CM-07-01-001ROUND ROCK, TEXAS
PURPOSE. PASSION. PROSPERITY.
Mayor
NyleMaxwell
MayorPro-tem
Alan McGraw
Council Members
RufusHoneycutt
JoeClifford
CarlosT Salinas
Scott Rhode
Ted William son
City Manager
JamesR.Nuse, PE
City Attorney
StephanL Sheets
January 2, 2006
John T. Maldonado
U.S. Department of Housing and Urban Development
San Antonio Field Office, Region VI
Office of Community Planning and Development
106 S. St. Mary's, Suite 405
San Antonio, Texas 78205
RE: Request for Waiver for Senior Center
Dear Mr. Maldonado:
Please accept this letter in response to your letter of December 5, 2006 regarding
the City of Round Rock's request for a waiver of the CDBG regulations at 24 CFR
570.505.
After careful consideration of your letter and the needs of the citizens of Round
Rock, we have determined that it would not be in the City's best interest to use this
property as a park for the indefinite future. Therefore, in accordance with the above
mentioned regulations, the City of Round Rock proposes to reimburse the CDBG
account. In anticipation of this, we have had an appraisal performed which
establishes the appropriate reimbursement to be the sum of $34,506. I am enclosing
a copy of the appraisal for your review and comment.
Please review the appraisal at your convenience and let me know if you have a
problem with the proposed reimbursement amount.
Sincerely,
R. Nuse, P.E.
anager
C'
eq -01 -OD I
CITY OFROUND ROCK ADrnuisTa>race. DEPT_, 1EastMainStreet•RoundRock,Texas78664
Phone: ;is.zi8.,4oi•Fax-Si?_zifi7o97•www roundrocktexas.gov
PAUL HORNSBY & COMPANY
REAL PROPERTY APPRAISERS AND CONSULTANTS
June 23, 2006
City of Round Rock
c/o Steve Sheets
Sheets & Crossfield, P.C.
309 E. Main Street
Round Rock, Texas 78664-5246
Re: Appraisal services relating to a ±7,559 SF building located at 205 E. Main Street in Round
Rock, Williamson County, Texas.
Property Owner: City of Round Rock
WCAD Property ID: R071305 (portion of)
Pursuant to your request, we have undertaken an appraisal of the above -referenced property, the
conclusions of which are set forth in this summary appraisal report. This report is intended to
comply with the reporting requirements set forth under Standards Rule 2-2(b) of the Uniform
Standards of Professional Appraisal Practice (USPAP) for a summary appraisal report. As such, it
presents only summary discussions of the data, reasoning, and analyses that were used in the
appraisal process to develop our opinion of value. Detailed supporting documentation concerning
the data, reasoning, and analyses is retained in our file. The depth of discussion contained in this
report is specific to the needs of the client and for the intended use stated below. We are not
responsible for unauthorized use of this report.
Based upon the data and analyses summarized in this report, it is our opinion that the total
reimbursement to the HUD Community Development Block Grant (CDBG) program, as of June 15,
2006, was approximately as follows:
R'imbcn>Aromant zsdmata
Market Value of Subject:
$490,000
Market Value, not attributable to CDBG
Funding ($490,000 - $34,546):
$455,454
Estimated Reimbursement
$34,546
The value opinions are predicated on the assumptions and limiting conditions listed in this report.
8303 N Mopac Expressway Suite A-150 • Austin, Texas 78759 • 512/477-6311 • Fax 512/477-1793
Orn. ODI
We certify that, to the best of our knowledge and belief:
The statements of fact contained in this report are true and correct.
The reported analyses, opinions, and conclusions are limited only by the reported
assumptions and limiting conditions, and are our personal, impartial and unbiased
professional analyses, opinions, and conclusions.
We have no present or prospective interest in the property that is the subject of this report,
and no personal interest with respect to the parties involved.
We have no bias with respect to the property that is the subject of this report or to the parties
involved with this assignment.
Our engagement in this assignment was not contingent upon developing or reporting
predetermined results.
Our compensation for completing this assignment is not contingent upon the development
or reporting of a predetermined value or direction in value that favors the cause of the client,
the amount of the value opinion, the attainment of a stipulated result, or the occurrence of
a subsequent event directly related to the intended use of this appraisal.
Our analyses, opinions, and conclusions were developed, and this report has been prepared,
in conformity with the Code of Professional Ethics and Standards of Professional Appraisal
Practice of the Appraisal Institute, which include the Uniform Standards of Professional
Appraisal Practice, and the Canons of Professional Ethics and Conduct of the Texas Real
Estate Commission.
Paul Hornsby and Jason Lee have made a personal inspection of the property that is the
subject of this report.
As of the date of this report, I, Paul Homsby, have completed the continuing education
program of the Appraisal Institute.
No one provided significant real property appraisal assistance to the undersigned.
The use of this report is subject to the requirements of the Appraisal Institute relating to
review by its duly authorized representatives.
This transmittal letter and the following pages constitute our report which contains the data and
analyses utilized in formulating these opinions. If you should have any questions conceming this
report, please do not hesitate to contact the undersigned.
ii
Respectfully Submitted,
PAUL HORNSBY & COMPANY
Paul Homsby MAI, SRA, CRE Jason Lee
Certified App. #TX -1321761-G Certified App_ #TX -13318 41-G
iii
TABLE QF CONTENTS
Page No.
Letter of Transmittal with Certification
Table of Contents iv
Ordinary Assumptions v
Limiting Conditions vi
DESCRIPTIONS AND ANALYSES
Subject Identification 1
Legal Description 1
Purpose and Intended Use of the Appraisal 1
Definition of Market Value 1
Appraisal, Inspection, and Report Dates 2
Scope of Work 2
Ownership History and Ad Valorem Taxes 3
Site Analysis 4
Description of Improvements 4
Highest and Best Use 5
VALUATION
Sales Comparison Approach 6
Reimbursement Conclusion 7
OUALIFICATIONS
Qualifications of Paul Hornsby, MAI, SRA, CRE 8
Qualifications of Jason Lee 10
ADDENDA
Subject Documents
iv
ORDINARY ASSUMPTIONS
This appraisal is subject to the following ordinary assumptions:
1. It is assumed that there are no easements or encroachments unless noted within the
report.
2. It is assumed that there will be no substantial change in tax or insurance rates which
could affect the cash position of the property.
3. It is assumed that there are no hidden or unapparent conditions of the property, sub-
soils, or structures which would render them more or less valuable. No responsibility
is assumed for such conditions or for engineering which may be required to discover
such factors.
4. It is assumed that all necessary permits have been obtained and that there has been full
compliance with all applicable federal, state, and local environmental regulations and
laws unless non-compliance is stated, defined, and considered in the appraisal report.
5. It is assumed that all applicable zoning and use regulations and restrictions are
complied with, unless a nonconformity has been stated, defined, and considered in the
appraisal report.
6. It is assumed that the economy of the subject's market area will remain at
approximately current levels for the near term. Furthermore, it is assumed that market
conditions will prove consistent with those projected herein.
7. Unless otherwise stated in this report, the existence of hazardous material, which may
or 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.
8. It is assumed that the property is free of any endangered species, their habitat, or any
geological formation (i.e. caves) which might preclude development or otherwise affect
the value of the property. No responsibility is assumed regarding the presence or
absence of such features and the client is urged to retain an expert in these fields, if
desired, as the appraiser is not qualified to discover such conditions.
v
LIMITING CONDITIONS
This appraisal is subject to the following limiting conditions:
The legal description furnished our firm is assumed to be correct. We assume no responsibility for
matters legal in character, nor render any opinion as to the title, which is assumed to be good. The
property has been appraised as if under responsible ownership and competent management.
We have made no survey and assume no responsibility in connection with such matters. The firm
believes that the information contained in this report is reliable, but assumes no responsibility for
its accuracy. The construction and condition of the improvements mentioned in the body of this
report are based on observation and no engineering study has been made which could discover any
possible latent defects. No certification as to any of the physical aspects could be given unless a
proper engineering study is made.
We are not required to give testimony or attendance in court by reason of this appraisal with
reference to the property in question, unless arrangements have been made previously therefore.
Possession of this report or a copy thereof does not carry with it the right of publication. It may not
be used for any purpose by anyone other than the addressee without the previous written consent of
the appraiser.
Neither all nor any part of the contents of this report shall be conveyed to the public through
advertising, public relations, news, sales, or other media without the written consent and approval
of the author, particularly as to valuation and conclusions, the identity of the appraiser or firm with
which he is connected, or any reference to the Appraisal Institute, the SRA or the MAI designation.
The appraisers' liability regarding the statements and conclusions reported herein is limited to the
fee charged for the assignment.
vi
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DESCRIPTIONS AND ANALYSES
Subject Identification:
Legal Description:
Purpose of the Appraisal:
Intended Use of the Appraisal:
Definition of Market Value:
1
A±7,559 SF building located at 205 E. Main Street in
Round Rock, Williamson County, Texas. The subject
building is currently not occupied but was most
recently used as the Round Rock Senior Community
Center. Prior to this use, the building was utilized as
a bank.
Lots 13-16, Block 10, Original Town of Round Rock,
Williamson County, Texas.
To estimate any monetary reimbursement from the
City of Round Rock to the HUD CDBG program
associated with this program's funding of repairs to
the subject property. To this end, we estimated: 1) the
market value of the subject property; and, 2) the
market value of the subject property less any portion
of that value not attributable to HUD CDBG funding
as of June 15, 2006, the date of inspection.
The intended use of this appraisal is to assist the
client, the City of Round Rock, in establishing any
potential monetary reimbursement to the HUD
CDBG. Intended users are the client and its counsel.
"Market Value means 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 and
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:
(1) buyer and seller are typically motivated;
(2) both parties are well informed or well advised,
and acting in what they consider their best
interests;
(3) a reasonable time is allowed for exposure in
the open market;
Definition of Market Value (cont):
Effective Date of Value:
Date of Inspection:
Date of Report:
Scope of Work:
2
(4) payment is made in terms of cash in United
States dollars or in terms of financial
arrangements comparable thereto; and
(5) the price represents the normal consideration
for the property sold unaffected by special or
creative financing or sales concessions granted
by anyone associated with the sale."
June 15, 2006
June 15, 2006
June 23, 2006
As mentioned, the sole purpose of this appraisal is to
estimate any monetary reimbursement from the City
of Round Rock to the HUD CDBG program
associated with this program's funding of repairs to
the subject property. As such, a less extensive scope
of work was necessary than for most other appraisal
assignments wherein the market value of the property
is the primary purpose. Our scope of work for this
appraisal consisted of the following:
• Inspection of exterior and interior of improvements,
and inspection of the site;
• Inspection of neighborhood;
• Review of plat, tax, zoning, aerials, and flood plain
records;
• Consideration of Three Approaches - The three
traditional valuation techniques were considered to
estimate the value of the subject property. Only the
Sales Comparison Approach was utilized, as the Cost
Approach and the Income Capitalization Approach
were not applicable given the older construction age
of the building and tendency of the building to be
owner -occupied.
`The Appraisal Foundation, Uniform Standards of Professional Appraisal Practice, 2002 Edition, (The Appraisal Foundation, 2002), pg. 219.
Scope of Work (cont.):
Ownership History:
Ad Valorem Taxes:
3
• Application of the Sales Comparison Approach, in
which we researched improved sales, pending sales,
and listings for buildings in downtown Round Rock
that were currently used or marketed for commercial
purposes, or had such future use potential. We
researched CoStar, MLS data, and in-house data files.
The time frame for sale data was from 2001 through
the effective date of the appraisal, June 15, 2006. The
geographical search consisted of Williamson County
with particular emphasis on the downtown Round
Rock area The sale comparables were inspected
from perimeter roadways and data was confirmed
with parties directly involved with the transactions
(buyer, seller, broker);
• Reimbursement to the HUD CDBG program was
estimated by estimating the market value of the
subject property, less the estimated portion of that
market value not attributable to CDBG funding.
The owner of record is the City of Round Rock,
which appears to have had title for the last several
years. To our knowledge, there have been no
conveyances of the fee title within the last five years,
and no sales, offers to sell or purchase, or options
have occurred within the last three years.
The subject is aportion of a larger parcel identified as
R071305. The subject's estimated portion 'Attie 2006
assessed value is $583,880. The 2006 tax rate has not
been set; the tax rate in 2005 was $2.724118 per $100
of assessed valuation. However, the subject property
is currently exempt from taxation given its ownership
by a governmental municipality.
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Site Analysis:
Improvement Description:
Condition of improvements:
Functional Utility:
4
This subject site is approximately ±0.3719 acre or
16,200 SF in size. It is rectangular is shape with
approximately 120' of frontage along the south line of
E. Main Street. The topography is level and none of
the site is located within the 100 -year flood plain. It
is zoned "C-1, General Commercial"; the purpose of
this zoning designation is to establish and preserve
areas of medium intensity land use primarily devoted
to general commercial activities. All utilities are
available and to the site. No adverse easements or
encroachments are known to exist. Surrounding land
uses are a combination of older/historical buildings
for commercial use and new municipal and
professional office construction.
The subject is at7,559 SF single -story, wood -framed
building with stone veneer on a slab -on -grade
foundation. Originally constructed in 1%0, the
building has subsequently been renovated and added -
on to several times. Interior finish consists of painted
and textured gypsum walls with some areas of
exposed masonry. Ceilings are suspended metal grids
with primarily 2'x2' acoustic tiles. Ceiling heights are
primarily 9', with a small area near the main entry
extending to a 10' height Lighting is 2'x4' fluorescent
and spot incandescent. Flooring is vinyl throughout.
The roof is flat, roll composition. Windows are single
panes in metal frames. Exterior doors are solid -core
metal and metal framed glass; interior doors are
hollow -core wood. The building has central heating
and air conditioning (mounted on roof). In addition,
a kitchen area is located in the rear of the building and
a bank vault is situated near the front of the building.
The subject building is considered to be in poor
condition with numerous items of deferred
maintenance, most notably damaged floors and walls,
cracking in the stone veneer, and water damage to
walls in the kitchen area.
In its current state, the subject building is not
considered functionally adequate for commercial use.
However, with renovation and retrofitting adequate
functional utility can be restored.
Highest gad Best Use
As if Vacant:
As Improved:
5
Office development in accordance with the C-1
zoning designation.
Our research of several land sales with C-1 zoning in
the downtown Round Rock area, suggests that the
value of the subject property as improved is
significantly greater than its value as a vacant site.
However, significant modification to the structure for
commercial use would most likely be anticipated by
a potential investor in the subject property.
Accordingly, the highest and best use of the subject
property is to modify the existing structure as needed
to accommodate office use.
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6
SALES COMPARISON APPROACH
Sales
Sale #
1
Address
Date of
Sale
Size
(SF)
Year
Built
Condition
at Sale
Sale
Price
114 E. Main St.
(Round Rock)
9/29/04
1,584
2
100 E. Main St.
(Round Rock)
12/17/03
4,800
Unknown
(early
1900's)
1876
Below -
Average
to Poor
$140,000
Sale
Price/SF
$88.38
Good
$535,000
$111.46
3
108-110 E. Main St.
(Round Rock)
8/19/03
4,500
1900
Good
$540,000
$120.00
4
309 W. Main Street
(Round Rock)
6/24/01
6,244
1950
Poor
$320,000
$51.25
Subject
205 E. Main Street
(Round Rock)
6/15/06
(effective)
7,559
1960
Poor
NA
NA
In analyzing and comparing the market data to the subject property, primary consideration was given
to such items as conditions of sale, market conditions at time of sale, location, and physical
characteristics such as design/appeal, quality of construction, and age/condition of improvements.
Sale #1 was reportedly in below-average to poor condition at its time of sale. According to the
buyer, this building is being renovated for retail use at an estimated cost of $110,000. The buyer
estimated a cost of $20/SF had he retrofitted the space for office use.
Sales #2 and #3 reflect properties sold in good condition with little or no deferred maintenance.
While they transpired 2003 and are smaller than the subject property, their sales prices per square
foot are generally indicative of market value for downtown property ready for commercial use.
Sale #4 is generally similar to the subject in size and year of construction. Unlike the subject, it is
located on the west side of downtown and transpired five years prior our effective date. The prior
use of the building was as a mortuary/funeral home. According the buyer, approximately $700,000
was spent to renovate the building to an office use.
Recognizing the characteristics of the comparable sale properties, a market value below that of Sale
#1, #2 and #3, but higher than that of Sale #4 is most probable for the subject.
Recognizing the extent of renovation and retrofit required for the subject, the market value of the
subject property is estimated as follows:
lutik E.tima
Subject Size (SF):
Estimated Market Value Per SF:
Estimated Market Value:
7,559
$65.00
$491,335
Rounded to:
$490,000
7
As mentioned, the purpose of this appraisal is to estimate any monetary reimbursement from the City
of Round Rock to the HUD CDBG program. The reimbursement is directly associated with this
program's prior fielding of repairs to the subject property. Any reimbursement is equivalent to the
market value of the subject property, less any portion of that value not considered attributable to the
CDBG funding of repairs. The CDBG funded repairs on the subject property are as follows:
Recognizing the substantial renovation and retrofit necessary to modify the subject building to
accommodate office use, it is unlikely that a buyer of the subject would place any value on the
previous remodeling/alterations. As such, the only repair costs that increases the subject's value is
that associated with roofing and HVAC, which total $34,546. Therefore, our estimate of
reimbursement to the HUD CDBG program is as follows.
Market Value of Subject:
Market Value, not attributable to CDBG
Funding ($490,000 - $34,546):
$490,000
$455,454
Estimated Reimbursement:
$34,546
CDBG;Fundod Repaint
Description of Repair
Date of Repair
Cost
Cost as of 6/15/06
(per vendors)
Roof Materials
4/10/03
$466.13
$583
HVAC repair work
5/9/03
$2,300.00
$2,875
Remodel Bathrooms
9/12/03
$14,000.00
$18,900
Remodel Bathrooms
9/30/03
$10,820.00
$14,607
Remodeling and Alterations
3/19/03
$16,875.00
$22,781
Roof Repair
2/14/04
$24,870.00
$31,088
Total:
$69,331.13
$90,833
Recognizing the substantial renovation and retrofit necessary to modify the subject building to
accommodate office use, it is unlikely that a buyer of the subject would place any value on the
previous remodeling/alterations. As such, the only repair costs that increases the subject's value is
that associated with roofing and HVAC, which total $34,546. Therefore, our estimate of
reimbursement to the HUD CDBG program is as follows.
Market Value of Subject:
Market Value, not attributable to CDBG
Funding ($490,000 - $34,546):
$490,000
$455,454
Estimated Reimbursement:
$34,546
QUALIFICATIONS OF PAUL HORNSBY 1VIAL$RA, CRE
Educational Background
University of Texas at Austin, B.B.A. Degree in Finance, August 1977
Association Memberships & Activities
MAI Designation - Appraisal Institute, Certificate No. 7305
SRA Designation - Appraisal Institute
CRE Designation - The Counselors of Real Estate
Past President, Director and Regional Committee Member -Austin Chapter of the Appraisal
Institute
Screener, Appraisal Institute
Instructor, Appraisal Institute- Standards of Professional Appraisal Practice (Courses 400,
410, & 420)
Appraisal Qualifications Board (AQB) Certified USPAP Instructor
Texas Broker License #283369-05
State Certified General Real Estate Appraiser #TX -1321761-G
REALTOR - National Association of Realtors
Experience
Since 1980, Mr. Hornsby has been a practicing real estate appraiser in Austin, Texas. From
1986 to 1998, he owned and operated Southwest Property Consultants. In May of 1998, he
joined with Jim Frederick in the formation of Frederick & Hornsby, Inc. which specialized in
the valuation of complex commercial properties, and in support of litigation proceedings. The
firm now operates under the name Paul Hornsby and Company.
Mr. Hornsby often serves in the capacity of expert witness in cases involving eminent domain,
bankruptcy, civil litigation and ad valorem tax appeal. He is qualified as an appraisal expert in
various county district courts, Federal District Court, U.S. Bankruptcy Court, and various
commissioners courts and appraisal district review boards.
8
9
Lecteirefublicationa
In addition to expert testimony, Mr. Hornsby is often involved in public speaking. Lecture topics
and associated papers have included:
• Valuation Theory
Real Estate Symposium, University of Texas, 1984
• The Endangered Species Act and Its Impact on Property Value
Texas Savings and Loan League, 1989
• Asbestos Abatement and Lead Paint: Effects on Real Estate Value
Texas Association of Appraisal Districts, 1992
• The Schmidt Opinion From the Appraiser's Perspective
Office of the Attorney General, State of Texas, 1993
• Regulatory Takings
International Right of Way Association, 2000
• Fee Simple Versus Leased Fee Valuation: A Study of Appraisal Models
Downtown Austin Alliance, Institute of Real Estate Management, 2001
• Material and Substantial Impairment of Access
CLE International, 2005
10
QUALIFICATIONS OF JASON LEE
Educational Background
Austin College - Sherman, Texas
BA Degree in Business
Appraisal Institute:
Course 110 - Appraisal Principles
Course 120 - Appraisal Procedures
Course 310 - Income Capitalization
Course 510 - Advanced Income Capitalization
Course 520 - Highest & Best Use and Market Analysis
Course 530 - Advanced Sales Comparison & Cost Approaches
Course 540 - Report Writing & Valuation Analysis
Course 550 - Advanced Applications
Other Course Work:
Uniform Standards of Professional Appraisal Practice (15 -hour course)
Uniform Standards of Professional Appraisal Practice (7 -hour course)
Associption Memberships
State Certified General Real Estate Appraiser #TX -1331841-G
Associate Member - Appraisal Institute
Experience
1996 to Present, Senior Appraiser, Paul Hornsby & Company, 8303 N. MoPac Expressway,
Suite A-150, Austin, Texas 78757
ADDENDA
SUBJECT PHOTOGRAPHS
ubject, as seen from Main S
North elevation of subject, as seen from Main Street
s
b
o the left
Southern and Eastern elevations of subject, as seen from
the southeast portion of the site
Interior of subject building near the front entrance
Interior of subject building near the front entrance