9 ~ u .s ... .!9 .s II Vi OIl c:: .S: + ~ + .... ... .!9 's II Vi <') ~ - - ..-; ~ ~ 00 N <') "" 00 <') c:: o c :~ <> ~. ~ ~V5 ... ,.c ~o e;~..c ~ ~ ~ ~"'tj~ ~ ~ ~ -= Q) ..!:: JJ~o o II") \0 0_ 00 ~N c:: "'" ::lOO ....00 - c:: "'00 :~ 3~ ... .!9 's II Vi !:i o ~ Z ~ :0- '" ... .!9 .S II Vi ... o 'C <Ll . 0..' ::l r;n ... .!9 's II Vi ... '" ] II Vi 00 II") N "'" ..-; \0 r-- 0-, .,;- II") c:: <<; 0 ~ C "0 ~ ~i:Q r;n oi 'O~ :u "E c::<') "'N 8 ~ -:;;r;n <Ll "0 ~~,.c 'g ~ ~ Z:I:~ or-- II") _ 00 00-,<') 0__ N---- Q~~ ::lOOOO .... 00 00 - ..... N c:: "'- ~~ 3~ ... .!9 's II Vi c o ~ Z ~ :0- '" ... !:l 's II Vi ... o 'c <Ll ' 0..' ::l r;n ... !:l .s II Vi ... !:l 's II Vi ..... r-- .,r. N ..... o o ""'. ..... N - ~ . :I: "0 '" o ~ <<; ... OJ) ~~ ~ .- Z~ ,.c ~ .... .... Cl) ~.,g!:Q "'0 ::; J:: "r;s 0 B ~ '" c:: '" ~ ,.., Cl) '" 0 ~ ,2, i:Q ;g;?; 011") N~ . r-- OIl \0 ::l ..... <Co-, ..... <') c '" 0 ~;;; 3~ ... !:l 's II Vi ... o 'C Cl) .. 0.. ::l r;n ... !:l 's II Vi ... ,9 ... . 8,. ::l r;n OIl C 'S; + ~ + .... ... '" ] II Vi o ..... '" N ..... 0-, 00 0-, -.D "'" \0 ." <<; '" ... 0 ~~ OJ).E ~ OIl r;n 'C .... .D 0'0 ~ 0 E~'5 o "0 '" u c:: Cl) -:;; '" !:Q Cl) ~ c:: ~ ~ .8 t:~~ ~:E~ ;g;;!; ON N~ . 0-, 0Ilr-- ::l _ <Co-, - ..". c:: "'II") -:all! '" ..... 3~ ... '" ] II Vi ... o 'C ~ + c:: .... ... !:l 's II Vi ... o 'c OJ) . 0..' ::l r;n ... !:l 's II Vi ... !:l 's II Vi II") "1 ..... N ..... o o "'" r-: ..... Jt; ::l Cl) c:: ~ OJ) "0 ~ ~ c:: o !:i ~ ~ ,.., '" Cl) 0 ""'~i:Q ci5-o- > ai ~ r;n .... '" 0- :-2~ '" r;n ,.c.... t: .2 ~ ~ II")N 8~..". N-"'" .1NOO ~N ..... r;n~ - II") ~ ~ ~ ~ ~ ~ ~ 00 "<:t ~ <') c:1i 00 00 - ~ '" ~ U ",,.c ~ ~ .... Cl) O!:Q - '" OJ) ... U ~ oi r;n ::l Z ~ 'O~ :0-= E~f1 o ~ '" ~Z~ '" "0 c:: '" c:: 0 ] '" C :; ] ~ JJ!:Q!:Q OJ) ::l <<;\0 >8 ~~ Z 0 ~o o .D ::l Vl ~f)I:l?'()~ <I: t::Al?l?~ I~t::. SALES COMPARISON APPROACH (CONTINUED) Conclusion (Continued) The preceding qualitative comparison chart shows th~ overall unadjusted value range for the subject property based on a price per square foot of land area to be roughly between $11.00 and $42.00. The adjusted range indicates a value more than comparable sale 1 at $11.13 per square foot and less than comparable sale 5 at $21.55. It is also notable that three of the sales show a clustering of sale prices from $21.55 to $24.71 per square foot. Sale 1 is a very good comparable because it is located in a similar neighborhood and has an affordable housing provision. However, its density is somewhat lower than the subjects and it requires an upward adjustment for time as well, due to its long escrow period. Sale 5 had an inferior density. It was located in close proximity to the subject, but within a significantly superior neighborhood. The subject would not likely command a price at the top of the range. Considering the available market data we feel a conclusion above the middle portion of the range is appropriate. Therefore, given the preceding data and discussions it is concluded that the market reflects a market value for the subject property, as of October 4,2006, of $18.00 per square foot. 188,243 Square Feet @ $18.00 per square foot = Rounded to: $3,388,374 FINAL MARKET VALUE ESTIMATE $3,400,000 49 QUALIFICATIONS OF APPRAISER ROBERT B. BANTING, MAl, SRA PROFESSIONAL DESIGNATIONS - YEAR RECEIVED MAl - Member Appraisal Institute - 1984 SRA - Senior Residential Appraiser, Appraisal Institute - 1977 SRPA - Senior Real Property Appraiser, Appraisal Institute - 1980 State-Certified General Real Estate Appraiser, State of Florida, License No, RZ4 - 1991 EDUCATION AND SPECIAL TRAINING Licensed Real Estate Broker - #3748 - State of Florida Graduate, University of Florida, College of Business Administration, BSBA (Major - Real Estate & Urban Land Studies) 1973 Successfully completed and passed the following Society of Real Estate Appraisers (SREA) and American Institute of Real Estate Appraisers (AIREA) courses and/or exams: Note: the SREA & AIREA merged in 1991 to form the Appraisal Institute. SREA R2: SREA 201: SREA: SREA: AIREA IB: SREA 101: AIREA: AIREA: AIREA: AIREA 2-2: AIREA: AIREA: AI REA: Case Study of Single Family Residence Principles of Income Property Appraising Single Family Residence Demonstration Report Income Property Demonstration Report Capitalization Theory and Techniques Introduction to Appraising Real Property Case Studies in Real Estate Valuation Standards of Professional Practice Introduction to Real Estate Investment Analysis Valuation Analysis and Report Writing Comprehensive Examination Litigation Valuation Standards of Professional Practice Part C ATTENDED VARIOUS APPRAISAL SEMINARS AND COURSES, INCLUDING: The Internet and Appraising Golf Course Valuation Narrative Report Writing Appraising for Condemnation Condominium Appraisal Reviewing Appraisals Eminent Domain Trials Tax Considerations in Real Estate Mortgage Equity Analysis Partnerships & Syndications Advanced Appraisal Techniques Federal Appraisal Requirements Valuation of Leases and Leaseholds Valuation Litigation Mock Trial Rates, Ratios, and Reasonableness Analyzing Income Producing Properties Standards of Professional Practice Regression Analysis In Appraisal Practice Discounting Condominiums & Subdivisions Condemnation: Legal Rules & Appraisal Practices Analyzing Commercial Lease Clauses Testing Reasonableness/Discounted Cash Flow Hotel and Motel Valuation Analytrc Uses of Computer in the Appraisal Shop Residential Construction From The Inside Out Development of Major/Large Residential Projects Federal Appraisal Requirements Engaged in appraising and consulting assignments including market research, rental studies, feasibility analysis, expert witness testimony, cash flow analysis, settlement conferences, and brokerage covering all types of real estate since 1972. President of Anderson & Carr, Inc., Realtors and Appraisers, established 1947 Past President Palm Beach County Chapter, Society of Real Estate Appraisers (SREA) Realtor Member of Central Palm Beach County Association of Realtors Special Master for Palm Beach County Property Appraisal Adjustment Board Qualified as an Expert Witness providing testimony in matters of condemnation, property disputes, bankruptcy court, foreclosures, and other issues of real property valuation. Member of Admissions Committee, Appraisal Institute - South Florida Chapter Member of Review and Counseling Committee, Appraisal Institute - South Florida Chapter Approved appraiser for State of Florida, Department of Transportation and Department Natural Resources. Instructor of seminars, sponsored by the West Palm Beach Board of Realtors. Authored articles for The Palm Beach Post and Realtor newsletter. Real Estate Advisory Board Member, University of Florida. TYPES OF PROPERTY APPRAISED - PARTIAL LISTING Air Rights Medical Buildings Amusement Parks Department Stores Condominiums Industrial Buildings Mobile Home Parks Service Stations Auto Dealerships Vacant Lots - Acreage Shopping Centers Leasehold Interests Apartment Buildings Hotels - Motels Office Buildings Special Purpose Buildings Residential Projects Financial Institutions Churches Marinas Residences - All Types Restaurants Golf Courses Easements "I am currently certified under the continuing education program of the Appraisal Institute." QUALIFICATIONS OF APPRAISER BEAU M. ARNOLD GENERAL INFORMATION State Certified General Real Estate Appraiser RZ2937 State Licensed Real Estate Sales Associate SL3076071 EDUCATION AND SPECIAL TRAINING Graduate, University of Florida, College of Business Administration, BSBA (Majors - Real Estate and Management) 1997 Successfully completed and passed the following courses: UF: UF: AI 200R: AI 300GR: AI 1310 AI I41ON: AI 520: Real Estate Analysis Real Estate Valuation Residential Market Analysis and Highest and Best Use Real Estate Finance, Statistics, and Valuation Modeling Basic Income Capitalization National Uniform Standards of Professional Appraisal Practice Highest & Best Use and Market Analysis Engaged in appraising and researching real estate with Anderson and Carr, Inc. since May of 1997. TYPES OF PROPERTY RESEARCHED Vacant Commercial Land Commercial Buildings Vacant Residential Land Single Family Residences Rights-of- Way Special Purpose Properties Service Stations Residential Condominiums TYPES OF PROPERTY APPRAISED Single Family Homes Condominiums Vacant Commercial Land Vacant Residential Land Agricultural Land Commercial Buildings Proposed Construction Net leased Properties Public Land Office Properties Special Purpose Properties . Rights-of-Way Easements Vacant Multi-Family Land Industrial Land Apartment Buildings Warehouse Buildings Gas Stations Subdivision Land Restaurants Shopping Centers HUD-1 A. SelUement Statement B. Type of Loan U.S. Departmenl of Housing 8l1d Urban Devalopment OM6 No. 2502-0265 o I,FHA O..VA o 2, FmHA 0 3. Conv. Un"'.. o 5. Cony. Ins, &, File Numller 07-0023 7, Loan Number 8. Mortg. Ins, Case Num. D. NAME OF BORROWER: Add...... of Borrower: c. NOtE: This fonn Is furnIshed to give you a stalement 01 actual selllsmenl costs. Amounls paid to and by lIIe selllemenl agant are shown. lIems marked '(p.o,c.)' were paid outside the closing; "'ey are shown here lor Infonnllllonal purposes and are not Included In the lolals. 10: e. NAME OF SELLER; Add..... Of Seller: Boyntoo Beach Communi.y Redevelopmen, Age.cy, . public agency crealed pursunDIID Chapler 163, Pon HI. of Florida Sla'ules 915 South Fed"",1 Highwoy, BoynlDD Beach, FIorido 33435 1031 Exchangc CorpornlioD as Qualified lnlCrmediary for BoynlDn Associ..... LId" a Florida IimilCd partnership 114 North Federal Hiahway. Suite 202. Boynlon Beach, Florida 33435 TIN: 39-1421057 F. NAME OF LENDER: Add..... of Lender: G. PROPERTY LOCATlON: H. SETTLEMENT AGENT: P/ace 01 Seltl_t: I. SETTLEMENT DATE: 800 North S..""", Boukvanl, Boyolon Beach, Florida 33435. 700 North Seaercs, Boulevard, BoynlDo Lewis. Loasnw> & \yolker. P.A. 1700 Palm B..... Lakes Blvd.. Suite 1000. West Palm Beach. Florida 33401 TIN: 65-0500793 Phone: 850-222.5702 05/17/07 DISBURSEMENT DATE: 05117/fJ7 101. ('_,..... ptke 6.500.0??.oo 401, Caotna....... ptkc 6.$00._00 102. """""'I...."...y -IIl2. f>tn....1 p-openy 103. SeaIoJO:lll........ w """ower (Une 14001 2.1,319,50 403. 104, ""1m Bouch ('....,y ......., Fee (,redib $00.000,00 404. P-oIIm Beaeb C_, Impoc. Fee C'ed.. $00.0011-00 105. 405, 10li. lity/town ...., 4OCS.Cltyllowu'la.Xes 107.Cocuu)'\IIlteS 407, Counl)'b~ 108. .\Ilnsments. 408. AucssJ1l:RlS 109. 409. 110. 410. III, .11. 112. 412. l2O. G__.ue....... ~ 7.D23.3'9,50 42f, Gr... _, d..lo-.., 7,000.000,00 201.1loposJ,..-......t ......y 650.000,00 501. e""," deposl. (see ""-'ions) lO2.l'rioeIpaI_or....Iooa(,) .lO2. SeltleOlClll........1O ..11or (Iiae 1400) 1.589,832.18 203, eu.... k>m(.) lateD nbJe<11O 50), EJd'lina .'1 11Il;.ll1Ib.i<cJ '" lOa, PriIld...I_or......._. >>I. PayofT orfil>llIIllIlpge.... 4,J2lI.477.Al1 20'. 50', Poyolr or sec:oad mong.gc loin :168;670.14 :!OCi. '06. Deposiu held by JdJu :!117, PriaeIJlll'Dl1ll 01 mon_ ...'" by selle, 507. PriacipI11lII or....".", belcl by selle, :!OlI. 508. :!09. 509. JID. C".aI)'IIown lire. -'10. Cityhown blllClo 21 J. C~NY taxea 511. COUDI)' Wlle, 213.. AncslnalJ; S12. Ancsslh:JlIJ 213. 513. 214. 514, 215. 515, 216, 516, 217. 517. 218. 518. J19. "9, m. ~poId"'llilr_wer. 650,000.00 no. Too.. reducUOnllD IIIIOUDC due HIler: 6.286.979,80 301, Groos amount due ~om bon"ower 7,023,318.50 601. Gmss amount duo 10 ....., 7,000,000.00 PIne1:lD) (lint 420) 302. lllSS _I paid byIIor Ihe borrower (650,000,00) 602. l...loIal redUCtions In amount due seller 18.286,979,80) (Uno 220) (line 520) 303, Cesh ( 0Frcm OTo ) Barr...: 8,373131tl6O 803, Cash ( 0To o From ) Seller. 713.020,20 SUb.Ufule fclrm '099 Seller Slatem'"t: The /nfonnallon conlalned In blOCks E, G, H, and 1 and on Une 401 Is Impor1anllax Information and Is being 'umlshed 10 the IRS. " you are required 10 fUe a relurn. a negfigencB penally or other sanction wUl be Imposed on you II thIs Item is requIred 10 be reported and lhll.fRS determines lhallt has nof been reported, Sellllt' InslnlcUone: "thls'i'ealeSlale was your princlpaf residence. tile Form 2119. Sa/e or ElCChange of Principal ResIdence, for any gain. with your tax return; tor other transaclions. complete the applicable parts 01 Fonn 4797, Form 6262 and/or Schedule 0 (Form 1040). tSAJ;tiallsl: Se/Ie~s Inilial(s): L 1 ""-......'-...1_..01';'1 HUD-l U.S. Dep8llment of Housing and UJban Development Page 2 Paid from Paid from 700, 'r0ll1 Sule-... C.an. boscd GO price $6-'00.000,00 . 11.. Borrower's Seiler's 101. 11.10 Funds at Funds at Sehlement SeUlement 702. '1'.. 103, C.......ion paid ., ..1lIc:""", 104, .10 801, l..oiaD .......'cc "" ,. B02. ~- 11>,. lIOl. APPRi"!i.... ,. 104, C'rodll....... ,. 80S, Lendor'a ilupc_ ree .. Btl6. Mi:II1pge.jnsurance applicillion.fee I. 807. AIS1Uq:IUoaFee I. B08. ,. 1109, ,. , BID, .. BlI, '" 901. ........- '" . ,., 002- ~ ~;';;:::;-...ror ....1I>s '" 00), IluudlM_ pre..... ror .tnn 10 lJ04, Rood.......... pl<lnIum fat JftlJ 10 lI05. .....'" lOOt "-d IasmDce -. ,..,- 1001 Manwc ""...... -. pcrmoadl 1.003, t1ly JlI1lp<rl)' ..... -u.s. ..;lIIOIIth 1004. ClllIIlyJll1lp<rl)'..... -. ........." 1IIOS. """"" ............ -. pcr....." 1000. Rood......... _Ii> pet ....1lI 1007. -II per momJJ 1001. molllbl e ""....... 1110II, ............ ....... 1I0J, ~lWe"'I.."" I. IAwla, Loocmaa " W..... P.A. 250,00 250.00 lip:!. Abar.c1or Iklc """"h 10 Finl Amorican 1111: /no...,.,e C.>qJlID, 250.00 1103, TIlle e:XlmiAatlon 10 Lewis, Lao.....,,, W...... P,A. m.oo 11001, 1111: insunac:e biadct 10 IIQj, ll<Icumoll _uralklu to Lewia:. Longmu A: Walter. P.A 00,00 90.00 1106. NOIloy fi:cs ,. It07, A._,.a Fees .. Lcwis.l.oopoaa" Walter, P,A. 3.100.00 Iin;_lIboveltcm._, ) lloa. Tl1Ie_ CO FJISI' AmcriclP TitJc winDcC CODJUy IIii (1ilcIudu lbave hcm 1UIIbm: 1109, !.ndef. -I:< (~"'" 11I0, Ow""a e_ (Pronillrn~ $6.soo.ooo.oo ($1 B.45O.00) 1111. e..r""", Ill:!. ~""" '" Lewis. LonB/l1lll" W.k.P,/\. 50,00 50,00 1113, C.... Fees 10 Lewis, 1.GopI." WlIlI<cr, P",. SO.OO 1201. -....... Deed S1.9.9O ~al RcJe.ues S19,9O 39.80 1202. ~y-- Peed MonpIO(') 1202. S1Ilc..~ Peed S4$.SOO.oo Mon,p..(s) 45,500.00 1:!04. A._..,....~ .. ClettoflhoC..., ZII.40 11O3, SoIilIoctlOllorU_Monp", ; .. CIat.r....c..... 10,00 IJOI. Suney 10 01lrie.. 5..... '" 0'8ric0 304,50 1102- "'1IIi<Jpo1u".S_ ,. CUy.r Boy1llOn Beao:h 45.00 1103, :lOOO RaI EsloI. T.... 'Pm:ell .. ,.""" IIcocII Couory Tn C.oUcc'Dr 19,)38.65 1304, :lOOORaI.1!sIale 'r...., Pm:e12 I. PIIlmBerchC....'yTaxC.ollcc"" /J,S83.53 IJOS. :!006 RcaII3tolc T....' Pm:e13 to Palm Beach C....y Tox CCIIIcaor 24.572-97 1306, 2007 Real EsIaIc T....' Pm:ell 10 Palm_COllII1yTaxc.u.- 7,096,6S IJ07, 2007 Real EsIaIc T....' Pm:e12 .. Palm Beach C-Ouoly Tax CoUcc.or 5.331,93 1l01. 2007 RcoI EsIaIc T.... , Pm:el 3 to Palm Beach COval)' Till. CoUcclor 9,017,92 11O9, AdlIi-._ (See _d Addcod..... 1.464.121,33 1_...... 103. Seed.nJ aod m, _n I( ) 23.319.$0 I ,ss9.132.1 B I have carefuIy reviewed Ihe HUD-1 Settlement Statement and. 10 the beSI of my knowktdge and betlel. h is a true and accurate slatemenl ot all receipts and disbu'semenls made on my lHlCOtJnt or by me In this Irlnsoction. Ilurther canllv tha.1 have received a copy oIlIle Hue. 1 Sehlement Statement 8""..... Beach C_ry R............. A..."". 1031 e..haoge COIpOrabon as Qualified ""ermediary for Oct, C ',~gUf = ..,.~,-,.," _ C .s... A. , ':\V.:l- The HUD-1 Seluernenl Slatemenl which I haYe ~ed is a tru8i1M accurale account of 'his lransacdon I have ca\lSed. 01 will cause, the funds 10 be dllbulMd in aOCOrdance -l11Issra_, uwiii.l.Gaamun & Wolker. P,A. 8y; As lIS Aulbariud Representative Dale W AANING: Hiss crime 10 knowingly mske false slalel1llmls to the Unifed Slates on this or eny nit.., oimilaT 101m. PenaIN.. upon convJcUon can inclUde I Itne 8lld Impri.......nt. For dolan. leo: Tiue 18 U.S. Code Secllon mIll and S8<IIon !{I10. n_..~._~__~ FILE NUMBER: NAME OF BORROWER: AddIMS ot Borrower: NAME OF SELLEA: Addres. 0' Seller: NAME OF LENDER: Add...sot ~r: PROPERTY LOCAnON: SETTLEMENT AGENT: Place ot SeuJemenl: smt.EMENT DATE: ~ Pescrlol/on ~5 Rt:ld Esotle Taxes I Patte,] s-.ftt AIlOl'aC)'I' A:eJ. es...... AIIomeYI'F;::Q HUD-! SETTLEMENT STATEMENT ADDENDUM 07.0023 Boynton Beach CommuDil)l Redcvelopmenl ^gODey. a pubUe aseDey crcal<d pwsuanllO Oulpler 163. Part D1. of Florida SlIlUr.. 915 Sou'" FecIcIoI HiBhway. Boynloll Beach. Florida 33435 1031 E..baoge OJrpor.ilioa as Qualified Intennediary ror Boymon Associa,cs,I.Jd" a Florida limited PlUtDetShip 114 Nonb Federal Highway. Sulle 202. Boynlon Be.eb. Florida 33435 800 North Seacrcst Boulevard. Boya,oo Bench, Florida 33435. 700 Nonb Sencres, Boulevard, Boynton Beneb, Lewis, Longman &. Walker. P.A, 1100 Palm Beach lAJccs Blvd.. Sui'e 1000, We" Pabn Beach, Florida 33401 0S/171117 DISBURSEMENT DAn: 05/17107 /temJatIon of Additional HUD Line ltema fmll Borrower POC Seller POC Borrower Seller PaJm Bc4eh ('ou.lII)' Tal ColJec:(or 60601.83 1031 E.c"""r< CO<pQralioo 100.00 LAw Ofticc of J&e:t O. OweD. 1r., P..... 4062..50 Gary Krasna,l!sq, 1450000,00 Brody" Brady. P,A. 4000,00 TOlal HUD Line 1309 Expense, 0.00 0,00 0.00 , .464.827.33 RECEIVED. REVIEWED AND APPROVED: Boynton Associales. LId, by its Oeneral Parlner. Affordable Housing. LLC By: Larry Finke/slein. its Managing Member THIS TRANSACJ'ION IS INTENDED TO BE 1REATED AS A LIKE-KIND EXCHANGE IN ACCORDANCE WITH SECTION 1031 OF THE INTERNAL REVENUE CODE, This addendum is attached to a HUD-1 Settlement Statement executed by the aforementioned parties and Is attached to said HUD Statement for \he pWpoBe of itemizing expenses reflected on line 1309 of page 2 thereof, BOllOwel s Inltlal!a): ~VJ I I SeUe(s Inlll8J(s): PURCHASE AGREEMENT This Purchase Agreement (hereinafter "Agreement") is made and entered into as of the Effective Date (hereinafter defined), by and between BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY, a public agency created pursuant to Chapter 163, Part III, of the Florida Statutes (hereinafter "CRA" or "PURCHASER") and BOYNTON ASSOCIATES, L TD, a Florida Limited Partnership, (hereinafter "SELLER"). In consideration ofthe mutual covenants and agreements herein' set forth, the Parties herc:to agree as follows: 1. PURCHASE AND SALE/PROPERTY. SELLER agrees to sell and convey to CRA and CRA agrees to purchase and acquire from SELLER, on the terms and conditions hereinafter set forth, the Property located in Palm Beach COlmty, Florida (the "Property") and more particularly described as follows: See Exhibit "A" 2. PURCHASE PRICE AND PAYMENT, The Purchase Price to be paid for the Property shall be Six Million Five Hundred Thousand Dollars ($6,500,000.00), payable in cash, by wire transfer of United States Dollars at the Closing. Also at the time of Closing, PURCHASER shall pay an additional Five-Hundred Thousand Dollars ($500,000.00) to SELLER in exchange for an assigrunent of all of SELLER'S rights, title, and interest, if any, in and to all Palm Beach County Impact Fee credits applicable to the Property. 3. DEPOSIT. PURCHASER shall pay the sum of Six Hundred and Fifty Thousand Dollars ($650,000.00) as the deposit required lmder this Agreement ("Deposit") three (3) business days following the Effective Date of this Agreement. 3.1 Application/Disbursement of Deposit. The Deposit shall be applied and disbursed as follows: The Deposit shall be delivered to SELLER at Closing and the PURCHASER shall receive credit for such amount against the Purchase Price. If this Agreement is terminated during the Feasibility Period (hereinafter defined) for any reason, the Deposit shall be immediately refunded to the PURCHASER. If this Agreement is terminated due to a default, pursuant to Section 12, the Deposit shall be delivered to (or retained by, as applicable) the non-defaulting Party, and the non-defaulting Party shall have such additional rights, if any, as are provided in Section 12. 3.2 Escrow Agent. Buyer and Seller agree that the Deposit shall be paid to Lewis, Longman & Walker, P.A. ("Escrow Agent") who shall be instructed to invest the Deposit in an interest-bearing money market account with an insured banking or savings and loan institution doing business in the State of Florida. The interest earned on the Deposit shall be paid to the party who is entitled to the Deposit under the terms of this Contract, and shall not be applied as a reduction to the Purchase Price. Interest earned on the Deposit shall be rep0l1ed PURCHASE AGREEMENT Page 2 of16 under the federal tax identification number for the party receiving the Deposit. Buyer and Seller agree to execute and deliver such tax reporting forms as may be reasonably required by Escrow Agent to establish such account and to report the interest. PURCHASER and SELLER authorize Escrow Agent (as defined above) to receive, deposit and hold funds in escrow and, subject to clearance, disburse them upon proper authorization and in accordance with Florida law and the term$ of this Agreement. The parties agree that Escrow Agent will not be liable to any person for misdelivery of escrowed items to PURCHASER and SELLER, unless the misdelivery is due to Escrow Agent's willful breach of this Agreement or gross negligence. If Escrow Agent interpleads the subject matter of the escrow, Escrow Agent will pay the filing fees and costs from the deposit and will recover reasonable attorney's fees and costs to be paid from the escrowed funds which are charged and awarded as court costs in favor of the prevailing party. All claims against Escrow Agent will be arbitrated, so long as Escrow Agent consents to arbitrate. 4. TIME FOR ACCEPTANCE OF OFFER AND COUNTEROFFERS: EFFECTIVE DATE. If this Agreement is not executed by and delivered to all parties the day after PURCHASER'S March 2007 Board meeting (which is now scheduled for March 13,2007), the Deposit will, at PURCHASER'S option, be returned and this offer shall be deemed withdrawn. Unless otherwise stated, the time for acceptance of any cOlUlteroffers shall be five (5) days from the date the counteroffer is delivered. The date of this Agreement (the "Effective Date") shall be the date when the last one of the CRA and SELLER has signed or initialed this offer or the final counteroffer. 5. CLOSING. The purchase and sale transaction contemplated herein shall close on or before April 15, 2007, unless extended or shortened by other provisions of this Agreement or by written agreement, signed by both parties. 6. TITLE TO BE CONVEYED. At Closing, SELLER shall convey to CRA, by Warranty Deed complying with the requirements of the Title Commitment (hereinafter defined), valid, good, marketable and insurable title in fee simple to the Property, free and clear of any and all liens, encumbrances, conditions, easements, assessments, restrictions and other conditions except only the following (collectively, the "Permitted Exceptions" attached hereto as Exhibit B): (a) general real estate taxes and special assessments for the year of Closing and subsequent years not yet due and payable; (b) covenants, conditions, easements, dedications, rights-of-way and matters of record included on the Title Commitment or shown on the Survey (defined in Section 7), to which CRA fails to object, or which CRA agrees to accept, pursuant to Section 7.2 and Section 7.3 hereof. 7. INVESTIGATION OF THE PROPERTY. Within thi11y (30) days from the Effective Date of this Agreement ("Feasibility Period"), CRA, and CRA's agents, employees, designees, Contractors, surveyors, engineers, architects, attorneys and other consultants (collectively, "Agents"), shall have the right, at CRA's expense, to make inquiries of, and meet with members of Governmental Authorities regarding the Property and to enter upon the Property, at any timerand from time to time with reasonable notice to SELLER and so long as r 2 PURCHASE AGREEMENT Page 3 of 16 said investigations do not result in a business interruption, to perform any and all physical tests, inspections, and investigations of the Property, including but not limited to Phase I and Phase II investigations, which CRA may deem necessary. The CRA may enter the Property as of the Effective Date to conduct these investigations. During this Feasibility Period, CRA may elect, in CRA's sole and absolute discretion, to terminate this contract and receive back all Deposits hereunder. If CRA elects to terminate this Agreement in accordance with this Section, CRA shall: (i) leave the Property in substantially the condition existipg on the Effective Date, subject to such disturbance as was reasonably necessary or convenient in the testing and investigation of the Property; (ii) to the extent practicable, shall repair and restore any damage caused to the Property by CRA's testing and investigation; and (iii) release to SELLER, at no cost, all reports and other work generated as a result of the CRA' s testing and investigation. CRA hereby agrees to indemnify and hold SELLER harmless from and against all claims, losses, expenses, demands and liabilities, including, but not limited to, attorney's fees, for nonpayment for services rendered to CRA (including, without limitation, any construction liens resulting therefrom) or for damage to persons or property (subject to the limitation on practicability provided above) arising out of CRA's investigation of the Property. CRA's obligations under this Section shall survive the termination, expiration or Closing of this Agreement. However, CRA's indemnification obligations shall not exceed the statutory limits as described within Section 768.28, Florida Statutes, and CRA does not waive its sovereign immunity rights. SELLER hereby agrees to indemnify and hold CRA harmless from and against all claims, losses, expenses, demands and liabilities, including, but not limited to, attomey's fees, for nonpayment for services rendered to SELLER or for damage to persons or property (subject to the limitation on practicability provided above) arising out of CRA' s investigation of the Property, if such damage to persons or property results from services rendered at SELLER'S request. The obligations of the parties under this Section shall survive the termination, expiration or Closing 9fthis Agreement. 7.1 Seller's Documents. CRA acknowledges that SELLER has delivered to CRA the following documents: copies of any repOlis or studies (including environmental, engineering, surveys, soil borings and other physical repolis) in SELLER'S possession or control with respect to the physical condition of the Property, if any. 7.2 Title Review. During the Feasibility Period, CRA shall obtain, at the CRA's expense, from the Title Company chosen by CRA (hereinafter "Title Company"), a Title Commitment covering the Property and proposing to insure CRA in the amount of the Purchase Price subject only to the Permitted Exceptions shown in Exhibit B, together with complete and legible copies of all instruments identified as conditions or exceptions in Schedule B of the Title Commitment. CRA shall examine the Title Commitment and deliver written notice to SELLER no later than twenty (20) days after the Effective Date notifying SELLER of any objections CRA has to the condition of title (hereinafter "CRA Title Objections"). If CRA fails to deliver the CRA Title Objections to SELLER within the aforesaid review period, title shall be deemed accepted subject to the conditions set forth in the Title Commitment. If CRA timely delivers the CRA Title Objections, then SELLER shall have thirty (30) days to diligently and in good faith undertake all necessary activities to cure and remove the CRA Title Objections (hereinafter "Cure Period"). In the event that SELLER is unable to cure and remove, or cause to be cured and removed, the CRJ\. Title Objections within the Cure Period, to the satisfaction of CRA, then 3 PURCHASE AGREEMENT Page 4 of 16 CRA, in CRA's sole and absolute discretion, shall have the option of (i) extending the Cure Period and the Closing for one additional thirty (30) day period, or (ii) accepting the Title to the Propel1y as of the time of Closing or (iii) canceling and terminating this Agreement, in which case, the Deposit shall be returned to CRA and the Parties shall have no further obligations or liability hereunder, except for those expressly provided herein to survive termination of this Agreement. Prior to the Closing, CRA shall have the right to cause the Title Company to issue an updated Title Commitment ("Title Update") covering the Property. If any Title Update contains any conditions which did not appear in the Title Commitment, and such items render title unmarketable, CRA shall have the right to object to such new or different conditions in writing prior to Closing. All rights and objections of the Parties with respect to objections arising from the Title Update shall be the same as objections to items appearing in the Title Commitment, subject to the provisions of this Section. 7.3. Survev Review. CRA, at CRA's expense, may obtain a cunent boundary survey (the "Survey") of the Property, indicating the number of acres comprising the Property to the nearest 1I100th of an acre. With the exception of matters shown in Exhibit B, if the Survey discloses encroachments on the Property or that improvements located thereon encroach on setback lines, easements, lands of others or violate any restrictions, covenants of this Agreement, or applicable governmental regulations, the same shall constitute a title defect and shall be governed by the provisions of Section 7.2 conceming title objections. 8. CONDITIONS TO CLOSING. CRA shall not be obligated to close on the purchase of the Property unless each of the following conditions (coll~ctively, the "Conditions to Closing") are either fulfilled or waived by CRA in writing: 8.1. Representations and WalTanties, All of the representations and warranties of SELLER contained in this Agreement shall be true and con"ect as of Closing. 8.2. Condition of Property. The physical condition of the Property shall be the same on the date of Closing as on the Effective Date, reasonable wear and tear excepted. 8.3. Pending Proceedings. At Closing, there shall be no litigation or administrative agency or other governmental proceeding of any kind whatsoever, pending or threatened, which has not been disclosed, prior to closing, and accepted by CRA. 8.4. Compliance with Laws and Regulations. The Property shall be in compliance with all applicable federal, state and local laws, ordinances, rules, regulations, codes, requirements, licenses, permits and authorizations as of the date of Closing. 9. CLOSING DOCUMENTS. The CRA shall prepare, or cause to be prepared, the Closing Documents set forth in this Section, except for documents prepared by the Title Company. At Closing, SELLER shall execute and deliver, or cause to be executed and delivered, to CRA the following documents and instruments: r 4 PURCHASE AGREEMENT Page 5 of 16 9.1. Deed. A Wan-anty Deed (the "Deed") conveying to CRA valid, good, marketable and insurable fee simple title to the Property free and clear of all liens, encumbrances and other conditions of title other than the Permitted Exceptions. 9.2 Seller's Affidavits. SELLER shall furnish to CRA an owner's affidavit attesting that, to the best of its knowledge, no individual or entity has any claim against the Property under the applicable construction lien law; and that there are no parties in posse;ssion of the Property other than SELLER. SELLER shall also furnish to CRA a non-foreign affidavit with respect to the Property. In the event SELLER is unable to deliver its affidavits referenced above, the same shall be deemed an uncured title objection. 9.3. Closing Statement. A closing statement setting forth the Purchase Price, the Deposit, all credits, adjustments and prorations between CRA and SELLER, all costs and expenses to be paid at Closing, and the net proceeds due SELLER, which CRA shall also execute and deliver at Closing. 9.4. Conective Documents. Documentation required to clear title to the Property of all liens, encumbrances and exceptions, if any, other than Permitted Exceptions. 9.5. Additional Documents. Such other documents as CRA or the Title Company may reasonably request that SELLER execute and deliver, and any other documents required by this Agreement or reasonably necessary in order to close this transaction and effectuate the terms of this Agreement. 10. PRORA nONS, CLOSING COSTS AND CLOSING PROCEDURES. 10.1. Prorations. Taxes, assessments, rents, interest, insurance and other expenses of the Property shall be prorated through the day before Closing. CRA shall have the option of taking over existing policies of insurance, if assumable, in which event premiums shall be prorated. Cash at Closing shall be increased or decreased as may be required by prorations to be made through the day prior to Closing. Advance rent and security deposits, if any, will be credited to CRA. Taxes shall be prorated based upon the cunent year's tax with due allowance made for maximum allowable discount. If Closing occurs at a date when the current year's millage is not fixed and current year's assessment is available, taxes will be prorated based upon such assessment and prior year's millage. If current year's assessment is not available, then taxes will be prorated on prior year's tax. A tax proration based on an estimate shall, at request of either party, be readjusted upon receipt of tax bill. 10.2. Special Assessment Liens. Certified, confirmed and ratified special assessment liens imposed by public bodies as of Closing are to be paid by SELLER. Pending liens as of Closing shall be assumed by CRA. If the improvement has been substantially completed as of the Effective Date, any pending lien shall be considered certified, confirmed or ratified and SELLER shall, at Closing, be charged an amount equal to the last estimate or assessment for the improvement by the public body. r 5 PURCHASE AGREEMENT Page 6 of 16 10.3. Closing Costs. Seller shall pay for all documentary stamps on the deed, recording the deed, and half of all general closing expenses (settlement fee, courier fees, overnight packages, etc.). All other costs of closing shall be borne by CRA. 10.4 Closing Procedure. CRA shall ftmd the Purchase Price subject to the credits, offsets and prorations set forth herein. SELLER and CRA (as applicable) shall execute and deliver to Closing Agent the Closing Documents. The Crosing Agent shall, at CI~sing: (i) disburse the sale proceeds to SELLER; (ii) deliver the Closing Docwnents and a "marked-up" Title Commitment to CRA, and promptly thereafter, record the Deed and other recordable Closing Documents in the appropriate public records. 10.5 Existing Mortgages and Other Liens. At Closing, SELLER shall obtain, or cause to be obtained, satisfaction or release of record of all mortgages, liens and judgments applicable to and encumbering the Property, except any liens accepted and included in Exhibit B. 11. REPRESENTATIONS. COVENANTS AND WARRANTIES. 11.1 Seller's Representations and Warranties. SELLER hereby represents, covenants and warrants to CRA, as of the Effective Date and as of the Closing Date, as follows: 11.2. Authority. The execution and delivery of this Agreement by SELLER and the consummation by SELLER of the transaction contemplated by this Agreement are within SELLER'S capacity and all requisite action has been taken to make this Agreement valid and binding on SELLER in accordance with its telIDS, The person executing this Agreement on behalf of SELLER has been duly authorized to act on behalf of and to bind SELLER, and this Agreement represents a valid and binding obligation of SELLER. 11.3. Title. SELLER is and will be on the Closing Date, the owner of valid, good, marketable and insurable fee simple title to the Property, free and clear of all liens, encumbrances and restrictions of any kind, except the Pemlitted Exceptions (and encumbrances of record which will be discharged at Closing). 12. DEFAULT. 12.1. Purchaser's Default. In the event that this transaction fails to close due to a wrongful refusal to close or default on the pali of CRA, subject to the provisions of Paragraph 12.3 below, the Deposit actually then being held by the Escrow Agent shall be paid by Escrow Agent to SELLER as agreed liquidated damages and, thereafter, neither CRA nor SELLER shall have any further obligation or liabilities under this Agreement, except for those expressly provided to survive the termination of this Agreement; provided, however, that CRA shall also be responsible for the removal of any liens asserted against the Property by persons claiming by, through or under CRA, but not otherwise. CRA and SELLER acknowledge that if eRA defaults, SELLER will suffer damages in all amount which cannot be ascertained with reasonable certainty on the Effective Date and that the amount of the Deposit being held by Escrow Agent 6 PURCHASE AGREEMENT Page 7 of 16 most closely approximates the amount necessary to compensate SELLER. CRA and SELLER agree that this is a bona fide liquidated damages provision and not a penalty or forfeiture provision. 12.2. Seller's Default. In the event that SELLER shall fail to fully and timely perform any of its obligations or covenants hereunder or if any of SELLER'S representations are untrue or inaccurate, then, notwithstanding anything to the contrary contained in this Agreement, CRA may, at its option: (1) declare SELLER'S in default under this Agreement by notice delivered to SELLER, in which event CRA may tenninate this Agreement and demand that the Deposit be returned, including all interest thereon if any, in accordance with Section 3 and neither Party shall have any further rights hereunder or (2) seek specific performance of this Agreement, without waiving any action for damages. 12.3. Notice of Default. Prior to declaring a default and exercising the remedies described herein, the non-defaulting Party shall issue a notice of default to the defaulting Party describing the event or condition of default in sufficient detail to enable a reasonable person to determine the action necessary to cure the default. The defaulting Party shall have fifteen (15) days from delivery of the notice during which to cure the default, provided, however, that as to a failure to close, the cure period shall only be tlU'ee (3) Business Days fi'om the delivery of notice. Both parties agree that if an extension is requested, such extension shall not be unreasonably withheld. If the default has not been cured within the aforesaid period, the non-defaulting Party may exercise the remedies described above. 12.4. Survival. The provisions of this Section 12 shall survive the termination of this Agreement. 13. NOTICES. All notices required in this Agreement must be in writing and shall be considered delivered when received by certified mail, return receipt requested, or personal delivery to the following addresses: If to Seller: Boynton Associates, Ltd. Attn: Mr. Larry Finkelstein 114 N. Federal Highway, Suite 202 Boynton Beach, Florida 33435 Tel: 561-736-9790 Fax: 561-423-2432 Email: Ifgi@ao1.com With a copy to: William E. Shannon, Esq. 4500 PGA Boulevard, Suite 304B Palm Beach Gardens, Florida 33418 Tel: 561-622-4521 Fax: 561-656-0917 Email: wshannon@owen-Iawfirm.com 7 PURCHASE AGREEMENT Page 8 of 16 If to Purchaser: Boynton Beach Community Redevelopment Agency 915 S. Federal Highway Boynton Beach, Florida 33435 Tel: 561-737-3256 Fax: 561-737-3258 Email: BrightL@ci.boynton-beach.fl.us With a copy to: Kenneth G. Spillias, Esq. Lewis, Longman & Walker, P.A. 1700 Palm Beach Lakes Boulevard, Suite 1000 West Palm Beach, Florida 33401 Tel: 561-640-0820 Fax: 561-640-8202 Email: kspillias@llw-Iaw.com 14. BINDING OBLIGATION/ASSIGNMENT. The terms and conditions of this Agreement are hereby made binding on, and shall inure to the benefit of, the successors and permitted assigns of the Parties hereto. SELLER may not assign its interest in this Agreement without the prior written consent of CRA, which shall not be unreasonably withheld. CRA shall have the right to assign this Agreement to the City of Boynton Beach (the "City") without the prior consent of SELLER and the CRA shall be released from any further obligations and liabilities under this Agreement. The CRA may not assign this Agreement to any other party without the prior written approval of SELLER, which shall not unreasonably withheld. If CRA has been dissolved as an entity while this Agreement and/or the attached Lease Agreement are in effect, the provisions of section 163.357(1), Florida Stahltes, (as it may be amended from time to time), shall apply. 15. RISK OF LOSS. In the event the condition of the Property, or any part thereof, is materially altered by an act of God or other natural force beyond the control of SELLER, CRA may elect, as its sole option, to terminate this Agreement and the parties shall have no ftu1her obligations under this agreement and all Deposits hereunder shall be refunded to CRA, or CRA may accept the Property without any reduction in the value of the Property. 16. BROKER FEES. The Parties hereby confirm that neither of them has dealt with any broker in connection with the transaction contemplated by this Agreement. Each Party shall indemnify, defend and hold harmless the other Party from and against any and all claims, losses, damages, costs or expenses (including, without limitation, attorney's fees) of any kind or character arising out of or resulting from any agreement, arrangement or understanding alleged to have been made by either Party or on its behalf with any broker or finder in connection with this Agreement. The provisions of this Section shall survive Closing or termination of this Agreement. 8 PURCHASE AGREEMENT Page 9 of 16 17. Environmental Conditions. 17. I. For purposes of this Agreement, pollutant ("Pollutant") shall mean any hazardous or toxic substance, material, or waste of any kind or any contanlinant, pollutant, petroleum, petroleum product or petroleum by-product as defin'ed or regulated by environmental laws. Disposal ("Disposal ") shall mean the release, storage, use, handling, discharge, or disposal of such Pollutants. Environmental laws ("Environmental Laws") shall mean any applicable federal, state, or local laws, statutes, ordinances, rules, regulations or other governmental restrictions. 17.1.1 As a material inducement to CRA entering into this Agreement, SELLER hereby warrants and represents the following, as applicable: (1) That SELLER and occupants of the Property have obtained and are in full compliance with any and all permits regarding the Disposal of Pollutants on the Property or contiguous property owned by SELLER, to the best of SELLER' knowledge. (2) SELLER is not aware nor does it have any notice of any past, present or future events, conditions, activities or practices which may give rise to any liability or fonn a basis for any claim, demand, cost or action relating to the Disposal of any Pollutant on the Property. SELLER is not aware nor does it have any notice of any past, present or future events, conditions, activities or practices on contiguous property that is owned by SELLER which may give rise to any liability or form a basis for any claim, demand, cost or action relating to the Disposal of any Pollutant affecting the SELLER property. (3) There is no civil, criminal or administrative action, suit, claim, demand, investigation or notice of violation pending or, to the best of that entity's knowledge, threatened against SELLER or the Property relating in any way to the Disposal of Pollutants on the Property, any portion thereof, or on any contiguous property owned by SELLER. 17.2 Additional Warranties and Representations of SELLER. As a material inducement to eRA entering into this Agreement, SELLER, to the best of SELLER' information and belief, hereby represents and warrants the following: 17.2. I There are no pending applications, ,permits, petitions, contracts, approvals, or other proceedings with any governmental or quasi-governmental authority, including but not limited to, CRA, municipalities, cotmties, districts, utilities, and/or federal or state agencies, concerning the use or operation of, or title to the Property or any portion thereof and SELLER has not granted or is not obligated to grant any interest in the Property to any of the foregoing entities. 17.2.2 There are no facts believed by SELLER to be material to the use, condition and operation of the Propeliy in the manner that it has been used or operated, which it has not disclosed to eRA herein, including but not limited to unrecorded instruments or defects in the condition of the Property which will impair the use or operation of the Property in any manner. . 9 PURCHASE AGREEMENT Page 10 of 16 17.2.3 To the best of SELLER' knowledge, the Property and the use and operation thereof are in compliance with all applicable county and governmental laws, ordinances, regulations, licenses, pennits and authorizations, including, without limitation, applicable zoning and environmental laws and regulations. 17.3 SELLER Deliveries. SELLER shall deliver to CRA the following documents and instruments within ten (I 0) days of the Effective Date of this Agreement, except as specifically indicated: ' 17.3.1 Copies of any reports or studies (including engineering, environmental, soil borings, and other physical inspection reports), in SELLER'S possession or control (other than the documents described as having been received in Paragraph 7.1 above) with respect to the physical condition or operation of the Property, if any. 17.3.2 Copies of all approved plans, licenses, variances, waivers, permits (including but not limited to all surface water management permits, wetland resource permits, consumptive use permits and environmental resource permits), authorizations, and approvals required by law or by any governmental or private authority having jurisdiction over the Property, or any portion thereof (the "Govelnmental Approvals"), which are material to the use or operation of the Property, if any. 17.3.3 At Closing, SELLER shall execute and deliver to CRA any and all documents and instruments required by CRA, in CRA's sole and absolute discretion, which: (i) effectuate the transfer to CRA of those Governmental Approvals, or portions thereof which are applicable to the Property, that CRA desires to have assigned to it, and/or (ii) cause the Property to be withdrawn fi'om any Governmental Approvals. No later than thirty (30) days prior to the Closing Date, SELLER shall remedy, restore, and rectify any and all violations of the Governmental Approvals (including but not limited to any and all p01iions of the surface water management system, mitigation areas or other items which do not comply with the Governmental Approvals or applicable rules), if any. SELLER warrants that there will not be, at the time of Closing, any unrecorded instruments affecting the title to the Property, including, but not limited to any conveyances, easements, licenses or leases. 18. MISCELLANEOUS. 18.1. General. This Agreement, and any amendment hereto, may be executed in any lltunber of c0U11terparts, each of which shall be deemed to be an original and all of which shall, together, constitute one and the same instrument. The section and paragraph headings herein contained are for the purposes of identification only and shall not be considered in construing this Agreement. Reference to a Section shall be deemed to be a reference to the entire Section, unless otherwise specified. No modification or amendment of this Agreement shall be of any force or effect unless in writing executed by Parties, This Agreement sets forth the entire agreement between the Parties rela,ting to the Property and all subject matter herein and supersedes all prior apd contemporaneous negotiations, understandings and agreements, written or oral, between the Parties. This Agreement shall be interpreted in accordance with the laws of r 10 PURCHASE AGREEMENT Page 11 of 16 the State of Florida. The Parties hereby agree that jurisdiction of any litigation brought arising out of this Agreement shall be in the Fifteenth Judicial Circuit in and for Palm Beach County, Florida, or, should any cause of action be limited to federal jurisdiction only, in the United States District Court for the Southern District Court of Florida. 18.2. Computation of Time. Time is of the essence. Any reference herein to time periods which are not measured in Business Days and whi~h are less than six (6) days, shall exclude Saturdays, Sundays and legal holidays in the computation thereof. Any tim~ peliod provided for in this Agreement which ends on a Saturday, Sunday or legal holiday shall extend to 5:00 p.m. on the next full Business Day. Time is of the essence in the performance of all obligations under this Agreement. Time periods commencing with the Effective Date shall not include the Effective Date in the calculation thereof. 18.3. Waiver. Neither the failure of a party to insist upon a strict performance of any of the terms, provisions, covenants, agreements and conditions hereof, nor the acceptance of any item by a party with knowledge of a breach of this Agreement by the other party in the performance of their respective obligations hereunder, shall be deemed a waiver of any rights or remedies that a party may have or a waiver of any subsequent breach or default in any of such terms, provisions, covenants, agreements or conditions. This paragraph shall survive termination of this Agreement and the Closing. 18.4. Construction of AlZreement. The Parties to this Agreement, through counsel, have participated freely in the negotiation and preparation hereof. Neither this Agreement nor any amendment hereto shall be more strictly construed against any of the Parties. As used in this Agreement, or any amendment hereto, the masculine .shall include the feminine, the singular shall include the plural, and the plural shall include the singular, as the context may require. Provisions of this Agreement that expressly provide that they survive the Closing shall not merge into the Deed. 18.5. Severability. If any provision of this Agreement or the application thereof shall, for any reason and to any extent, be invalid or unenforceable, neither the remainder of this Agreement nor the application of the provision to other persons, entities or circumstances shall be affected thereby, but instead shall be enforced to the maximum extent permitted by law. The provisions of this Section shall apply to any amendment of this Agreement. 18.6 Handwritten Provisions. Handwritten provisions inserted in this Agreement and initialed by CRA and SELLER shall control all printed provisions in conflict therewith. 18.7 Waiver of Jury Tlial. As an inducement to eRA agreeing to enter into this Agreement, CRA and SELLER hereby waive trial by jury in any action or proceeding brought by either party against the other party pertaining to any matter whatsoever arising out of or in any way connected with this Agreement. 11 PURCHASE AGREEMENT Page 12 of 16 18.8. Attorneys Fees and Costs. Should it be necessary to bring an action to enforce any of the provisions of this Agreement, reasonable attorneys' fees and costs, including those at the appellate level, shall be awarded to the prevailing party. 18.9 Binding Authority. Each pat1y hereby represents and warrants to the other that each person executing this Agreement on behalf of the CRA and SELLER has full right atld lawful authority to execute this Agreement and to bind and obligate the party for whom or on whose behalfhe or she is signing with respect to all provisions contained in this Agreem~nt. 18.10 Recording. This Agreement may not be recorded in the Public Records of Palm Beach County, Florida. 18.11 Survival. The covenants, warranties, representations, indemnities and tmdertakings of SELLER set forth in this Agreement, shall survive the Closing, the delivery and recording of the SELLER Property Deed and CRA's possession of the Property. 18.12 SELLER Attorneys' Fees and Costs. SELLER acknowledges and agrees that SELLER shall be responsible for its own attorneys' fees atld all costs, if any, incuned by SELLER in connection with the transaction contemplated by this Agreement. 18.13. Disclosure. SELLER'S General Partner's Manager, LalTY Finkelstein (the executor of this Agreement), discloses that he is a licensed Florida real estate broker, and that he has a beneficial interest in SELLER. 18.14 Tax Free Exchange. SELLER, at its sole discretion, may elect to exchange the Property (or a portion thereof) for other properties ("Ex.change Prope11y") of their choosing in a three party transaction, provided that the end result is that PURCHASER acquires fee title to the Property without incuning any additional expense or liability of any nature. If Seller so elects, the designation of Exchange Property shall be made in writing by SELLER prior to the Closing date. The contract to complete the exchange ("Exchange Contract"), or an assignment thereof to PURCHASER, shall be presented to PURCHASER conculTently with the designation of the Exchange Property. PURCHASER shall have no obligation or responsibility of the Exchange Property or for determining that the contemplated transaction will qualify as a "like kind exchange" under Section 1031 of the Internal Revenue Code as amended. PURCHASER agrees to fully cooperate Witll SELLER in connection with the acquisition of the Exchange Property and the consummation of the exchange. {THE REMAINDER OF THIS PAGE INTENIONALL Y LEFT BLANK} 12 PURCHASE AGREEMENT Page 13 of 16 date. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective BUYER: SELLER: BOYNTON BEACH COMMUNITY REDEVELOPMENT AGE~ By:, _ Henderson Tillman, Chairperson BOYNTON ASSOCIATES, LTD., by its GENERAL. ARTNER, AFFORDABLE OUSING, LLC. ~-~ By: ~ Print Name: Date: s -1";-0'7 Date: ~ - 11. - D .., Witnesses/~ ~ tt l.o~~ '-r:~~~ Print Name WR:iJ:1~ 1206~i( ~ \~ \2e,u-Ao V\ Print Name Witnesses:/i 'u ,/ / ~.,/ CeYl:J'1A~ \J t \j \a VI ~ "1ro t5 Print Name f Witnesses: ,/1 1/ ~1)/(j 6!; \J \ \} YlV\ lS 'rf> 0 ~7 Print Name 13 PURCHASE AGREEMENT Page 14 of 16 EXHIBIT A LEGAL DESCRIPTION OF PROPERTY Parcell: A portion of Block C of the Plat of Boynton Hills, Boynton Beach, Palm Beach County, Florida, according to the plat thereof as recorded in Plat Book 4, Page 51, of the Public Records of Palm Beach County, Florida, described as follows: Commence at the Northeast comer of Lot 147 of said Block C; thence South (assumed), along the East line of said Lot 147, a distance of20.00 feet to the Point of Beginning; thence continue South, along the East line of said Block C, 228.36 feet to the Southeast comer of Lot 134 of said Block C; thence West, along the South line of said Lot 134, a distance of 100 feet to the East line of Lots 135 and 136 of said Block C; thence South along said East line and the Southerly prolongation thereof, 189.19 feet to the centerline of Grand Circle "N", being a curve concave Southwesterly having a radius of 591.65 feet, (a line radial to said curve bears NOlih 41004' 57" East); thence Northwesterly, along the arc of said curve 5.02 feet through a central angle of 00 29' 11" to the intersection with the Northerly prolongation of the East line of Lot 129 of said Block C, (a line radial to said curve at the said point of intersection bears North 400 35' 46" East); thence South along the said Northerly prolongation of the East line of Lot 129, a distance of 57.60 feet to the Southeast comer of said Lot 129; thence West along the South line of said Lot 129 and the South line of Lot 128, a distance of 150.00 feet to the West line of said Lot 128; thence North, along said West line, 15.00 feet to the South line of Lots 127 and 126 of said Block C; thence West, along the said South line of Lots 127 and 126, a distance of 100.00 feet to the West line of said Lot 126; thence North, along said West line, 45.00 feet to the South line of Lots 124 and 123 of said Block C; thence West along said South line, 100.00 feet to the West line of said Lot 123; thence North along said West line and the Northerly prolongation thereof, 193.23 feet to the intersection with the Westerly prolongation of the South line of Lot 141 of said Block C; thence North 760 46' 35" East, along said Westerly prolongation, 157.99 feet to the West line of said Lot 141; thence North, along said West line, 101.25 feet to the North line of said Lot 141; thence North 830 17' 55" East, along the North line of said Lots 141 and 142 of said Block C, a distance of75.51 feet to a line 25 feet West of and parallel with the East line of Lot 150 of said Block C; thence North, along said paral1elline, 92.44 feet to the North line of Lots 150, 149, 148 and 147 of said Block C; thence Ea')t along said North line, 205.00 feet to the begiIming of a curve concave Southwesterly having a radius of 20,00 feet and a central angle of 900 DO' 00"; thence Southeasterly, along the arc of said curve, 31.42 feet to the Point of Beginning aforedescribed. Parcel 2: Lots 1 through 12, inclusive, Block 1, Palm Beach Country Club Estates, according to the Plat thereof as recorded in Plat Book 11, Page 43, of the Public Records of Palm Beach County, Florida; and the South 1/2 of the East 1/2 of Lot 2, of Subdivision of the West 1/2 of the Southeast 1/4 of Section 21, Township 45 South, Range 43 East, according to the plat thereof, as recorded in Plat Book 1, Page 4, of the Public Records of Palm Beach County, Florida, LESS the South 125 feet, thereof and LESS the right of way for "Seacrest Boulevard" as shown on Road Plat Book 5, Page 182-, of the Public Records of Palm Beach County, Florida. 14 PURCHASE AGREEMENT Page 15 of 16 Exhibit B Permitted Exceptions I. Taxes for the year of closing, and taxes or special assessmehts which are not shown as existing liens by the public records. 2. Rights or claims of parties in possession not shown by the public records. 3. Encroachments, overlaps, boundary line disputes, and any other matter which would be disclosed by an accurate survey and inspection of the premises. 4. Easements or claims of easements not shown by the public records. 5. Any lien, or right to a lien, for services, labor, or material, furnished to the premises imposed by law and not shown on the public records. 6. Any adverse ownership claim by the State of Florida by right of sovereignty to any portion of the lands insured hereunder, including submerged, filled, and artificially exposed lands, and lands accreted to such lands. 7. Resolution No. 05-176 in favor of City of Boynton Beach recorded in Official Records Book 19662, Page 893, as assigned to Boynton Beach Community Redevelopment Agency in Official Records Book 20768, Page 938, both of the Public Records of Palm Beach County, Florida. (Seller to assign whatever rights, title, or interest it has in and to the agreement by the Boynton Beach Community Redevelopment Agency to waive any lien described in this Resolution.) 8. Oil, Gas and Mineral Reservations in favor of the State of Florida, as set forth in Deed from the Tmstees of the Internal Improvement Fund of the State of Florida, recorded in Deed Book 709, Page 546, of the Public Records of Palm Beach County, Florida, as affected by Quit-Claim Deed recorded in Official Records Book 1953, Page 1601. The right of entry for mining and exploration in said reservations has been released in Official Records Book 408 I, Page 1974, of the Public Records of Palm Beach County, Florida and by Section 270. I 1 F.S. Road Reservations have been released in Official Records Book 20739, Page 486, of the Public Records of Palm Beach County, Florida. 9. Oil, Gas and Mineral Reservations in favor of the State of Florida, as set forth in Deed from the Trustees of the Internal Improvement Fund of the State of Florida, recorded in Deed Book 751, Page 209, of the Public Records of Palm Beach County, Florida, The right of entry for mining and exploration in said reservations has been released in Official Records Book 408 I, Page 1974, of the Public Records of Palm Beach County, Florida and by Section 270.1 I F,S. Road Reservations have been released in Official Records Book 20739, Page 486, of the Public Records of Palm Beach County, Florida, 10. Oil, Gas and Mineral Reservations in favor of the State of Florida, as set forth in Deed from the Trustees of the Internal.Improvement Fund of the State of Florida, recorded in Deed Book 822, Page 121, of the Public Records.of Palm Beach County, Florida. The right of entry for mining and exploration in 15 PURCHASE AGREEMENT Page 16 of 16 said reservations has been released in Official Records Book 40Bl, Page 1972, of the Public Records of Palm Beach County, Florida and by Section 270.] 1 F.S. Road Reservations have been released in Official Records Book 20739, Page 486, of the Public Records of Palm Beach County, Florida. 11. Easement to Florida Power and Light Company recorded in Official Records Book 1571, Page 429, of the Public Records of Palm Beach County, Florida. 12. Encroachment of NW 151 Street along the West Property Iil;1e as shown on survey by O'Brien, Suiter & O'Brien, Inc., Order No. BO-153db"I", dated October 20,2005, revised 9/2/05, revised 9114/05, revised 7/1 1106, revised 10/17/06 and 11/13/06. (as to Parcell). 13. Chain link fence encroaches .4' along the East property line and 4.3' along the NOlth property line; Encroachment of concrete drive, rock drive, pavement and concrete walkways on the Western portion of the property; Encroachment of pavement along the side of the property, as shown on survey by O'Brien, Suiter & O'Brien, Inc., Order No. BO-153db" 1 ", dated October 20, 2005, revised 9/2/05, revised 9/14/05, revised 7/11106, revised 10/17/06 and 11113/06, (as to Parcell). 14. Irregular wood fence encroaches .05' along the South property line as shown on survey prepared by O'Brien, Suiter & O'Brien, Inc., Order No. 80-l53db"A", dated October 20,2005, revised 12/01/05, revised 1/05/06, revised 7/13/06, revised 7/1 9/06 and revised 10/17/06. (as to Parcel 2). 16 AN APPRAISAL REVIEW OF A3.44-ACRE PARCEL OF MULTI-FAMILY LAND LOCATED AT THE SOUTHWEST CORNER OF NORTH SEACREST BOULEVARD AND NORTHWEST 81H AVENUE BOYNTON BEACH, FLORIDA 33435 PREPARED FOR MR. ROBERT T. REARDON BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY 915 SOUTH FEDERAL HIGHWAY BOYNTON BEACH, FLORIDA 33435 ASOF NOVEMBER 4, 2006 BY DOUGLAS B. LAWSON, MAl LAWSON V ALUA nON GROUP, INC. . LAWSON VALUATION GROUP, INC. Affiliated with National Valuation Group Corporate Office Real Estate Appraisers and Consultants Palm Beach Gardens, Florida Licensed Real Estate Broker 8895 N. Military Trail, Suite 304E Palm Beach Gardens, FL 33410-6263 Telephone: (561) 622-5533 Fax: (561) 622-0159 Affiliate Offices Austin, Texas Houston, Texas Irvine, California Scottsdale, Arizona November 20, 2006 Mr. Robert T. Reardon, Assistant Director Boynton Beach Community Redevelopment Agency 915 South Federal Highway Boynton Beach, Florida 33435 Re: Appraisal Review 3.44-Acre Parcel SWC North Seacrest Blvd. and NW 8th Avenue Boynton Beach, Florida Dear Mr. Reardon: As requested, we have made an investigation and analysis of the above referenced property. The purpose of this investigation and analysis was to review an appraisal prepared for you by Robert B. Banting and Beau M. Arnold of Anderson and Carr, Inc. as of October 4, 2006. The purpose of their appraisal was to provide an estimate of As Is Market Value of the Fee Simple Estate of the property for possible acquisition by the Boynton Beach Community Redevelopment Agency. The Subject Property consists of a 3.44-acre parcel of multi-family land located at the southwest comer of N:>rth Seacrest Boulevard and NW 8th Avenue. The Land Use Plan currently allows development with a density of 10.8 dwelling units per acre. The site is currently site plan approved for a townhouse development of 37 units. The City is reviewing an amendment which would allow up to 20 units per acre provided the project provides an affordable housing component. The appraisers considered the reasonableness of this increased density in their valuation of the property. The extent of research and analysis performed for the appraisal report reviewed conforms to the reporting requirements set forth under Standards Rule 2-2(a) of the Uniform Standards of Professional Appraisal Practice for a Self-Contained Appraisal Report. Mr. Robert T. Reardon Boynton Beach Community Redevelopment Agency November 20, 2006 Page Two A checklist with our review comments follows this letter. If you have any questions concerning this review, or if Lawson Valuation Group, Inc. can be of further service, please do not hesitate to contact us. This is a desk review completed for Boynton Beach Community Redevelopment Agency. The purpose is to determine compliance with Uniform Standards of Professional Appraisal Practice (USP AP) and the reasonableness of the value estimate. Appraisal Review is defined in USP AP (2006 Edition) as "the act or process of developing and communicating an opinion about the quality of another appraiser's work that was performed as part of an appraisal, appraisal review, or appraisal consulting assignment." This appraisal review is not an appraisal, and the contents of the review report are intended solely for the internal use of Boynton Beach Community Redevelopment Agency. Respectfully Submitted, LA WSON VALUATION GROUP, INC. fi/lL Douglas B. Lawson, MAl State-Cert. Gen. Appr. RZl70 Attachments DBL;kjl (File #6393b) LAWSON V ALUA nON GROUP, INC. File # 6393b Account Name 3.44 acre tract of multi-family land Property Location Southwest comer of North Seacrest Boulevard and NW 8th Avenue, in Boynton Beach Florida. Client/Intended User Boynton Beach Community Redevelopment Agency Intended Use To assist the client in evaluation for possible purchase. Purpose To evaluate compliance with relevant Uniform Standards of Professional Appraisal Practice (USPAP) requirements and reasonableness of value estimate. Scope of Work In preparing this review, Douglas B. Lawson read the reference appraisal report, researched the market for additional information and inspected the property. In the course of the assignment. I also reviewed a separate appraisal prepared by Altair Appraisal Group dated July 4, 2006. The later appraisal was prepared for Mellon United National Bank intended for mortgage financing on the property. In the course of this review, this appraiser has developed an opinion of value about the Subiect Property under review as of the effecti\e date of appraisal. The information in the work under review that is credible and in compliance has been extended to my value opinion. There are no extraordinary assumptions used in the appraisal. Review Appraiser Douglas B. Lawson, MAL Lawson Valuation Group, Inc. Date of Review October 20, 2006 Property Inspected October 16, 2006 Effective Date of Opinion or Conclusion in the Work under review October 4, 2006 Appraiser's NameIFirm Robert B. Banting, MAL SRA and Beau M Arnold, Anderson and Carr, Inc. Type of Appraisal/Report Self-Contained Report Property Type Multi-family Residential Land Interest Appraised Fee Simple Effective Date of Appraisal October 4,2006 4 Value Estimated "As Is" $3.000.000 "Upon Stabilization" "Upon Completion" Not Applicable Not Applicable Other Reviewer's Estimate of Value Cost Approach Not Applicable Sales Comparison Approach $3,000,000 Income Capitalization Approach Not Applicable Final Estimate of Value $3,000,000 Value Following Review IZl Same As Above D Different From Above Report complies with USP AP requirements and generally acceptable appraisal policies YeslZl NoD Report is acceptable, as is IZl Report is unacceptable D Report is acceptable, subject to clarification or additional information D Comments The revie\\ed appraisal complies with Uniform Standards of Professional Appraisal Practice (USPAP) and is based on generally well-supported data. The information in the report is adequate and relevant. The methods of valuation used by the appraisers in the report are lPPropriate and the analyses. opinions. and conclusions are adequate and reasonable. The property's Market Value was based on five (5) recent comparable land sales. The appraisers chose to analyze the data on the basis of price per SqFt of land area. The comparable sales range from $11.13 per SqFt for Sale I to $42.58 per SqFt for Sale 2. The sales have been compared to the appraised property with "qualitative adiustments". being similar. superior or inferior. The value indicated for the Subiect Property is more than $11.13 and less than $21.55 per SqFt. The appraisers concluded near the upper portion of this range at $20.00 per SqFt for a Market Value of $3.000.000. The value appears reasonable and the report is acceptable. Although reasonable. the price per planned or approved unit should also have been analyzed and at least considered. The value equates to $44.118 per potential unit based on the maximum 68 dwelling units that would be allowed under the zoning change and $ 81.081 per unit based on the current approved density of 10.8 units per acre (37 units). These numbers appear at the high end of a reasonable range based on the sales provided and other sales in the market area. 5 General Data Adequate Yes No Legal Description ~ D Purpose of Appraisal ~ D Intended use of Appraisal ~ D Scope of the Appraisal ~ D Property Rights Appraised ~ D Definition of Market Value ~ D Assessed Value/Taxes ~ D Flood Zone Information ~ D Subject History ~ D Exposure/Marketing Periods ~ D Zoning Adequate Identified & Discussed Yes ~ No o Highest and Best Use Adequate Consistent with valuation Yes ~ D ~ Analysis "as if vacant" No o D D Analysis "as Improved" Comments The general Property Data is adequate. The zoning is identified and fully discussed. The highest and Best Use of the property is fully discussed and supported and consistent with the value. 6 Area Description Adequate Yes No Relevance ~ D Neighborhood Description Adequate Yes No Relevance ~ D Property Description Adequate Yes No I Site Description ~ D Improvements Description 2Site D D 3Building D D Comments The appraisal includes a detailed discussion on the regional and neighborhood characteristics and factors that affect the Subiect Property. The property is adequately described and the report includes adequate exhibits. I Area, topo, access, etc. 2 Paving, landscaping, etc. 3 Design, construction, condition, etc. 7 Cost Approach Not Applicable ------------------------------------------------------------ ------------------------------------------------------------ Land Value Yes ~ No o Improvements Value Cost Estimates D D D D D D Depreciation Developer's Profit Sales Comparison Approach Adequate Sales Used Yes ~ ~ No D D Adjustments Income Capitalization Approach Lease/Rent Analysis Not Applicable Yes No D D D D D D D D D D Not Applicable Yes No 0 D D D D D 0 0 0 0 Rent Comparables Vacancy Estimate Expenses Estimate Capitalization Discounted Sellout Method Gross (Retail) Sellout Absorption Period Costs / Expenses Developer Profit Discount Rate 8 Correlation/Summary Adequate Yes No Logical & Consistent ~ o Certification and Assumptions/Limiting Conditions Adequate Yes No Certification Page ~ ~ o o Assumptions/Limiting Conditions Miscellaneous Adequate Yes No Survey, Plans, Maps, Pictures, Etc. o ~ o o o o Engagement Letter Enclosed Replacement Cost Estimate Comments The appraiser utilizes the only applicable approach to value (Sales Comparison Approach) and concludes at a reasonable estimate of Market Value for the property. 9 Completeness of report considering requirements applicable (Self-Contained Report). Satisfactory Adequacy and relevance of data in report. Satisfactory Appropriateness of appraisal methods and techniques used in report. Satisfactory Opinion as to whether the analysis, opinions and conclusions are reasonable. Satisfactory Final Comments/Conclusion The property was valued based on a Sales Comparison Approach. Although additional comparison based on price per unit should have been utilized by the appraisers, the value appears reasonable and the report is approved 10 CONTENGENT AND LIMITING CONDITIONS The certification of the Reviewer appearing in the review report is subject to the following conditions and to such other specific and limiting conditions as are set forth by the Reviewer in the review report. 1. The Reviewer assumes no responsibility for matters of a legal nature affecting the property which is the subject of this review or the title thereto, nor does the Reviewer render any opinion as to the title, which is assumed to be good and marketable. 2. The Reviewer is not required to give testimony or appear in court because of having made the review, unless arrangements have been previously made therefore. 3. The Reviewer assumes that there are no hidden or unapparent conditions of the property, subsoil, or structures, which would render it more or less valuable. The Reviewer assumes no responsibility for such conditions, or for engineering which might be required to discover such factors. 4. Information, estimates, and opinions furnished to the reviewer, and contained in the review report, were obtained from sources considered reliable and believed to be true and correct. However, no resJX>nsibility for accuracy of such items furnished the Reviewer can be assumed by the Reviewer. 5. Disclosure of the contents of the report is governed by the Uniform Standards of Professional Appraisal Practice and the Bylaws and Regulations of the professional appraisal organizations with which the Reviewer is associated. 6. Neither all, nor any part of the content of the review report, or copy thereof (including the conclusions of the review, the identity of the Reviewer, professional designations, reference to any professional appraisal organizations, or the firm with which the Reviewer is connected), shall be used for any purpose by anyone but the client specified in the review report, its successors and assigns, professional appraisal organizations, any state or federally approved financial institution, any department agency, or instrumentality of the United States or any state of the District of Columbia, without the previous written consent and approval of the Reviewer. 7. No change of any item in the review report shall be made by anyone other than the Reviewer and the Reviewer shall have no responsibility for any such unauthorized change. II CERTIFICA TION I certify that, to the best of my knowledge and belief: · The facts and data reported by the review appraiser and used in the review process are true and correct. · The analyses, opinions, and conclusions in this review are limited only by the assumptions and limiting conditions stated in this review report, and are my personal, impartial, and unbiased professional analyses, opinions and conclusions. · I have no present or prospective interest in the property that is the subject of work under review and no personal interest with respect to the parties involved. · I have no bias with respect to the property that is the subject of the work under review or to the parties involved with this assignment. · My engagement in this assignment was not contingent upon developing or reporting predetermined results. · My compensation is not contingent on an action or event resulting from the analyses, opinions, or conclusions in, this review or from its use. · My analysis, opinions, and conclusions were developed and this review report was prepared in conformity with the Uniform Standards of Professional Appraisal Practice. · I have made a personal inspection of the subject property of the work under reV1ew. · No one provided significant appraisal, appraisal review, or appraisal consulting assistance to the person signing this certification. · The use of this report is subject to the requirements of the State of Florida relating to review by the Department of Professional Regulation, Real Estate Appraisal Board, and to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. · As of the date of this report, I have completed the requirements of the continuing education program of the Appraisal Institute. 12 · I currently hold the appropriate state certification allowing the performance of real estate appraisals in connection with federally related transactions in the state in which the Subject Property is located. ;kIlL Douglas B. Lawson, MAl State-Cert. Gen. Appr. RZl70 13 AN APPRAISAL REVIEW OF A 4.32-ACRE PARCEL OF MULTI-FAMILY LAND LOCATED AT THE SOUTHEAST CORNER OFNORTHSEACRESTBOULEVARD AND NORTHEAST 7 ill A VENUE BOYNTON BEACH, FLORIDA 33435 PREPARED FOR MR. ROBERT T. REARDON BOYNTON BEACH COMMUNITY REDEVELOPMENT AGENCY 915 SOUTH FEDERAL HIGHWAY BOYNTON BEACH, FLORIDA 33435 ASOF NOVEMBER 4,2006 BY DOUGLAS B. LAWSON, MAl LA WSON V ALUA nON GROUP, INC. +. LAWSON VALUATION GROUP, INC. Affiliated with National Valuation Group Corporate Office Real Estate Appraisers and Consultants Palm Beach Gardens, Florida Licensed Real Estate Broker 8895 N. Military Trail, Suite 304E Palm Beach Gardens, FL 33410-6263 Telephone: (561) 622-5533 Fax: (561) 622-0159 Affiliate Offices Austin, Texas Houston, Texas Irvine, California Scottsdale, Arizona November 20, 2006 Mr. Robert T. Reardon, Assistant Director Boynton Beach Community Redevelopment Agency 915 South Federal Highway Boynton Beach, Florida 33435 Re: Appraisal Review 4.3 2- Acre Parcel SEC North Seacrest Blvd. and NE 7th Avenue Boynton Beach, Florida Dear Mr. Reardon: As requested, we have made an investigation and analysis of the above referenced property. The purpose of this investigation and analysis was to review an appraisal prepared for you by Robert B. Banting and Beau M. Arnold of Anderson and Carr, Inc. as of October 4, 2006. The purpose of their appraisal was to provide an estimate of As Is Market Value of the Fee Simple Estate of the property for possible acquisition by the Boynton Beach Community Redevelopment Agency. The Subject Property consists of a 4.32-acre parcel of multi-family land located at the southeast comer of North Seacrest Boulevard and NE 1h Avenue. The Land Use Plan currently allows development with a density of 10.8 dwelling units per acre. The City is reviewing an amendment which would allow up to 20 units per acre provided the project provides an affordable housing component. The appraisers considered the reasonableness of this increased density in their valuation of the property. The extent of research and analysis performed for the appraisal report reviewed conforms to the reporting requirements set forth under Standards Rule 2-2(a) of the Uniform Standards of Professional Appraisal Practice for a Self-Contained Appraisal Report. Mr. Robert T. Reardon Boynton Beach Community Redevelopment Agency November 20, 2006 Page Two A checklist with our review comments follows this letter. If you have any questions concerning this review, or if Lawson Valuation Group, Inc. can be of further service, please do not hesitate to contact us. This is a desk review completed for Boynton Beach Community Redevelopment Agency. The purpose is to determine compliance with Uniform Standards of Professional Appraisal Practice (USP AP) and the reasonableness of the value estimate. Appraisal Review is defined in USP AP (2006 Edition) as "the act or process of developing and communicating an opinion about the quality of another appraiser's work that was performed as part of an appraisal, appraisal review, or appraisal consulting assignment." This appraisal review is not an appraisal, and the contents of the review report are intended solely for the internal use of Boynton Beach Community Redevelopment Agency. Respectfully Submitted, LAWSON VALUATION GROUP, INe. tf!r1lL Douglas B. Lawson, MAl State-Cert. Gen. Appr. RZ 170 Attachments DBL;kjl (File #6393a) LAWSON VALUATION GROUP, INC. File # 6393a Account Name 4.32 acre tract of multi-family land Property Location Southeast comer of North Seacrest Boulevard and NE th Avenue. in Boynton Beach., Florida. ClientlIntended User Boynton Beach Community Redevelopment Agency Intended Use To assist the client in evaluation for possible purchase. Purpose To evaluate compliance with relevant Uniform Standards of Professional Appraisal Practice CUSP AP) requirements and reasonableness of value estimate. Scope of Work In preparing this review. Douglas B. Lawson read the reference appraisal report. researched the market for additional information and inspected the property. In the course of the assignment. I also reviewed a separate appraisal prepared by Altair Appraisal Group dated July 4. 2006. The later appraisal was prepared for Mellon United National Bank intended for mortgage financing on the property. In the course of this review. this appraiser has developed an opinion of value about the Subiect Property under review as of the effective date of appraisal. The information in the work under review that is credible and in compliance has been extended to my value opinion. There are no extraordinary assumptions used in the appraisal. Review Appraiser Douglas B. Lawson. MAL Lawson Valuation GrouP. Inc. Date of Review October 20.2006 Property Inspected October 16.2006 Effective Date of Opinion or Conclusion in the Work under review October 4.2006 Appraiser's NameIFirm Robert B. Banting. MAL SRA and Beau M Arnold. Anderson and Carr. Inc. Type of Appraisal/Report Self-Contained Report Property Type Multi-family Residential Land Interest Appraised Fee Simple Effective Date of Appraisal October 4.2006 4 Value Estimated "As Is" $3.400.000 "Upon Stabilization" "Upon Completion" Not Applicable Not Applicable Other Reviewer's Estimate of Value Cost Approach Sales Comparison Approach Income Ca italization A roach Final Estimate of Value Not Applicable $3,400,000 Not A licable $3,400,000 Value Following Review [gI Same As Above D Different From Above Report complies with USP AP requirements and generally acceptable appraisal policies Yes IZI NoD Report is acceptable, as is [gI Report is unacceptable D Report is acceptable, subject to clarification or additional information D Comments The revie\\ed appraisal complies with Uniform Standards of Professional Appraisal Practice (USPAP) and is based on generally well-supported data. The information in the report is adeouate and relevant. The methods of valuation used by the appraisers in the report are amropriate and the analyses. opinions. and conclusions are adeouate and reasonable. The property's Market Value was based on five (5) recent comparable land sales. The appraisers chose to analyze the data on the basis of price per SoFt of land area. The comparable sales range from $11.13 per SoFt for Sale I to $42.58 per Soft for Sale 2. The sales have been compared to the appraised property with "qualitative adiustments". being similar. superior or inferior. The value indicated for the Subiect Property is more than $11.13 and less than $21.55 per SoFt. The appraisers concluded near the middle portion of the range at $18.00 per SoFt for a Market Value of $3.400.000. The value appears reasonable and the report is acceptable. Although reasonable. the price per planned or approved unit should also have been analyzed and at least considered The value eouates to $39.535 per potential unit based on the maximum 86 dwelling units that would be allowed under the zoning change and $73.913 per unit based on the current density of 10.8 units per acre. These numbers appear at the high end of a reasonable range based on the sales provided and other sales in the market area. 5 General Data Adequate Yes No Legal Description ~ D Purpose of Appraisal [gI D Intended use of Appraisal [gI D Scope of the Appraisal [gI D Property Rights Appraised [gI D Definition of Market Value [gI D Assessed Value/Taxes [gI 0 Flood Zone Information [gI 0 Subject History [gI 0 Exposure/Marketing Periods [gI 0 Zoning Adequate Identified & Discussed Yes ~ No D Highest and Best Use Adequate No D o o Consistent with valuation Yes ~ o [gI Analysis "as if vacant" Analysis "as Improved" Comments The general Property Data is adequate. The zoning is identified and fully discussed. The highest and Best Use of the property is fully discussed and supported and consistent with the value. 6 Area Description Adequate Yes No Relevance ~ 0 Neighborhood Description Adequate Yes No Relevance ~ 0 Property Description Adequate Yes No 1 Site Description ~ 0 Improvements Description 2Site ~ o 3Building o o Comments The appraisal includes a detailed discussion on the regional and neighborhood characteristics and factors that affect the Subiect Property. The property is adequately described and the report includes adequate exhibits. Cost Approach Not Applicable I Area, topo, access, etc. 2 Paving, landscaping, etc. 3 Design, construction, condition, etc. 7 ------------------------------------------------------------ ------------------------------------------------------------ Land Value Yes !Xl No o Improvements Value Cost Estimates D D D D D D Depreciation Developer's Profit Sales Comparison Approach Adequate Sales Used Yes ~ ~ No o D Adjustments Capitalization Not Applicable Yes No D D D D D D D D D D Not Applicable Yes No D 0 D D D D D D D D Income Capitalization Approach Lease/Rent Analysis Rent Comparables Vacancy Estimate Expenses Estimate Discounted Sellout Method Gross (Retail) Sellout Absorption Period Costs / Expenses Developer Profit Discount Rate 8 Correlation/Summary Adequate Yes No Logical & Consistent ~ o Certification and Assumptions/Limiting Conditions Adequate Yes No Certification Page ~ ~ o o Assumptions/Limiting Conditions Miscellaneous Adequate Yes No Survey, Plans, Maps, Pictures, Etc. o ~ o o o o Engagement Letter Enclosed Replacement Cost Estimate Comments The appraiser utilizes the only applicable approach to value (Sales Comparison Approach) and concludes at a reasonable estimate of Market Value for the property. 9 Completeness of report considering requirements applicable (Self-Contained Report). Satisfactory Adequacy and relevance of data in report. Satisfactory Appropriateness of appraisal methods and techniques used in report. Satisfactory Opinion as to whether the analysis, opinions and conclusions are reasonable. Satisfactory Final Comments/Conclusion The property was valued based on a Sales Comparison Approach. Although additional comparison based on price per unit should have been utilized by the appraisers, the value appears reasonable and the report is approved. It is noted the appraisers used a slightly different land area (4.32 acres) than the property owner's appraiser used (4.39 acres). The property owner's appraisal references a survey by O'Brian & Suiter & O'Brian. The resulting value change has nominal impact after rounding to the nearest significant digit as all of the appraisers have done. . 10 CONTENGENT AND LIMITING CONDITIONS The certification of the Reviewer appearing in the review report is subject to the following conditions and to such other specific and limiting conditions as are set forth by the Reviewer in the review report. 1. The Reviewer assumes no responsibility Dr matters of a legal nature affecting the property which is the subject of this review or the title thereto, nor does the Reviewer render any opinion as to the title, which is assumed to be good and marketable. 2. The Reviewer is not required to give testimony or appear in court because of having made the review, unless arrangements have been previously made therefore. 3. The Reviewer assumes that there are no hidden or unapparent conditions of the property, subsoil, or structures, which would render it more or less valuable. The Reviewer assumes no responsibility for such conditions, or for engineering which might be required to discover such factors. 4. Information, estimates, and opinions furnished to the reviewer, and contained in the review report, were obtained from sources considered reliable and believed to be true and correct. However, no res{X)nsibility for accuracy of such items furnished the Reviewer can be assumed by the Reviewer. 5. Disclosure of the contents of the report is governed by the Uniform Standards of Professional Appraisal Practice and the Bylaws and Regulations of the professional appraisal organizations with which the Reviewer is associated. 6. Neither all, nor any part of the content of the review report, or copy thereof (including the conclusions of the review, the identity of the Reviewer, professional designations, reference to any professional appraisal organizations, or the firm with which the Reviewer is connected), shall be used for any purpose by anyone but the client specified in the review report, its successors and assigns, professional appraisal organizations, any state or federally approved financial institution, any department agency, or instrumentality of the United States or any state of the District of Columbia, without the previous written consent and approval of the Reviewer. 7. No change of any item in the review report shall be made by anyone other than the Reviewer and the Reviewer shall have no responsibility for any such unauthorized change. II CERTIFICATION I certify that, to the best of my knowledge and belief: · The facts and data reported by the review appraiser and used in the review process are true and correct. · The analyses, opinions, and conclusions in this review are limited only by the assumptions and limiting conditions s:ated in this review report, and are my personal, impartial, and unbiased professional analyses, opinions and conclusions. · I have no present or prospective interest in the property that is the subject of work under review and no personal interest with respect to the parties involved. · I have no bias with respect to the property that is the subject of the work under review or to the parties involved with this assignment. · My engagement in this assignment was not contingent upon developing or reporting predetermined results. · My compensation is not contingent on an action or event resulting from the analyses, opinions, or conclusions in, this review or from its use. · My analysis, opinions, and conclusions were developed and this review report was prepared in conformity with the Uniform Standards of Professional Appraisal Practice. · I have made a personal inspection of the subject property of the work under reV1ew. · No one provided significant appraisal, appraisal review, or appraisal consulting assistance to the person signing this certification. · The use of this report is subject to the requirements of the State of Florida relating to review by the Department of Professional Regulation, Real Estate Appraisal Board, and to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. · As of the date of this report, I have completed the requirements of the continuing education program of the Appraisal Institute. 12 . I currently hold the appropriate state certification allowing the performance of real estate appraisals in connection with federally related transactions in the state in which the Subject Property is located. Douglas B. Lawson, MAl State-Cert. Gen. Appr. RZ170 13 1~~qY~Te~ eRA Iii East Side-West S.de-Seaslde Renaissance If any person decides to appeal any decision made by the Board with respect to any matter considered at this meeting, he or she will need a record of the proceedings, and that, for such purpose, he or she may need to ensure that a verbatim record of the proceedings is made, which record includes the testimony and evidence upon which the appeal is to be based. CRA Board Meeting Tuesday, March 13, 2007 - REVISED City Commission Chambers 6:30 P.M. I. Call to Order - Chairman Henderson Tillman II. Pledge to the Flag and Invocation III. Roll Call IV. Agenda Approval A. Additions, Deletions, Corrections to the Agenda B. Adoption of Agenda C. Consent Aaenda: A. CRA Board Meeting Minutes Approval February 6, 2007 B. Special Meeting Minutes Approval February 15, 2007 C. MLK Corridor Workshop Meeting Minutes Approval February 15, 2007 D. Workforce Housing Ordinance Meeting Minutes Approval February 27, 2007 E. Approval of the Financials Period Ended February 28, 2007 F. Old High School Update G. Deleted Item and Added to as Item E under Old Business H. Support of Local Artists I. Deleted Item entirely J. Table Purchase Approval for Annual Award Dinner - BB Faith Based CDC K. Approval to Allow Electronic Funds Transfer "EFT" V. Public Comments: (Note: comments are limited to 3 minutes in duration) VI. Public Hearing: Old Business - None New Business: Site Plan Time Extension A. PROJECT Ocean Breeze West (SPTE 07-002) AGENT: Bradley Miller, Miller Land Planning Consultants, Inc. OWNER: Larry Finkelstein, Affordable Housing, LLC LOCATION: Southwest corner of Northwest 8th Avenue and Seacrest Boulevard, located approximately 1,700 feet north of Boynton Beach Boulevard. DESCRIPTION: Request for a one (1) year site plan time extension for Ocean Breeze West (NWSP 05-030) approved on January 3, 2006, from January 3, 2007 to January 3, 2008. Seaview Park Club Site Plan Time Extension B. PROJECT Seaview Park Club (SPTE 07-003) AGENT: Lorie Moccia, Lennar Homes OWNER: Lennar Homes, LLC LOCATION: 1620 N. Federal Highway DESCRIPTION: Request for a second one (1) year site plan time extension for Seaview Park Club (NWSP 04-014) approved on February 15, 2005, from February 15, 2007 to February 15, 2008 VII. Pulled Consent Agenda Items VIII. Old Business: A. Approval to Purchase Properties - at NE 5th Avenue B. MLK Corridor Development Agreement Update & Discussion C. Approval to Purchase Property - at NW 12th Avenue D. Ocean Breeze Options Discussion . E. Approval of Dive Shop Lease IX. New Business: A. Consideration of Purchasing the Women's Club B. Consideration of Issuing an RFP for Ocean Breeze C. Consideration of Sponsoring the Avenue of the Arts D. Funding Request: Lasendra Haggins for Homebuyers Program-$47,OfJO E. Consideration of Issuing an RFQ for Professional Services F. Consideration of Purchasing Property-at NE 1 st Street (Downtown Parking) G. Presentation of the New CRA Website H. Second Amended Mediation Agreement Transfer Discussion X. Comments by Staff XI. Comments by Executive Director XII. Comments by CRA Board Attorney XIII. Comments by CRA Board XIV. Adjournment: MINUTES OF THE COMMUNITY REDEVELOPMENT AGENCY MEmNG HELD IN CITY COMMISSION CHAMBERS, BOYNTON BEACH, FLORIDA ON TUESDAY, MARCH 13, 2007, AT 6:30 P.M. Present: Henderson Tillman, Chair Stormet Norem, Vice Chair Rev. Lance Chaney Jeanne Heavilin Marie Horenburger Steve Myott Lisa Bright, Executive Director Ken Spillias, CRA Board Counsel Amy Dukes, CRA Counsel Absent: Guarn Sims 1. Call to Order - Chairman Henderson Tillman Chair Tillman called the meeting to order at 6:33 p.m. II. Pledge to the Flag and Invocation The board recited the Pledge of Allegiance to the Flag, followed by the invocation led by Rev. Chaney. III. Roll Call The Recording Secretary called the roll and determined a quorum was present. It was noted Mayor Taylor and Amy Dukes, Attorney with Lewis, Longman and Walker, were present. IV. Agenda Approval A. Additions, Deletions, Corrections to the Agenda Attorney Spillias pulled Consent Agenda Items A and C. Mr. Myott pulled Consent Agenda Item F. There was discussion the board wanted to hear the Ocean Breeze items together. 1 Meeting Minutes Community Redevelopment Agency .=ynton Beach, Florida March 13, 2007 B. Adoption of Agenda Motion Ms. Horenburger moved approval of the agenda with the removal of Item A, C and Ffrom the Consent Agenda; to reorder VI. Public Hearing New Business, switching Item B, Site Plan Time Extension with Item A Site Plan Time Extension; hearing VIII. Old Business Item D immediately thereafter followed by pulled Consent Agenda Items A, C and F. Ms. Heavilin seconded the motion that unanimously passed. C. Consent Agenda: A. CRA Board Meeting Minutes Approval February 6, 2007 B. Special Meeting Minutes Approval February 15, 2007 C. MLK Corridor Workshop Meeting Minutes Approval February 15, 2007 D. Workforce Housing Ordinance Meeting Minutes Approval February 27, 2007 E. Approvals of the Financials Period Ended February 28, 2007 F. Old High School Update G. Deleted Item and Added to as Item E under Old Business H. Support of Local Artists I. Deleted item entirely J. Table Purchase Approval for Annual Award Dinner - BB Faith Based CDC K. Approval to Allow Electronic Funds Transfer "EFT" V.Public Comments Chair Tillman opened the floor for public comments. No one coming forward, Chair Tillman closed the floor to public comments. VI. Public Hearing Attorney Spillias requested board members disclose whether they had any ex parte communications. Vice Chair Norem reported he met with Richard Baron of McCormack, Baron Salazar, while in Tallahassee, but not on any public hearing items. Attorney Spillias administered the oath to all persons who would be testifying. . 2 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 13, 2007 Old Business: None. New Business: Site Plan Time Extension (Heard out of order) B. PROJECT: AGENT: OWNER: LOCATION: DESCRIPTION: Seavlew Park Club (SPTE 07-003) Lorie Moccia, Lennar homes Lennar Homes, LLC 1620 N. Federal Highway Request for a second one (1) year site plan time extension for Seaview Park Club (NWSP 04-014) approved on February 15, 2005 Gabriel Wuebben, Planner, presented the request and announced staff was satisfied the applicant put forward a good faith effort. The applicant had requested a Site Plan Time Extension in February 2006, and was requesting a second extension to February 15, 2008. The applicant would need to approach Palm Beach County again to extend the build-out date as contained in Exhibit C of the terms and conditions of approval. Staff recommended approval of the one-year site plan time extension subject to all the original terms and conditions and noted there were no new regulations to review the project against. There were no comments from the board. Chair Tillman opened the floor for public hearing. Michael Weiner, Attorney for the applicant, advised they had a list of good faith efforts from the applicant on the project. The project underwent a substantial amount of work; however, the site preparation was not completed. Harry Woodworth, 685 NE 15th Place had property that adjoined the building site. He explained the applicant had been working on the project for two years. He asked the board to consider what it was like living next to diesel fumes, noise, the dewatering pumps and other issues, and to be considerate of those aspects when granting the extensions. He also noted the notice he received for the meeting was dated 2006. Attorney Weiner explained the applicant needed another 60 days to complete the land development portion of the project, and then infrastructure would go in. They placed shielding where possible to minimize any development impacts and placed monitors on site. Attorney Weiner explained they wanted to continue on in the process. Chair Tillman closed the floor to public hearing. 3 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 13, 2007 Johnny Lynch, Lennar Homes, reported the architectural drawings, which were previously submitted to the board, were completed. The permits for vertical construction were not submitted, but were expected to be submitted shortly. Motion Mr. Myott moved to approve the request. Vice Chair Norem seconded the motion that unanimously passed. Site Plan Time Extension A. PROJECT: AGENT: OWNER: LOCATION: DESCRIPTION: Ocean Breeze West (SPTE 07-002) Bradley Miller, Miller Land Planning Consultants, Inc. Larry Finkelstein, Affordable Housing, LLC Southwest corner of Northwest 8th Avenue and Sea crest Boulevard, located approximately 1,700 feet north of Boynton Beach Boulevard. Request for a one (1) year site plan time extension for Ocean Breeze West (NWSP 04-014) approved on February 15, 2005, from February 15, 2007 to February 15,2008 Kathleen Zeitler, Planner, presented the request and explained the applicant requested the one-year site plan time extension and had a list of the details for the project. There were no new regulations to review the project against. It was clarified the extension would actually be for 10 months, to January 3, 2008 and the project would be exempt from the Art in Public Places Ordinance. Staff reviewed the request and recommended approval subject to the original conditions of approval. Bradley Miller, agent for the applicant, explained some permits were received and discussions with the CRA on what to do with the project brought it to a slow halt. This project pertained to the western portion of the site. Chair Tillman opened the floor to public hearing. Rev. Glen Lyons, 2190 NE 1st Lane, received notice of the meeting and commented his parcel control number was on it. He was unsure why he had not been personally contacted regarding the reason his property was referenced on the letter. Vivian Brooks, CRA Planner, explained the parcel control number was listed because he was within 400 feet of the subject property and, statutorily, notification to surrounding property owners must take place. Chair Tillman closed the floor to public hearing. Ms. Zeitler explained staff reviewed the request and recommended approval subject to the original conditions of approval. 4 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 13, 2007 Motion 41 Vice Chair Norem moved to approve the request. Ms. Heavilin seconded the motion that unanimously passed. VIII. Old Business, Item D. Ocean Breeze Option~ discussion - (Heard out of Ordel1 . Lisa Bright, CRA Executive Director, explained an incentive for this project was approved a year ago. Mr. Finkelstein had been involved in an accident and in September, staff was given direction to purchase the parcel(s) from Mr. Finkelstein. An appraisal was ordered, which showed a discrepancy in the appraisal price provided by Mr. Finkelstein. This property greatly enhanced the land acquisition control of the HOB project area and staff negotiated a purchase agreement for $6.4M. Additionally, fee waivers would be included in the amount of $496K, bringing the total purchase price to about $7M. Ms. Horenburger asked why the $400K for demolition was not included in the appraisal. Mr. Finkelstein explained the appraiser was only asked to look at the value of the land and not the additional value of the other components associated with purchasing the property. The impact fee waivers were half a million dollars from the County that ran with the property. Mr. Reardon explained he directed the appraiser to eliminate those values from the original appraisal. He provided a letter from the County and indicated he tried to discount the waivers but the issue was non-negotiable. The letter from the County was given to the appraiser who verified the amount was a true value. When the project is sold to a new dev~loper, the CRA would likely receive the money back, have additional workforce housing built, or receive some other type of quid pro quo. Mr. Reardon took responsibility for why those monies were not included and indicated he tried to save the money. Mr. Reardon explained the reason the demolition fees the CRA paid were not included in those calculations was the board exonerated Mr. Finkelstein from the cost of the fees, which was $371K. Attorney Spillias confirmed Mr. Reardon's statement. When the project was completed, the lien would be waived. If the board moved forward with purchasing the property, the CRA would be purchasing it subject to its own lien and it would still be on the property. Ultimately when the CRA decided what to do with the land the CRA could make a decision then. Until that time, the lien was still a debt owed from the property. Ms. Horenburger asked if the lien issue was factored into the current appraisal. She thought not recapturing those monies was taking money out of the public's pockets. Mr. Reardon explained it was not. It would be a moot point when the board passed the lien back onto itself. Vice Chair Norem explained if there were buildings still existing on the property today, they would be factored in because then there would be a cost of demolition and it would devalue the property. Mr. Reardon confirmed that as correct and explained the eRA would have to demolish the buildings at present day cost. 5 Meeting Minutes Community Redevelopment Agency ~ynton Beach, Florida March 13, 2007 Rev. Chaney asked when the appraisal was conducted if the lien would be included. Mr. Reardon explained land has a value irrespective of any liens on it. The sale price would reflect that point, but the intrinsic value of the land was not deteriorated by any liens. Mr. Finkelstein was present and announced, for the record, he was prepared to sell the land to the CRA now. He announced, on record, he agreed to a contract on the eRA terms and price, from their appraisal. He agreed to execute the contract drafted by the CRA attorney. He announced there was no other parties he was negotiating with and the CRA attorney had the contract. The contract had a time frame for execution and had to be signed by tomorrow in order to be valid. Motion Vice Chair Norem moved to approve the item. Ms. Heavilin seconded the motion, which passed 4-2 (Ms. Horenburger and Rev. Chaney dissenting) VII. Pulled Consent Agenda Items ~ A. CRA Board Meeting Minutes Approval February 6, 2007 Attorney Spillias noted corrections on pages 11 and page 12 as "Mr. Sims read correspondence from the CRA Attorney" The sentence should read "correspondence received from the CRA Attorney" since the correspondence was not his correspondence. On page 12, the last word of the first partial paragraph, third line last word should be "contracts" as opposed to contract. Motion Ms. Horenburger moved to approve the minutes as amended. Vice Chair Norem seconded the motion that unanimously passed. C. MLK Corridor Workshop Meeting Minutes Approval February 15, 2007 Attorney Spillias noted corrections to the February 15, 2007 Workshop meeting minutes. Page 1 - Agenda Approval, Spillias was spelled "Spills" Page 1 - Under Old Business, Mr. Myott discussed what everyone's "roll" would be. The word "roll" should be spelled "role". Page 1 - Last paragraph third line down reads, "the City Commission voiced", should read the "City Attorney voiced" Page 1 - Last paragraph fifth sentence reads "Only Mr. Bressner . . ." should include the words "and Mr. Cherof' Motion Ms. Horenburger moved to approve Consent Agenda Item C as amended. Vice Chair Norem seconded the motion that J.lnanimously passed. 6 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 13, 2007 F. Old High School Update Five Towns College withdrew from accepting the Old High School Building for use as an administrative hub for the college. Mr. Myott asked for further information on the second ranked proposer and the property. Ms. Bright explained she had a lot of interest from other developers. Larger developers were waiting to see if City Hall would move because there were looking to develop projects with a larger footprint. Artspace from Ft. Lauderdale was very interested in the building and the Brennar Group was also interested. Vivian Brooks, CRA Planner, explained there were many similar properties being developed as affordable living spaces for artists, with studios and gallery spaces included. The entities were non-profit 501c(3) corporations who usually resided in historic buildings. One was being built in Ft. Lauderdale and Ms. Brooks advised she would be visiting the facility. Mr. Myott suggested getting another candidate and having the information by the next meeting. Ms. Heavilin suggested not taking any action on the item until after the downtown plan decisions were made. She expressed the footprint may need to be changed. Chair Henderson agreed and thought the project did not have to be moved on so expediently. He thought the CRA should get the most deal for the money, and suggested not moving it forward. Ms. Bright would have a staff report on this placed on the Consent Agenda. Chair Tillman wanted to have the updates given and then at the proper time to bring them all together for discussion. VIII. Old Business: A. Approval to Purchase Properties - at NE 5th Ave. Rev. Chaney left the meeting at 7:10 p.m. Ms. Brooks explained staff was authorized to negotiate this property with the Boynton Beach Faith Based CDC. There were five individual lots with homes on them. Acquiring the property would add an additional 16 units on the property as well has have frontage on the street. The CDC agreed to purchase the property from the CRA at half the value and the parties agreed the property would not be sold to the CDC until they had a construction loan for the project. If the CDC could not get the project off the ground, the CRA would purchase the property back. A site plan was developed with the units being in the high 100'5 and low 200'5. Staff recommended approval of the request. Ms. Horenburger discussed tax reductions and expressed concern with other properties and appraisals. On affordable housing units, the property appraiser would appraise the unit as a deed restricted unit that did not have the same value as a market unit. This was a result of the Palm Beach County Days. Ms. Bright reported when she attended Palm Beach County Days In Tallahassee, the language for a bill amendment for affordable housing was added. . 7 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 13, 2007 Mr. Myott recused himself from this item and filed Form 8B, Memorandum of Voting Conflicy for County, Municipal, and other Local Public Officers because he worked on the plans for the project. Motion Vice Chair Norem moved approval. Ms. Heavilin seconded 'the motion that passed 5-0. (Mr. Myott abstaining). B. MLK Corridor Development Agreement Update & Discussion Ms. Bright announced there was no meeting set or response to the Development Agreement. On the staff level, on February is, 2007, staff was asked to contract with the Treasure Coast Regional Planning Council (TCRPC) on this item. The TCRPC team was present to discuss deliverables. Kim Delaney, TCPRC Growth Coordinator, advised they conducted an economic and planning analysis. They had brought in Economics Research Associates (ERA), a firm that participated in 20 projects in Florida, many of which were in redevelopment areas and was heavily involved in a Transit Oriented Development (TOO) project in West Palm Beach. Additionally, the firm served as an economic and Tax Increment Financing (TIF) advisor to other areas. ERA announced they clearly understood the issues involved with rehabilitation and redevelopment in complex projects. In May and June of 2005, the firm met with Intown for feedback on a multi- disciplined project, for this area, since ERA has experience with affordable housing strategies and workforce housing. The scope of services for the TCRPC analysis over the next two months would be to undertake a demographic and economic profile of the drivers of demand for real estate and housing. The market slowed and the TCRPC wanted to be clear what the drivers were. Market conditions and comparables for residential and retail segments would be reviewed to understand how quickly those units are absorbed. Then the TCRPC would integrate all the research into different test models to identify a recommended development program that would be tested against what was submitted by the developer in their August presentation. A physical analysis and assessment of the site would be conducted and a final report would be available shortly after May 8,2007. Ms. Bright explained Ms. Delaney was proactive and was meeting with the Intown principals to review the pro forma, which was new. Ms. Horenburger pointed out in the original analysis, the CRA paid enormous prices for property. She wanted to see a true analysis of what was there, based on current value. She explained knowing the realities of the current costs were important. Ms. Delaney explained the current land values were higher than what they wanted to see, which created different strains in the market and value was built into the market now. She clarified they needed to determine what housing products were, if they would work, as well as . 8 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 13, 2007 what a reasonable buy down would be in order to be absorbed into the market. Ms. Horenburger also pointed out there would be a change in the dwelling units per acre and asked what was the process for zoning and land use changes. Mike Rumpf, Planning and Zoning Director, explained the process could be either a large or small-scale amendment, with the threshold of a large-scale. amendment being 10 acre. The process ranges from 4 months to an 8 to 12 month process, which involves the state, public hearings and a City Commission transmittal hearing. Mr. Wobash, also of TCRPC, explained they look for three key issues, which were, return to developer, what is a supportable land value, and if there is a gap at the end of the day, what role does the public sector play to close the gap. The study is not a full financial feasibility pro forma, but it should be considered based on declining land values and market conditions. It was requested a financial model be conducted. Mr. Wobash indicated that model would require about a month to do, after the market analysis was completed in May. Ms. Bright explained she received information from the CRA lobbyist about financing for the CRA. Mr. Reardon alerted the board to outstanding debt and/or contemplating debt financing and the pledging of TIF revenues that the bondholders lien does not attach until the deposits are made into the trust fund. Mr. Reardon reported CRAs are not insulated from decreases in property values or milage rates and they needed to know the property tax reform debate would directly affect them. Mr. Reardon cautioned about pledging future bonding on projects that the CRA might not be able to pay the debt on. The City, as the CRA backstop, also needed to be cognizant of that fact. The bond documents stipulate, on both bonds, that there is a debt cap of 150%. The CRA cannot pledge upfront bonding because it may violate the CRA bond documents irrespective of what the legislature mayor may not do and the board can not pledge up front bonding without running the issue through bond counsel first. This fact added to the necessity of including a financial analysis. Ms. Delaney advised they would add that as another task and bring back the information. Motion Ms. Horenburger moved approval to have the TCRPC conduct a financial analysis of whatever the result of the legislative session is with regard to TIF and other matters in regard to the MLK project in particular. Vice Chair Norem seconded the motion that unanimously passed. Mr. Reardon added TIF funds are received on the back end of the project, not up front. Ms. Bright announced Mr. Baron spoke to CRA members at Palm Beach County Days and indicated a joint venture partnership agreement had been executed between McCormack Baron Salazar and Intown. The City Manager was not aware of this. Both Ms. Horenburger and Vice Chair Norem advised Mr. Baron informed them he had submitted the agreement to Mayor Taylor. Mayor Taylor was present and responded he was shown the document but did not have 9 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 13, 2007 it. After further discussion, Attorney Splllias announced he would make a formal request for the document. C. Approval to Purchase Property - at NW 12th Avenue Ms. Brooks explained this property was a standard infill lot and part of the Heart of Boynton work program. ' Motion Ms. Horenburger moved approval of the purchase. Vice Chair Norem seconded the motion that unanimously passed. D. Ocean Breeze Options Discussion - this item was addressed earlier in the meeting E. Approval of Dive Shop Lease Amy Dukes, CRA Counsel, explained after the last meeting she met with counsel for Ms. Simmons on the Dive Shop lease. The board had revised the document. Attorney Dukes advised all the issues were worked out except for one, which were the property taxes. She asked whether the board wanted to include the property tax on top of the $1,500 per month rate. The tax worked out to be $167.89 broken down on a square foot pro rata basis per month. A discussion ensued about what was customary for government leasing property and the County Commercial Real Estate Property Division would not send out an appraiser until July. It was possible the taxes would be raised or lowered. Ryan Copple, Attorney for SplaShdown Divers, disagreed on the Issue. He explained the lease was an interim lease for the period of one year. During that time period, there would likely be construction ongoing and the client would not be on the premises then. He advised the rent would be increased about 10%, but pointed out in the past, property taxes were in the rent. If the rent increased while she was not on the premises, it would put a strain on the business. A discussion followed about the property. The CRA was not in business to pay taxes for individuals outright. It was assumed those businesses could meet that expense. The CRA was being asked to pay the taxes of the business. It was suggested determining the value while they were doing business, and dividing the amount by month. Further discussion focused on increasing the rent to include the amount or continuing the lease for the $1,500 per month and the minute the Dive Shop reoccupies the improved space, the lease payment and tax payment becomes due. Mr. Reardon noted the tenant was occupying the space now. Motion Ms. Horenburger explained the expectation was to pay $1,500 per month and renegotiate next year. Ms. Horenburger moved to that effect. (Motion died for lack of a second.) 10 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 13, 2007 Vice Chair Norem asked if the CRA was charging market rent the public would expect to pay for that property. The CRA was not and it was noted the CRA was disrupting the businesses there for a good public purposes. Mr. Myott discussed there was nothing wrong with gIving a break with the expectation that when the bathroom was complete they would go market rate. This was an interim lease. Motion Mr. Myott moved to proceed with the lease as written. Ms. Horenburger seconded the motion and clarified the motion as there were no taxes on the interim lease effective from April 1st for one year and then renegotiate the lease well in advance of the expiration of the lease. It was noted the leases did not need to be advertised. ~ The motion unanimously passed. IX. New Business: A. Consideration of Purchasing the Women's Club Ms. Brooks explained the CRA was considering the purchase of the above. An appraisal was received and she spoke with the Palm Beach County Historical Society. This was a good opportunity for the CRA. Motion Vice Chair Norem moved to direct staff and legal to make preparations for this. Ms. Heavilin seconded the motion for discussion. There was discussion on where the funds for the purchase were coming from. Mr. Reardon explained the General Fund would be receiving reclaimed monies shortly. Ms. Bright clarified a time lapse occurred on the pro forma for 500 Ocean Plaza and other developers were interested in partnering on the project. The Direct Incentive Funding Agreement (DIFA) appropriated would not fund the gap in the market conditions. CRA counsel needed to draft a letter advising the $2M set aside would return to the CRA. Parking for the facility was previously accommodated by the Senior Center parking through an arrangement with the City. Ms. Brooks hoped that arrangement would continue. Ms. Brooks also announced her mother was a member and past president of the Women's Club. Mr. Reardon reiterated, moving forward the board should not spend bond monies up front. There was additional discussion this was a cultural opportunity for small venues and another opportunity to obtain land on Federal Highway. 11 Meeting Minutes Community Redevelopment Agency Boynton Beach, Florida March 13, 2007 Y.QW There was a vote on the motion that unanimously passed. B. Consideration of Issuing an RFP for Ocean Breeze Ms. Bright explained when staff negotiated the purchase agreement with Mr. Finkelstein she needed to know if the board wanted to wait until the purchase agreement closed before issuing the RFP for Ocean Breeze. The document was already approved by the attorney to get the RFP out to the public. ~ Ms. Horenburger explained the document did not clearly define the boundaries of the east side properties. There needed to be additional language or the legal description included. The board discussed the reorientation of the parcels to face Seacrest and they were included in the package. The CRA was trying to square off the site. Ms. Bright explained there had been significant interest in those properties from various parties. The property encompassed not just the Ocean Breeze site, but the Peters property as well. Motion Vice Chair Norem moved approval. Mr. Myott seconded the motion that unanimously passed. C. Consideration of Sponsoring the Avenue of the Arts Staff explained this item was to kick start the creation of the downtQwn area where 10 pieces of sculpture, primarily from Ocean Avenue to the Intracoastal as the downtown area begins to emerge. Debby Coles-Dobay, Public Art Administrator, thanked the board and explained the program should stimulate growth in the downtown area. The program was a year-long program, for art to be put on loan and strategically placed to encourage travel to an area. People could see what was being built. This year, there were no funds to do this due to many projects haVing site plan time extensions. Ms. Coles-Dobay reviewed the different locations on the map. She advised they already had podiums and she spoke about the artists who were selected by the committee. A commitment to install the art and to ensure they would be able to withstand the windload standards needed to be made. International and local artists were involved. They were trying to coordinate this to the August 4th event at the Marina, which was the Jazz and Seafest. Visitors could look at the artwork arid listen. She reviewed the costs and procedures to do this. The largest cost was to have the pads poured and installed. She was seeking a sponsorship basically to construct the pads and there were other costs such as stipends to bring in the work. There were sponsorship opportunities for individuals, businesses and others to sponsor cultural events. 12