Common use of Land Valuation Clause in Contracts

Land Valuation. The subject land is valued by the Sales Comparison Approach. This approach employs the principal of substitution, whereby willing buyers would typically pay no more for a property than what could be found as a substitute property within a reasonable period of time. This approach compares sales or capitalized leases of vacant land relatively similar to the subject, or at least bracketing the subject, as superior or inferior, on a price per unit basis. Since there are no two properties alike, some adjustments or ranking of the comparable sales will be performed. Following is a summary of the comparable sales or capitalized leases used in developing a market value estimate for the subject property. 10137 1 Lots 11 and 12, Blk 38, ST 08/16 $188,700 10,000 $18.87/SF 10135 2 Lot 10, Blk 34, ST 10/16 $232,500 5,000 $46.50/SF 10750 3 M&M Brokerage Lse- Congress Way 01/18 $38,000* 2,000 $19.00/SF 10434 4 Tax Lot 5A, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ – Congress Way 01/18 $25,600** 1,600 $16.00/SF ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ ▇▇▇; ATS 4, Tax ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ Cafe Lease 05/13 $110,000** 5,500 $20.00/SF Subject 05/18 Solve 5,400 Solve 18-032 / Skagway Fish Co. Land Lease Update Comparable 1 is the 2016 sale of a much larger property. This property was zoned BG and further from the main tourist core on State Street. Due to the distance from the core as well as the larger lot size, this would be ranked inferior to the subject on a price per square foot basis. Comparable 2 is the late 2016 sale of a 5,000 SF BH zoned lot just one lot west of Broadway on 2nd Ave. It was purchased by the adjacent property owner for expansion, etc. It is similar in size. It is superior in zoning and has less restrictive use parameters. There also may have been a premium paid by the adjacent property owner. It is ranked superior on a square foot basis. Comparable 3 is the capitalized lease of the estimated land portion of the M&M Tour Broker site located towards the cruise ship dock at the head of the sea walk. It is ranked slightly inferior since the site is limited to a specific use. It is in a more congested area and the more industrial petro marine lease is located directly behind it. It is ranked inferior on a unit basis. storage facility and is also considered inferior in that respect. It is considered due to its location and zoning. For ranking purposes on price /SF basis, it is considered inferior to the subject. purposes on price /SF basis, it is considered inferior primarily due to the age of the lease. 18-032 / Skagway Fish Co. Land Lease Update 13 | Page 2 ▇▇/▇▇ ▇▇▇ ▇▇▇; West of Broadway $47.00/SF Superior Subject 03/18 Subject Solve Similar 5 11/13 Stowaway Cafe (older lease) $20.00/SF Inferior 3 01/18 M&M Brokerage $19.00/SF Inferior 1 08/16 Lots 11 and 12, Blk 38 $18.87/SF Inferior 4 01/18 Portion ATS 4, Tax Lot 5A, Petro Lease $16.00/SF Inferior Four of the five comparables are ranked at least slightly inferior for various reasons described. Strong consideration is given to Comp 2 which is a sale of a similar sized lot. It is ranked superior for reasons noted, however it helps to substantiate the subject value at a slightly higher SF value than the inferior comparables indicate. Comparable 5 is most similar, but is an older lease that needs updated and is, therefore, considered inferior. The estimated value of $22/SF is slightly below the average of all the transactions. The value can be summarized as follows: 18-032 / Skagway Fish Co. Land Lease Update PHOTO 1 - Looking approximately southeast across property from seawalk (031418_1743) ATTACHMENT A Graduated from Pennsylvania State University, B.S./B.L.A. in Landscape Architecture, 1977 Appraiser, ▇▇▇▇▇ & Company, LLC, 08/04-Present Appraiser, ▇▇▇▇▇, ▇▇▇▇▇ & Company, formerly Pomtier, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, 03/87-07/04 Appraiser, Pomtier, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, 1986-1987 Associate Planner, City and Borough of Sitka, Alaska 1985-1986 Landscape Architect, U.S. Forest Service, Sitka, Alaska, 1983-1985 Landscape Architect, GWSM Inc., Pittsburgh, PA, 1977-1983 State of Alaska, General Real Estate Appraiser, APRG618 AIREA Residential Valuation, May 1989, Portland, Oregon AIREA Residential Case Studies and Report Writing, May 1989, Portland, Oregon AIREA Standards of Professional Practice, October 1987, Anchorage, Alaska FNMA Appraisal Guidelines Seminar, July, 1987 FNMA Appraisal Guidelines Seminar, July, 1988 Veterans Administration Guidelines Seminar, February, 1988 AIREA Real Estate Appraisal Principals, October 1988 Traverse City, Michigan Residential Demo - Appraisal Report Writing, Northern California Chapter, August 1992 Feasibility Analysis - Highest and Best Use, Alaska Chapter, November 92 Appraising the Tough Ones, Alaska Chapter, November 1992 Standards of Professional Practice - Part A, Alaska Chapter, January 1993 Standards of Professional Practice - Part B, Alaska Chapter, January 1993 New URAR Seminar, Anchorage, Alaska, December 1993 Valuation of Leasehold Interests, Anchorage, Alaska, December 1993 Understanding Limited Appraisals, Anchorage, Alaska, July 1994 Appraisal Institute, Appraisal Procedures, Pittsburgh, Pennsylvania, February, 1995 The Internet and the Appraiser, May 1996, Seattle, Washington HighTech Appraisal Office, May 1996, Seattle, Washington Dynamics of Office Bldg. Valuation, October 1996, Anchorage, Alaska Appraisal of Retail Properties, October 1996, Anchorage, Alaska Standards of Professional Practice - Part B, April 1997, Seattle, Washington Basic Income Capitalization, March 1998, Chapel Hill, North Carolina Standards of Professional Practice - Part C, 1998, Edmonds, Washington FHA Training Seminar, October 1999, Seattle, Washington FHA Seminar, August 2000, Anchorage, Alaska FHA Appraisal Inspection From the Ground Up, June 2000, Anchorage, Alaska Undivided Partial Interest Valuation/Divided Partial Interest Valuation, May 2001, Anchorage Technical Inspection of Real Estate, April 2003, Anchorage, Alaska Code of Professional Ethics/Scope of Work, April 2003, Anchorage, Alaska Uniform Appraisal Standards for Federal Land Acquisitions (UASFLA), Jan 2004, Philadelphia, PA Rates and Ratios:Making Sense of GIMs, OARs and DCF, Feb 2005, Anchorage, AK USPAP Update; Uniform Standards of Professional Appraisal Practice, Feb 2005, Anchorage, AK USPAP 15 Hr; Uniform Standards of Professional Appraisal Practice, April 2006, Sacramento, CA Basic Income Capitalization 310, July 2006, San Diego, CA General Applications 320, July 2006, San Diego, CA Subdivision Valuation, February 2008, Anchorage, AK Appraisal of Local Retail Properties, February 2008, Anchorage, AK USPAP 7 hr Update; Uniform Standards of Professional Appraisal Practice, June 2009, Juneau, AK Home Valuation Code of Conduct & 1004 Market Conditions Form Seminar, June 2009, Juneau, AK Business Practices and Ethics, November 2009, Online Real Estate Appraisal Operations, February 2010, Online USPAP 7 hr Update; Uniform Standards of Professional Appraisal Practice, February 2010, Kent, WA Uniform Appraisal Standards for Federal Land Acquisitions (UASFLA), Dec 2010, Sacramento, CA Fundamentals of Separating Real Property, Personal Property and Intangible Business Assets, April 2012, Portland, OR Appraising the Appraisal - Appraisal Review - General, September 2012, Reno, NV USPAP 7 hr Update; Uniform Standards of Professional Appraisal Practice, February 2013, Pittsburgh, PA USPAP 7 hr Update; Uniform Standards of Professional Appraisal Practice, April 2014, Juneau, AK Real Estate Finance Statistics and Valuation Modeling; February 2015, Las Vegas, NV Supervisory Appraiser/Trainee Appraiser Course; April, 2015Anchorage, AK USPAP 7 hr Update; Uniform Standards of Professional Appraisal Practice, January 2017, Online Analyzing Operating Expenses, February 2017, Online Uniform Appraisal Standards for Federal Land Acquisitions (UASFLA), May 2017, Seattle, WA Using Spreadsheet Programs in Real Estate Appraisals – The Basics, December, 2017 Online Residential - Single family residences, duplexes, tri-plexes, four-plexes, mobile homes, and vacant land Commercial - Warehouses, vacant tracts, islands, office buildings, remote sites, hangars, tidelands, retail buildings, apartments, industrial complexes, market data and research

Land Valuation. The subject land is valued by the Sales Comparison Approach. This approach employs the principal of substitution, whereby willing buyers would typically pay no more for a property than what could be found as a substitute property within a reasonable period of time. This approach compares sales or capitalized leases of vacant land relatively similar to the subject, or at least bracketing the subject, as superior or inferior, on a price per unit basis. Since there are no two properties alike, some adjustments or ranking of the comparable sales will be performed. Following is a summary of the comparable sales or capitalized leases used in developing a market value estimate for the subject property. TABLE 4.1 - COMPARABLE SALES AND CAPITALIZED LEASES TABLE 10137 1 Lots 11 and 12, Blk 38▇▇▇ ▇▇, ST 08/16 ▇▇ ▇▇/▇▇ $188,700 10,000 $18.87/SF 10135 2 Lot 10▇▇▇ ▇▇, Blk 34▇▇▇ ▇▇, ST 10/16 $232,500 5,000 $46.50/SF 10750 3 M&M Brokerage Lse- Congress Way 01/18 $38,000* 2,000 $19.00/SF 10434 4 Tax Lot 5A, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ Petro Marine Lse – Congress Way 01/18 $25,600** 1,600 $16.00/SF ▇▇▇▇ 10752 ▇ ▇▇▇▇▇▇▇▇ ▇▇▇; ATS 4, Tax ▇▇▇ ▇▇Lot 5C, ▇▇▇▇▇▇▇▇ Cafe Skagway Fish Company Lease 05/13 11/13 $110,000108,000** 5,500 5,400 $20.00/SF Subject 05/18 03/18 Solve 5,400 5,500 Solve 18-032 035 / Skagway Fish Co. Stowaway Land Lease Update 11 | P a g e Comparable 1 is the 2016 sale of a much larger property. This property was zoned BG and further from the main tourist core on State Street. Due to the distance from the core as well as the larger lot size, this would be ranked inferior to the subject on a price per square foot basis. Comparable 2 is the late 2016 sale of a 5,000 SF BH zoned lot just one lot west of Broadway on 2nd Ave. It was purchased by the adjacent property owner for expansion, etc. It is similar in size. It is superior in zoning and has less restrictive use parameters. There also may have been a premium paid by the adjacent property owner. It is ranked superior on a square foot basis. Comparable 3 is the capitalized lease of the estimated land portion of the M&M Tour Broker site located towards the cruise ship dock at the head of the sea walk. It is ranked slightly inferior since the site is limited to a specific use. It is in a more congested area and the more industrial petro marine lease is located directly behind it. It is ranked inferior on a unit basis. storage facility and is also considered inferior in that respect. It is considered due to its location and zoning. For ranking purposes on price /SF basis, it is considered inferior to the subject. due to the age of the lease. location and comparable in size. For ranking purposes on price /SF basis, it is considered inferior primarily due to the age of the lease. 18-032 035 / Skagway Fish Co. Stowaway Land Lease Update 13 12 | Page P a g e TABLE 4.2 - COMPARABLE SALES RANKING GRID 2 ▇▇/▇▇ ▇▇▇ ▇▇▇; West of Broadway ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ $47.00/SF Superior Subject 03/18 Subject Solve Similar 5 11/13 Stowaway Cafe Skagway Fish (older lease) $20.00/SF Inferior 3 01/18 M&M Brokerage $19.00/SF Inferior 1 08/16 Lots 11 and 12, Blk 38 ▇▇▇ ▇▇ $18.87/SF Inferior 4 01/18 Portion ATS 4, Tax Lot 5A, Petro Lease $16.00/SF Inferior Four of the five comparables are ranked at least slightly inferior for various reasons described. Strong consideration is given to Comp 2 which is a sale of a similar sized lot. It is ranked superior for reasons noted, however it helps to substantiate the subject value at a slightly higher SF value than the inferior comparables indicate. Comparable 5 is most similar, but is an older lease that needs updated and is, therefore, considered inferior. The estimated value of $22/SF is slightly below the average of all the transactions. The value can be summarized as follows: 18▇▇-032 ▇▇▇ / Skagway Fish Co. Land ▇▇▇▇▇▇▇▇ ▇▇▇▇ Lease Update 13 | P a g e ADDENDA PHOTO 1 - – Looking NE onto subject property from sea walk. (031418_1744) PHOTO 2 – Looking approximately southeast SE across property from seawalk sea walk. (031418_1743031418_1745) ATTACHMENT A PHOTO 3 – Looking SW across subject property from Congress Way. (031418_1746) Graduated from Pennsylvania State University, B.S./B.L.A. in Landscape Architecture, 1977 Appraiser, ▇▇▇▇▇ & Company, LLC, 08/04-Present Appraiser, ▇▇▇▇▇, ▇▇▇▇▇ & Company, formerly Pomtier, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, 03/87-07/04 Appraiser, Pomtier, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, 1986-1987 Associate Planner, City and Borough of Sitka, Alaska 1985-1986 Landscape Architect, U.S. Forest Service▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Sitka▇▇▇▇▇, Alaska▇▇▇▇▇▇, 1983▇▇▇▇-1985 ▇▇▇▇ Landscape Architect, GWSM Inc.▇▇▇▇ ▇▇▇., Pittsburgh▇▇▇▇▇▇▇▇▇▇, PA▇▇, 1977▇▇▇▇-1983 ▇▇▇▇ State of Alaska, General Real Estate Appraiser, APRG618 AIREA Residential Valuation, May 1989▇▇▇▇, Portland▇▇▇▇▇▇▇▇, Oregon ▇▇▇▇▇▇ AIREA Residential Case Studies and Report Writing, May 1989▇▇▇▇, Portland▇▇▇▇▇▇▇▇, Oregon ▇▇▇▇▇▇ AIREA Standards of Professional Practice, October 1987, Anchorage, Alaska FNMA Appraisal Guidelines Seminar, July, 1987 FNMA Appraisal Guidelines Seminar, July, 1988 Veterans Administration Guidelines Seminar, February, 1988 AIREA Real Estate Appraisal Principals, October 1988 Traverse City▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, Michigan ▇▇▇▇▇▇▇▇ Residential Demo - Appraisal Report Writing, Northern California Chapter, August 1992 Feasibility Analysis - Highest and Best Use, Alaska Chapter, November 92 Appraising the Tough Ones, Alaska Chapter, November 1992 Standards of Professional Practice - Part A, Alaska Chapter, January 1993 Standards of Professional Practice - Part B, Alaska Chapter, January 1993 New URAR Seminar▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, Anchorage▇▇▇▇▇▇▇▇▇, Alaska▇▇▇▇▇▇, December 1993 Valuation of Leasehold Interests, Anchorage, Alaska, December 1993 Understanding Limited Appraisals, Anchorage, Alaska, July 1994 Appraisal Institute, Appraisal Procedures, Pittsburgh, Pennsylvania, February, 1995 The Internet and the Appraiser, May 1996, Seattle, Washington HighTech Appraisal Office, May 1996, Seattle, Washington Dynamics of Office Bldg. Valuation, October 1996, Anchorage, Alaska Appraisal of Retail Properties, October 1996, Anchorage, Alaska Standards of Professional Practice - Part B, April 1997, Seattle, Washington Basic Income Capitalization, March 1998, Chapel Hill, North Carolina Standards of Professional Practice - Part C, 1998, Edmonds, Washington FHA Training Seminar, October 1999▇▇▇▇, Seattle▇▇▇▇▇▇▇, Washington ▇▇▇▇▇▇▇▇▇▇ FHA Seminar, August 2000, Anchorage, Alaska FHA Appraisal Inspection From the Ground Up, June 2000, Anchorage, Alaska Undivided Partial Interest Valuation/Divided Partial Interest Valuation, May 2001, Anchorage Technical Inspection of Real Estate, April 2003, Anchorage, Alaska Code of Professional Ethics/Scope of Work, April 2003▇▇▇▇, Anchorage▇▇▇▇▇▇▇▇▇, Alaska ▇▇▇▇▇▇ Uniform Appraisal Standards for Federal Land Acquisitions (UASFLA), Jan 2004, Philadelphia, PA Rates and Ratios:Making Sense of GIMs, OARs and DCF, Feb 2005▇▇▇▇, Anchorage▇▇▇▇▇▇▇▇▇, AK ▇▇ USPAP Update; Uniform Standards of Professional Appraisal Practice, Feb 2005, Anchorage, AK USPAP 15 Hr; Uniform Standards of Professional Appraisal Practice, April 2006, Sacramento, CA Basic Income Capitalization 310, July 2006▇▇▇▇, San Diego▇▇▇ ▇▇▇▇▇, CA ▇▇ General Applications 320, July 2006▇▇▇▇, San Diego▇▇▇ ▇▇▇▇▇, CA ▇▇ Subdivision Valuation, February 2008▇▇▇▇, Anchorage▇▇▇▇▇▇▇▇▇, AK ▇▇ Appraisal of Local Retail Properties, February 2008, Anchorage, AK USPAP 7 hr Update; Uniform Standards of Professional Appraisal Practice, June 2009, Juneau, AK Home Valuation Code of Conduct & 1004 Market Conditions Form Seminar, June 2009, Juneau, AK Business Practices and Ethics, November 2009, Online Real Estate Appraisal Operations, February 2010, Online USPAP 7 hr Update; Uniform Standards of Professional Appraisal Practice, February 2010, Kent, WA Uniform Appraisal Standards for Federal Land Acquisitions (UASFLA), Dec 2010, Sacramento, CA Fundamentals of Separating Real Property, Personal Property and Intangible Business Assets, April 2012, Portland, OR Appraising the Appraisal - Appraisal Review - General, September 2012, Reno, NV USPAP 7 hr Update; Uniform Standards of Professional Appraisal Practice, February 2013, Pittsburgh, PA USPAP 7 hr Update; Uniform Standards of Professional Appraisal Practice, April 2014, Juneau, AK Real Estate Finance Statistics and Valuation Modeling; February 2015▇▇▇▇, Las Vegas▇▇▇ ▇▇▇▇▇, NV ▇▇ Supervisory Appraiser/Trainee Appraiser Course; April, 2015Anchorage, AK USPAP 7 hr Update; Uniform Standards of Professional Appraisal Practice, January 2017, Online Analyzing Operating Expenses, February 2017, Online Uniform Appraisal Standards for Federal Land Acquisitions (UASFLA), May 2017▇▇▇▇, Seattle▇▇▇▇▇▇▇, WA ▇▇ Using Spreadsheet Programs in Real Estate Appraisals – The Basics, December, 2017 Online Residential - Single family residences, duplexes, tri-plexes, four-plexes, mobile homes, and vacant land Commercial - Warehouses, vacant tracts, islands, office buildings, remote sites, hangars, tidelands, retail buildings, apartments, industrial complexes, market data and research