Agenda - Council - 04/11/2017 - Laserfiche WebLink

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HIGHEST AND BEST USE ANALYSIS HIGHEST AND BEST USE DEFINITION The Dictionaryof Real Estate Appraisal, Fifth Edition. (Appraisal Institute, Chicago, 2010), defines the highest and best use as: The most probable use of a property which is physically possible, appropriately justified, legally permissible, financially feasible, and which results in the highest value of the property being valued. To determine the highest and best use the subject site is typically evaluated under two scenarios: as though vacant land and as presently improved. In both cases, the property's highest and best use must meet the four criteria described above. Highest and Best Use —As Though Vacant Physically Possible The physical possibility of a use is dictated by the size, shape, topography, availability of utilities, and any other physical aspects of the site. The subject site contains 1.65 acres, or 71,996 square feet. The site is irregular in shape, and has a level topography. It has average frontage, poor access, and above average visibility. The overall utility of the site is considered to be below average. Legally Permissible The zoning regulations in effect at the time of the appraisal determine the legal permissibility of a potential use of the subject site. As described in the Zoning section,the subject site is zoned H1 - Highway 10 Business District by the City of Ramsey. Permitted uses within this district include various non-traffic intensive commercial uses. Given the interim nature of this zoning district, new development on the subject site, if it were vacant, would likely be limited. However, as discussed in our Hypothetical Condition, we are envoking the Scope of the Project Rule, and are therefore considering the potential legally permissible uses of the subject outside of the proposed project. Based on our analysis of the zoning code, it appears that the desired uses include commercial uses that minimize traffic and access. This is already a limitation posed to the subject property given its existing access configuration. We consider this type of use as the physically possible and legally permissible uses in our analysis. Financially Feasible In order to be seriously considered, a use must have the potential to provide a sufficient return to attract investment capital over alternative forms of investment. A positive net income or acceptable rate of return would indicate that a use is financially feasible. Financially feasible uses are those uses that can generate a profit over and above the cost of acquiring the site, and constructing the improvements. 52 1 Page