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HomeMy WebLinkAbout2018-28722018 -2872 Hos.l.r Appraisal & Consulting, Inc. July 31, 2018 Mr. Keith M. Dahl VIA EMAIL ONLY Community Development Manager City of Columbia Heights - Community Development Department 590 - 401h Avenue NE Columbia Heights, MN 55421 KDahi calumbiaheightsmn.gov RE: Engagement Letter for Real Estate Appraisal of the Public Safety Remnant Parcel Located at 825 - 418f Avenue Northeast in Columbia Heights, Minnesota Dear Mr. Dahl: Following our recent contact and your email requesting that we move forward, we are providing you with this engagement letter for appraisal services involving the above - captioned property to estimate its current market value. The intended use of the appraisal services is for internal decision - making and possible sale and the City of Columbia Heights will be the intended user. The City will also be our client and responsible for payment of all appraisal fees covered in this engagement letter. Scope of Assignment We anticipate handling the assignment within two phases, as follows: Phase I - Narrative Appraisal Report of Current Market Value As requested, Hosch Appraisal & Consulting, Inc. will review all documents to fully understand the entire property and fully document the property to become familiar with its general location and its immediate physical characteristics. Please refer to our information request outlined in Exhibit A (the last page) of this engagement letter for potential supplemental information we are looking for if not already provided. We will establish a foundation and value opinion of the 100% fee simple interest in the entire property as of the date of our inspection. Our appraisal will include a thorough highest and best use analysis, and will most likely utilize the sales comparison approach to value. Hosch Appraisal & Consulting, Inc. will further document the property, market research and data to prepare a narrative Appraisal Report that will be suitable to document our analysis and valuation. The written report would include a summary of all pertinent data considered within our analysis of the subject property. The report will comply with the Uniform Standards of Professional Appraisal Practice (USPAP) as well as the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. The report will be sent out to you in draft form electronically by email and can be finalized and sent out with signatures by email upon receiving authorization to do so and payment of the balance of the appraisal fee. 11172 Zealand Avenue North Minneapolis, MN 55316 Phone 6121331 -1688 Fax 7631208 -1670 www.hoschappraisal.com Mr. Keith M. Dahl July 31, 2018 Page Two Scooe of Assignment - Continued Phase ❑ - Potential Sale Consulting, Expanded Scones of Work and Additional Appraisal Reports (if Necessary) Expanded scopes of work, potential sale consulting, appraisal report hard copies and meetings will be provided on an as- needed basis only if authorized following completion of Phase I. Description of the Firm Hosch Appraisal & Consulting, Inc. is a real estate /business valuation and consulting firm that serves both public and private entities and individuals throughout the Midwest. Our geographic concentration is in the Upper Midwest; however, our services continue to expand throughout the country. Hosch Appraisal & Consulting, Inc. is dedicated to providing its clients with quality work prepared by an experienced staff of appraisers /analysts with a wide variety of expertise. This knowledge is achieved by incorporating extensive and continuous education with years of unique field experience. Technical Qualifications The most experienced of our staff have obtained the Certified General Real Property Appraiser license from the State of Minnesota, with reciprocity available in other states, and earned the top designation offered by the Appraisal Institute (MAI — designated member of the Appraisal Institute). Other staff appraisers are candidates for membership, as well as members of various associations. Litigation support is an area of specialty, with involvement in high - profile court cases and decisions throughout the Midwest. Some of our expert testimony experience includes preparation of affidavits, and appearances at depositions, arbitrations, commissioner hearings, district court trials, U.S. Bankruptcy Court trials and city council meetings. Mr. Keith M. Dahl July 31, 2018 Page Three Real Estate Valuation Expertise We offer a wide range of services to our clients with an ability to solve some of the most complex valuation problems that surface in the marketplace. Extensive experience includes, but is not necessarily limited to, the following functions: real estate litigation, eminent domain, inverse condemnation claims, special assessment benefits analyses, tax appeals, foreclosure, bankruptcy, mortgage financing, fair market rental analyses (land and building leases), purchase and sale consulting, investment counseling, charitable donations, gift tax, partial sale /gifting, estate planning and settlement, environmental contamination, construction defects, easements and encumbrances, title problems, development consulting, highest and best use, and assignment of financing (conventional and /or tax increment financing (TIF)). Staff members supplement their appraisal and consulting experience by serving as court- appointed commissioners and referees, speaking at various seminars and writing articles on valuation topics. Our geographic concentration has included over 10 states, with the ability to work in any state. Business Valuation Expertise Hosch Appraisal & Consulting, Inc. also offers business valuation services to our clients for a variety of purposes. Our experience includes, but is not necessarily limited to, the following functions: mortgage financing, consulting for purchase or sale, estate planning and settlement, litigation support, and internal decision - making. Staff members continue to expand their knowledge base through continuing education and ongoing contact with market participants. Special Qualifications Appraisal and consulting reports prepared for litigation purposes comprise a significant portion of our practice. Our experience includes assignments commissioned by clients who work within both the public and private sectors. Clients also include those who have become familiar with our work product when representing plaintiffs or defendants on an opposing side. Our analyses are well thought -out, supported, and therefore, well respected and received by attorneys and authoritative bodies. Mr. Keith M. Dahl July 31, 2018 Page Four Consulting and Appraisal Fee Structure Hosch Appraisal & Consulting, Inc. handles its accounts on an hourly basis. Our 2018 billing rates for this assignment range from $100 to $295 per hour. Due to the complex scope of work outlined above, it is difficult to provide a lump -sum fee quote at this time beyond completion of the Phase I narrative Appraisal Report. We keep detailed time sheets on each job and the information is available to our clients, if so desired. The goal is to use a team approach in order to maximize efficiency and match the tasks with the appropriate skills of various team members. Our discounted fee estimate for this assignment is as follows: Phase I - Completion of Narrative Appraisal Report of Current Market Value: $2,995* Phase II - Sale Consulting, Expanded Scopes of Work and Meetings (Only if Authorized After Completing Phase 1): Hourly* " Phase I includes preparation of an electronic appraisal report. Color hard copies are available at an additional charge, if requested. For Phase 11, all report hard copies, client meetings, expanded scopes of work and sale consulting are all billed in addition to the indicated fee quote on an hourly basis if we are asked to provide this additional work.. We ask that you pay a retainer of $1,500 to begin Phase I. The remaining portion will be invoiced upon completion of the work unless we are instructed to stop work prior to completion with payment due immediately upon receipt. We ask that your account be brought current before moving into additional phases and /or finalizing the draft report in Phase I with signatures. Compound monthly interest will be charged on all account balances unpaid after 30 days at 8 %. In the event that there is an order or agreement by a third party to pay or reimburse your fees, you will nonetheless remain directly obligated to us for the payment of the total fees and costs incurred on your behalf. This Agreement may be terminated by you for any reason upon providing written notice to us. Upon any termination of this Agreement, you agree to pay Hosch Appraisal & Consulting, Inc. in full for any expenses incurred and services performed by its appraisers and /or employees up to such time. Mr. Keith M. Dahl July 31, 2018 Page Five If this engagement letter is consistent with your expectations for appraisal services, please sign below and return this to us as an original engagement letter (a scanned copy emailed back to me is also acceptable) with a $1,500 retainer check mailed afterward which will then constitute formal authorization to begin working on the assignment. Our information request is provided as an enclosure to this letter labeled "Exhibit A" (the last page of the document) and may contain information which you have already provided. Please contact me if you wish to amend the scope of the assignment outlined above. Thank you for contacting us. If you have any questions or concerns or would like to discuss this matter further, please feel free to contact us at (612) 331 -1688. You can also visit our website at www.hoschappraisal.com. We look forward to the opportunity to be of service to you in order to bring this assignment to a successful conclusion. Sincerely, Hosch Appraisal & Consulting, Inc. Stephen T. Hosch, MAI President Enclosures Authorization to Proceed and Partv Responsible for Payment of all Appraisal. Fees City of Columbia Heights 0 xv, -, printed name: Wald P. rAif Its: Li Awa -e'' Date: VO/ 12-o 1,5Z APPRAISAL CONTRACT CONDITIONS 1, Hosch Appraisal & Consulting, Inc. warrants that the services will be performed in a professional manner, in accordance with established appraisal industry standards. The firm makes no further warranty of any kind, expressed or implied. 2. Disclosure of the contents of this appraisal report is governed by the bylaws and regulations of the professional appraisal organizations with which various appraisers in the firm are affiliated. These include the Appraisal Institute, The Institute of Business Appraisers, The American Society of Appraisers, and The American Society of Real Estate Counselors. 3. Hosch Appraisal & Consulting, Inc. will preserve the confidential nature of information received from the client, in accordance with established professional standards. The client agrees to preserve the confidential format and content of the appraisal report. The report and the appraiser's identity, are not to be used in whole or part, outside the client's organization, without prior written approval, except for review by auditors and legal counsel, and by the representatives of taxing authorities. 4. The persons authorizing the engagement on behalf of the client and Hosch Appraisal & Consulting, Inc. are empowered to do so. 5. The client agrees that Hosch Appraisal & Consulting, Inc. does not, either by entering into this contract, or by performing the services rendered, assume, abridge, abrogate, or undertake to discharge any duty of the client to any other entity. & Any use of the appraisal report, by the client, is conditioned upon payment of all fees in accordance with the agreed terms. 7. Appraisal fees are in no way contingent upon values concluded by Hosch Appraisal & Consulting, Inc. or any future event such as the securing of financing. 8. In consideration for performing the services rendered at the fee charged, Hosch Appraisal & Consulting, Inc. expressly limits its liability to five (5) times the amount of the fee paid or $50,000, whichever is less. 9. Hosch Appraisal & Consulting, Inc. expressly disclaims liability as an insurer or guarantor. Any persons seeking greater protection from loss or damage than is provided for herein, should obtain appropriate insurance. 10. Delivery schedules indicated by fee letters (unless otherwise stated), assume that: A) Written authorization and /or the retainer requested, will be received by a specified date, or in a timely manner; B) All supporting information to be provided by the client, will be readily available or provided in a timely manner; and C) The appraisers employed by Hosch Appraisal & Consulting, Inc. will be afforded ready access to the property to be appraised. 11. Fees quoted in the appraisal engagement letters are due and payable, regardless of whether or not the conclusions reached coincide with the client's expectations. 12. No opinion is intended to be expressed for matters that require legal or other specialized expertise, investigation or knowledge beyond that customarily employed by appraisers in the evaluation of real estate or businesses. 13. Unless specifically brought to the appraiser's attention, the appraiser will assume that there are no hidden or unexpected conditions of the asset to be appraised that would adversely affect or enhance the value. APPRAISAL CONTRACT CONDITIONS - CONTINUED 14. Hazardous substances, if present within a property, can introduce an actual or potential liability that will adversely affect the marketability and value of the property. Such liability may be in the form of immediate recognition of existing hazardous conditions, or future liability that could stem from the release of currently known hazardous contaminants. 15. In the development of the opinion of value, no consideration will be given to such liability, or its impact on value, unless Hosch Appraisal & Consulting, Inc. is specifically retained to perform or prepare an environmental or toxic contamination analysis. In the event that such a report is prepared by the appraiser, the client nonetheless, releases the appraiser from any and all future environmental liability. 1& In the future, if Hosch Appraisal & Consulting, Inc. is compelled to produce documents or testify with regard to work performed, the client shall reimburse appraiser for all costs and expenses incurred. 17. The client shall indemnify and hold harmless Hosch Appraisal & Consulting, Inc. and its employees, against all claims by any third party or any judgment for loss or damage relating to the performance or non - performance of any services by the appraisal firm. 18. In the event of a dispute involving interpretation or application of this agreement, the parties agree that this agreement shall be governed under the laws of the State of Minnesota. 19. Hosch Appraisal & Consulting, Inc. reserves the right to assess interest charges on all unpaid accounts as well as all attorney fees and costs to collect any outstanding amounts. 20. Hosch Appraisal & Consulting, Inc. reserves the right to refuse an assignment if the engagement letter is signed by a party other than the addressee of the letter. 21. Hosch Appraisal & Consulting, Inc. reserves the right to assess collection time incurred, if necessary, as well as all attorney fees and costs to enforce this engagement letter. 22. Liability for appraisal fees is the responsibility of the party signing the appraisal contract or the organization on whose behalf the individual is signing. 23. Hosch Appraisal & Consulting, Inc. and /or the appraisers are not qualified to render expert opinions regarding structural issues, water damage, environmental assessments (such as mold), engineering /mechanical issues, ADA and /or building code compliance, land planning, architectural expertise or soil conditions. If requested, Hosch Appraisal & Consulting, Inc. will recommend qualified experts in these fields to assist the client and /or the appraisal process. 24. In the event that there is an order or agreement by a third parry to pay or reimburse your fees, you will nonetheless remain directly obligated to us for the payment of the total fees and costs incurred on your behalf. This Agreement may be terminated by you for any reason upon providing written notice to us. Upon any termination of this Agreement, you agree to pay Hosch Appraisal & Consulting, Inc. in full for any expenses incurred and services performed by its appraisers and /or employees up to such time. EXHIBIT A INFORMATION REQUEST (AS APPLICABLE AND /OR AVAILABLE AS DISCUSSED) 1, Copies of any Conditional Use Permits (CUPs), variances or approvals by the City or County allowing any existing or proposed use of the property. 2. Any offers to purchase or listings to sell the property (oral or written) over the five years preceding the date of valuation. 3. Complete signed copies of any existing leases encumbering the property, including amendments. 4. Site survey and /or plat map identifying the entire site with land size. 5. Any existing title issues, easements and /or encumbrances affecting the property (current owners' and encumbrances report). 6. Any environmental studies or soil studies pertaining to the property. 7. Summary of improvements /buildings on site (age /size, etc.) 8. Any concept plans for development of the property to its highest and best use (multiple scenarios may be possible). 9. Any other information that may be helpful in understanding the property to be appraised.