87-124 AUTHORIZING SALE OF LAND 300 BLOCK WEST 1ST DRIVE

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Page 3� ' BUILDING IMPROVEMENT There are not building improvements on subject land. HIGHEST AND BEST USE Highest and best use is defined as "that reasonable and proper use that supports the highest present value, as defined, as of the effective date of the appraisal." Subject land currently has access only over and through other lands of Southtowne Shopping Center located to the North and Northeast of subject. There is no access onto U.S. Route 51 on the west of sub- ject and it is very questionable if this would be permitted. The City of Decatur owns the land to the south and it is possible that access could be made available from this direction. The existance of the underground drainage way and the eYisting water main, sewer, and electrical easement previously mentioned would appear to re- strict if not preclude construction of a building on subject. Subject is currently used for parking for several clients of the Southtowne Shopping Center and this would appear to be and continue to be the highest and best use. This would appear to be not only in the best interest of the owners and tenants of the shopping cen- ter but for the City of Decatur from sales tax revenue generated. VALUATION There are three normal approaches to value. They are: 1. COST APPROACH in which the cost of reproducing the improvements are estimated from which is deducted all forms of accrued de- preciation and then land value is added for the final estimate of value. 2. DIRECT SALES COMPARISON APPROACH or often called Market Approach in which properties which have sold in the market are compared with subject and appropriate adjustments made. 3. INCOME APPROACH in wnich the net income of the property is capitalized at a realistic rate into value. Since subject is not improved with a building or buildings the cost approach is not appropriate. The property is leased so the income approach is applicable and will be used. The direct sales compari- son approach is not felt to be appropriate as sales of similar pro- perties were not available when you reflect on the physical char- acteristics or (water way and access situation) and easements cur- rently affect subject property.