APPRAISAL REPORT ON

VACANT LAND

XXX 68TH STREET

TOWN OF SOMERSET, WISCONSIN

BY

PATRICK D. KIRCHNER, MAI, SRA

J.C. NORBY & ASSOCIATES, INC.

2115 EAST CLAIREMONT AVENUE

SUITE 2

EAU CLAIRE, WISCONSIN

J. C. Norby & Associates, Inc. Real Estate Valuation & Consultation.

2115 East Clairemont Avenue, Suite #2

Eau Claire, WI 54701

Phone: 715-834-3953 Fax: 715-834-5101

Email: info@jcnorby.com Website: www.jcnorby.com

May 25, 2017

Attn: Cindy Campbell

County Clerks Office

St. Croix County

1101 Carmichael Road

Hudson, WI 54016

RE: Vacant Commercial Land

Xxx 68th Street

Town of Somerset, Wisconsin

Dear Ms. Campbell:

At your request, I have completed an appraisal intended to comply with Standard 1 of the

Uniform Standards of Professional Appraisal Practice (USPAP) and FIRREA requirements. This

is an appraisal type report prepared under Standards Rule 2-2(a). The legal description is

included in the enclosed report.

FINAL OPINION OF VALUE:

I have thoroughly inspected the property, researched data, and considered matters pertinent to its

value. The market value of the subject property “as is” as of May 10, 2017 is

Lot 3 – 2011 68th Street, Town of Somerset – 3.00 acres:

ONE HUNDRED TWENTY THOUSAND DOLLARS

$120,000

Lot 4 – 2007 68th Street, Town of Somerset – 3.01 acres:

ONE HUNDRED TWENTY THOUSAND DOLLARS

$120,000

St. Croix County

Attn: Ms. Cindy Campbell

RE: Vacant Commercial Land

Xxx 68th Street

Town of Somerset, Wisconsin

May 25, 2017

Page 2

This appraisal report presents brief discussions of the data, reasoning and analyses that are used

in the appraisal process to develop the opinion of value. Supporting documentation concerning

the data, reasoning and analyses is retained in the appraisal file. The depth of discussion is

specific to the needs of the client and for the intended use stated in this report. I am not responsi-

ble for unauthorized use of this report.

In accordance with the ethics rule I have not provided appraisal services regarding the subject

property in the last thirty six months as of the date of this appraisal.

Respectfully submitted,

Patrick D. Kirchner, MAI, SRA

WI Certified General Appraiser #1514-010

J. C. NORBY & ASSOCIATES, INC.

PDK/ca

Enclosure

F:\DATA\NARRATIVES\17:355FV\TOWN OF SOMERSET\XXX 68TH STREET. APPRAISAL

Copyright © 2017 by J. C. Norby & Associates, Inc. All rights reserved.

J. C. NORBY & ASSOCIATES, INC

Real Estate Valuation & Consultation

TABLE OF CONTENTS

PAGE

PURPOSE OF APPRAISAL .......................................................................................................................................... 1

DEFINITION OF MARKET VALUE ............................................................................................................................. 1

FUNCTION OF APPRAISAL ........................................................................................................................................ 1

SCOPE OF WORK ........................................................................................................................................................ 1

AREA MAP .................................................................................................................................................................... 4

REGIONAL DATA ......................................................................................................................................................... 5

INTENDED USE OF REPORT ................................................................................................................................... 11

DATE OF INSPECTION ............................................................................................................................................. 11

LEGAL DESCRIPTION ............................................................................................................................................... 11

PROPERTY TAX SECTION ......................................................................................................................................... 11

HISTORY OF PROPERTY........................................................................................................................................... 12

ENVIRONMENTAL CONDITIONS AND ZONING ..................................................................................................... 12

FLOOD PLAIN ............................................................................................................................................................ 14

PHOTOS ...................................................................................................................................................................... 14

SITE DATA................................................................................................................................................................... 19

MARKET ANALYSIS .................................................................................................................................................... 20

NEIGHBORHOOD MARKET ANALYSIS ................................................................................................................... 22

HIGHEST AND BEST USE ......................................................................................................................................... 26

ANALYSIS AND VALUATION ..................................................................................................................................... 26

LAND VALUE .............................................................................................................................................................. 27

ESTIMATED EXPOSURE AND MARKETING TIME ................................................................................................. 38

FINAL RECONCILIATION ......................................................................................................................................... 38

ASSUMPTIONS AND LIMITING CONDITIONS........................................................................................................ 40

CERTIFICATION ........................................................................................................................................................ 43

QUALIFICATIONS ...................................................................................................................................................... 44

ADDENDUM

APPRAISER’S LICENSE

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APPRAISAL REPORT ON

VACANT LAND

XXX 68TH STREET

TOWN OF SOMERSET, WISCONSIN

PURPOSE OF THE APPRAISAL:

The purpose of this appraisal is to provide an opinion of the Market Value of the subject

property in Fee Simple interest.

DEFINITION OF MARKET VALUE:

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,

knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this

definition are 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 each acting in what

they consider their own best interest;

3. a reasonable time is allowed for exposure in the open market;

4. payment is made in terms of cash in U.S. 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.

(Source: The Dictionary of Real Estate Appraisal, 4th Edition, Appraisal Institute)

FUNCTION OF APPRAISAL:

The purpose of this appraisal is to verify and document the estimated market value of the

subject property to assist the client in making a decision regarding asset management.

The objective of this report is to communicate the conclusions to the client.

SCOPE OF WORK:

The scope of work includes a number of independent investigations and analysis,

including a thorough observation of the subject site on May 10, 2017.

Site dimensions and size are obtained from county records.

Research sources utilized to gather data regarding the subject property include the St.

Croix County Register of Deeds, Treasurer, and Zoning offices.

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Research sources utilized to gather general market data include the Northwestern

Wisconsin Multiple Listing Service (MLS), Redi-Net, Korpacz Real Estate Investor’s

Survey, local real estate professionals, other real estate appraisers located throughout

Wisconsin and the Minneapolis/St. Paul, Minnesota metropolitan area, and the internal

records database of this appraisal office.

Research sources utilized to gather regional and economic data include the West Central

Wisconsin Regional Planning Commission office and the St. Croix County Economic

Development Corporation office.

In my opinion, the research sources used are sufficient for the discovery of comparable

market data to provide a reliable value opinion for the property being appraised.

Appraisal Process:

An appraisal is defined as "A definite, written, detailed opinion of a qualified

appraiser as to the market value of property." The appraisal is designed to assist

in decision making regarding a particular property.

In professional appraisals, three approaches to value are considered and usually

applied: (1) Cost Approach, (2) Sales Comparison Approach, (3) Income

Approach. All approaches apply data that are derived from the market.

In the Cost Approach, the component parts of the subject property are analyzed

and an estimate of what it would cost in the market to replace them with property

of like utility and value is made. Land is broken into use classes, each evaluated

on its value in the market. The value of the improvements is estimated based on

cost new, less depreciation. Depreciation is defined as loss in value from any

cause and may be physical wear, functional and/or external obsolescence.

The Sales Comparison Approach involves market analysis of properties that have

been sold. Each property is compared with the subject property (the property

being appraised) on numerous factors; some being time of sale, size, location, and

functional utility. Since no two properties are alike, each factor is given a dollar

value in comparison to the subject. This is the concept of "comparable sales,"

which is based on the economic principle of substitution and states: "One will not

pay more for an item than for another item of equal utility."

The Income Approach usually involves the capitalization of net income. The

appraiser outlines annual income under typical use and management using market

income and expenses. The capitalization rate is derived from the market, using

actual data from similar properties and similar investment criteria.

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The final process is correlation of the approaches and selection of the approach or

approaches that most accurately represent market value. Only the Sales

Comparison Approach was found applicable relating to this assignment.

To adequately complete the Sales Comparison Approach, sales of other vacant

land held for future development in the general area are researched and analyzed.

Of all the sales researched, those considered most representative of the subject

property are included in this analysis. Adjustments are made to the comparable

sale properties based on their differences when compared to the subject property.

The comparable properties are analyzed based on a value per acre. Sales of

commercial and river front parcels of land that have occurred within the past

several years are considered in this analysis.

The final process is correlation of the various approaches utilized into a final

value opinion for the property being appraised. This appraisal report is a brief

summary of the data, analysis and conclusions. All supporting documentation is

retained in the appraisal file.

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AREA MAP

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REGIONAL DATA:

The Town of Somerset is located in St. Croix County, Wisconsin, along the Apple River.

The population was 2,635 at the 2010 census. The town is greatly influenced by its close

proximity to the Village of Somerset and the city of New Richmond.

The Village of Somerset is located just 13 miles north of Hudson, Wisconsin on County

Road V and just 8 miles northeast of Stillwater, Minnesota across the St. Croix River. It

is a community that provides easy access to both Eastern Minnesota (St. Paul and

Minneapolis) as well as Western Wisconsin (Hudson and surrounding

villages/townships). This community has grown in recent years due to the good regional

access via State Highway 35, County Road I, and U.S. Interstate 94 just 13 miles to the

south. The St. Croix River Bridge project, due to be completed in the next two years will

make it even more accessible. The combination of these factors has produced the growth

in this area, influencing the subject property in a positive way.

The subject property is located in the northwest section of the Town of Somerset in a

rural area, a mile north of the Village of Somerset.

The immediate surrounding vicinity is in the stabilized neighborhood life cycle stage.

The majority of new commercial growth is occurring on the northeast side of the Village

of Somerset near the intersection of STH 64 and County Road C. In the subject’s

immediate area includes light industrial use to the west and bar/café to the east along

State Highway 35. The remainder of the area is comprised of rural residential and light

industrial uses.

The subject property is easily accessible from Churchill Road (a/k/a STH 35), which is

the primary north/south traffic artery through the center of Town of Somerset. Both STH

35 and STH 64 offer a direct link to Interstate 94, about 10 miles south of Town of

Somerset. There are no locational factors noted that would significantly affect the

marketability of the subject neighborhood.

The following is a market profile surrounding the subject property within a 1.0, 3.0, and

5.0 mile radius. The source of this data was gathered from the U.S. Bureau of the Census

and forecasts for 2017 and 2022.

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NEIGHBORHOOD MAP

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INTENDED USE OF REPORT:

This appraisal is intended to assist the client, St. Croix County, in making a decision

regarding asset management and to determine an active list/sales price.

The purpose of this appraisal is to estimate the market value of the subject property,

subject to the assumptions and limiting conditions herein.

The subject property consists of two vacant commercial sites ready for development

located along the east side of 68th Street and north of 200th Avenue in the Town of

Somerset. Lot 3 within CM & E Business Park consists of a 3.00 acre parcel zoned

commercial. Lot 4 within CM & E Business Park consists of a 3.01 acre parcel zoned

commercial.

The subject property is appraised in its “as is” condition. The Dictionary of Real Estate

Appraisal, fourth addition, defines "as is" market value as

follows:

“The value of specific ownership rights to an identified parcel of real estate as of the

effective Date of the appraisal; relates to what physically exists and is legally

permissible and excludes all assumptions concerning hypothetical market conditions

or possible rezoning.”

DATE OF INSPECTION:

The subject site was inspected on May 10, 2017. This is also the date of valuation.

LEGAL DESCRIPTION:

The PID#032-2187-00-003 coincides with the legal description: Lot 3, 11-006-CM & E

Business Park.

The PID#032-2187-00-003 coincides with the legal description: Lot 4, 11-006-CM & E

Business Park.

PROPERTY TAX SECTION:

Assessor's Estimated Market Value and Taxes Payable for 2017:

The subject property is assessed based on a fair market value of $80,000 with an

PID #

Land Size -

Acre

Land

Value

Building

Value

Total

Value

Real Estate

Taxes

Effective Tax

Rate

032-2187-00-003 3.00 $40,000 $0 $40,000 $708.16 0.01770400

032-2187-00-004 3.01 $40,000 $0 $40,000 $708.16 0.01770400

Total 6.01 $80,000 $0 $80,000 $1,416.32 0.01770400

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assessment ratio of 0.8274 and mill rate of 0.017704194. The effective tax rate is

estimated at 0.01770400.

HISTORY OF THE PROPERTY:

The subject property is owned by St. Croix County who acquired the property sometime

in June 2016 from Thomas Belisle in deed of foreclosure from nonpayment of real

property taxes, special assessments, special charges, or special taxes that the previous

owner had not redeemed.

ENVIRONMENTAL CONDITIONS:

The value estimated in this report is based upon the extraordinary assumption that the

property is not negatively affected by the existence of hazardous substances or

detrimental environmental conditions. I am not an expert in the identification of

hazardous substances or detrimental environmental conditions. My routine observation

around the property did not develop any information that indicated the existence of any

apparent significant substances or detrimental conditions that would affect the property

negatively. It is possible that tests and inspections made by a qualified hazardous

substance and environmental expert would reveal the existence of hazardous materials

and environmental conditions on or around the property that would negatively affect its

value. If the client has a concern, a qualified expert should be consulted to determine if

environmental hazards do exist.

ZONING:

The Commercial District is intended to provide for the establishment of a wide variety of

compatible commercial uses. Within this district, residential development, heavy

manufacturing and non-retail commercial enterprises are not allowed in the interest of

furthering the livelihood of the permitted retail commercial uses and protecting uses from

the effects of incompatibility.

The following are lot, and yard and building requirements:

Lot frontage Minimum 150 feet

Lot area Minimum one acre

Front yard setback Depending on the class of highway it abuts

Side yards Minimum of 20 feet

Source: County Code

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ZONING MAP

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FLOOD PLAIN:

According to the Federal Emergency Management Agency (FEMA) approved flood plain

map for St. Croix County, Panel #55109C0043E, effective date of March 16, 2009, the

subject site appears to be mostly in Zone X, an area of minimal flood hazard. Portions of

the land are located in the 100 year flood plain and are designated as a drainage easement

per certified survey map.

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SUBJECT PHOTOGRAPHS

Lot 3 - Looking East

Looking South along 68th Street

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SUBJECT PHOTOGRAPHS

Lot 4 - Looking SE

Lot 4 - Looking NE

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SUBJECT PHOTOGRAPHS

68th Street Looking North

200th Avenue Looking East

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AERIEL

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CERTIFIED SURVEY MAP

SITE DATA:

The subject real estate is located on the east side of 68th Street and just north of 200th

Avenue on block west of State Highway 35 approximately 1.5 mile north of the

downtown neighborhood of the Village of Somerset, Wisconsin. The subject sites have

good visibility and access from State Highway 35. The site are unimproved and future

development would require private well and septic systems.

Lot 3 contains 3.00 acres of land and Lot 4 contains 3.01 acres of land zoned commercial.

A chain link fence runs around the perimeter of the site. There were no readily apparent

or reported deed restrictions or adverse easements on the site which were observed on the

date of inspection or otherwise conveyed to the appraiser.

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MARKET ANALYSIS:

The subject property is located within the Minneapolis/St. Paul Metropolitan Statistical

Area.

Residential and Industrial Users Continue to Dominate Land Market:

The land market for industrial and multi-family uses remained strong in the

second of half of 2016, although not as scorching as in the recent past, indicating

it’s likely we’re near or at the peak demand in these commercial sectors. Pricing

has also reached peak value in the second half of 2016. Meanwhile, the single-

family sector is seeing plenty of demand from homebuyers, but builders—even

though they are well-capitalized—remain unwilling to overspend and are willing

to pass on deals that don’t meet their criteria.

Speculative land investors have scooped up the bargain deals from the fallout of

the Great Recession—most bank-owned sites have already been purchased by

opportunists whose goal is to re-sell the undeveloped land at a profit. With those

opportunities now gone, the land market is once again being dominated across all

markets by developers looking to build immediately rather than by speculators.

Industrial Land Still in High Demand:

The land market for industrial uses remained strong in the second half of 2016,

although it’s not clear if the cycle is at its end or merely nearing it. Rising labor

costs are now playing a major role in the calculations of industrial users. With the

coming of Amazon.com to Shakopee, a new, higher floor has been established for

employee pay; when added to higher construction costs, users are now regarding

land prices as one of the few remaining areas where project costs can be

contained. As a result, land prices for “as-is” industrial sites have stabilized and

perhaps peaked.

Many of the remaining industrial sites are in areas once envisioned for office uses

that cities have (sometimes reluctantly) re-guided. In such cases, city officials are

seeking to mitigate that compromise by demanding high finishes and other

aesthetic features, thus driving up building costs and exerting downward pressure

on land values.

Multi-Family Residential Land Prices Stabilize:

Momentum is still evident in the multi-family land market, both in Minneapolis

and the suburbs. With most of the best sites already taken, the multi-family land

market isn’t as explosive as in recent years, which could fairly be described as the

hottest in Twin Cities history. Rather, in the second half it was “chugging along”

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at a good pace, with stabilization in land prices and per-unit apartment

development costs evident.

Intense Demand for Single-Family Residential Land:

Well-capitalized local and national homebuilders are actively seeking sites as

consumers resume purchasing single-family homes. But as in the first half of the

year, deal flow was limited by buyers’ unwillingness to overpay.

Rising construction costs and regulatory expenses have made profit margins on

new homes very tight, and with memories of overextended land positions during

the Great Recession still fresh, builders were cautious and refused to give in to

sellers’ price demands. They continued to show a willingness to walk away from

deals, rather than buying sites and carrying them on their books.

Interest rates were on the rise, and while that may spur short-term home sales for

those seeking to lock in while they can, in the long term higher rates could test the

limits of the new home market and put downward pressure on land values.

Retailers of All Sizes Exploring Market:

Retail land interest was evident from big-box retailers in the second half,

including grocery chains such as Meijer and Hy-Vee, and from home

improvement retailer Lowe’s. Meanwhile, smaller retailers were also in the land

market, including interest from service retailers such as Kwik Trip and developers

of neighborhood-scale, in-line multi-tenant buildings.

Retailers both large and small are following the rooftops of new suburban single-

family neighborhoods, seeking prime corner locations within those areas. They

are also gravitating to mixed-use, in-fill/redevelopment projects in Class A

suburban locations such as CityPlace in Woodbury and Central Park Commons in

Eagan.

In specialty land uses, the campaign promises of President-elect Donald Trump to

spend billions of dollars on infrastructure improvements have prompted

construction-related companies (such as sand and gravel, asphalt, concrete and

pipe providers) to secure land for anticipated expanded operations. This specialty-

use activity helped push up industrial land prices on the fringes of the Twin Cities

metro.

Outlook:

Land prices for industrial and multi-family may have reached their peak in 2016, with

an inevitable stabilization to follow in 2017. There may be some room left for them to

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rise, but probably not at the rates seen when the market reached all-time highs across

all the commercial sectors.

With the surprise election of Republican Donald Trump as U.S. president, high-net-

worth real estate investors are entering 2017 with a bullish outlook and seem likely to

continue to pour capital into the sector. Builders, developers and construction trades

feel confident they will have “one of their own” in the White House and so are

gearing up to buy more equipment and expand inventories.

Rising interest rates, however, could change the outlook quickly. After spending the

post-recessionary period at the lowest levels possible, sentiment remains that rates

will have to rise at some point, and when they do, it will hurt homebuyers and could

ultimately affect land prices.

Source: Cushman/Wakefield

NEIGHBORHOOD MARKET ANALYSIS:

Projected Population and Household Size:

The subject is located approximately 1 -2 miles north of the Village of Somerset.

The subject’s market area is greatly influenced by its proximity to the village

located in St. Croix County, the fastest growing county in Wisconsin. The

proximity of western Wisconsin to the Twin Cities Metropolitan Area (TCMA)

greatly influences population growth. People are able to live in smaller

communities with affordable housing in Wisconsin and have access to greater

employment opportunities across the border. The population of the Village has

grown continuously over the past 60 years. The growth pattern reflects a dramatic

rise in population from 1990 to 2010. Between 2000 and 2010, the Village of

Somerset experienced a 69.3% increase in population despite a nationwide

housing and economic downturn that began in 2007.

The Wisconsin Department of Administration provides population and housing

projections for all municipalities in Wisconsin. The Village is projected to grow

to 4,860 residents, 2,225 residents between 2010 and 2030 (84%). A growing

population will require additional housing and may require expanded parks,

additional wastewater treatment plant capacity, or attract new businesses and

industries. Population projections in the 2010 Impact Fee Needs Assessment

Update have projected 5,169 residents by 2030. For planning purposes, we will

use the projections provided by the Wisconsin Department of Administration

because they derive housing data based on these projections.

Growing population results in more households. Household projections for the

Village. Between 2010 and 2030 it is projected that the Village will have an

additional 987 households. A single household equates to a single dwelling unit.

These new households will require a variety of housing options to meet their

needs.

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Since 2000, the Village of Somerset has continued to experience large population

growth. This is projected to continue as TCMA residents continue to move into

the area and a natural population increase. Currently, in-migration accounts for

two-thirds of population growth in St. Croix County. The Village’s age

distribution shows the growth of younger adults and families. Age distribution

will affect transportation, housing, recreation, and employment needs of residents.

Although there has been a nationwide recession since 2007, western Wisconsin

and the TCMA has fared better that many parts of the state and nation. Area

strengths include a good transportation system, educated workforce, and access to

good schools, technical colleges, and universities. There is also a long history of a

strong manufacturing sector and high tech industries.

Commuting Patterns:

Commuting patterns in the Village of Somerset model commuting patterns for

much of western Wisconsin. A majority of Somerset residents commute to the

Minneapolis-St. Paul metropolitan area. Travel time to work varies substantially,

with many residents driving 45 minutes or more. Transportation choices reflect

access to services and distances traveled for work. Single-occupant vehicles are

the dominant mode of transit, with few residents using multi-occupant modes

such as carpooling. As the growth of Somerset continues, the demand and impact

on the transportation network will increase also.

Eventual construction of a new four-lane bridge linking Stillwater, Minnesota and

Houlton, Wisconsin will influence transportation volumes in the planning area.

When the bridge is constructed, elevated traffic volumes may cause increased

congestion in and around Somerset. In addition, as residential and commercial

development patterns are influenced by improved access to neighboring

communities, transportation needs must be anticipated and planned accordingly.

The Village of Somerset has a diverse economy that reflects the makeup of its

people, landscape, and influence of the Twin Cities metropolitan area. Somerset

has a thriving industrial park and a local government that works well with

potential new businesses. The Apple River attracts tourists who float down on

inner tubes in the summers. Summer concerts also draw people from all over

Wisconsin and Minnesota. In addition, retail trade, services, and government

sectors all add to the economy. The proximity to the Twin Cities also offers

residents greater access to job diversity and higher.

Future Residential:

The minimum amount of land needed to accommodate the projected population

can be estimated based on the population projections, number of persons per

household, and the density of development. The first step is to estimate the

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number of housing units needed. The Village of Somerset will need an additional

987 housing units between 2010 and 2030.

Housing Needs Source: Wisconsin Department of Administration The amount of

land needed for the projected housing units depends on the density of the

development. The number of acres needed for future residential development will

be single family housing and that 987 new households will be added over the next

20 years.

Additional Acreage Needed for Housing by 2030 Density Acreage Needed High

(0.33 acres per household) 325 Acres Medium (0.5 acres per household) 494

Acres Low (1.0 acres per household) 987 Acres Source: Cedar Corporation Year

2010* 2015 2020 2025 2030 Total Number Of Households 1,102 1,347 1,596

1,839 2,089

Additional Housing Needed – Year 2010* 2015 2020 2025 2030 – 245 249 243

250 Village of Somerset Comprehensive Plan Update 2012-2032 represents the

maximum amount of land needed under each density. Any future multi-family

housing will reduce the acreage needed because they are built to a much higher

density and require less land. Currently there are not enough developed residential

lots to accommodate this future growth. There are four main areas outside the

Village Limits identified as suitable for residential growth. These were chosen

because they represent the largest parcels of vacant land adjacent to the Village.

The areas are: East of the River Hills subdivision.

Future Commercial:

The need for commercial land in the Village of Somerset will increase as the

population increases. Sites must be made available for expanded retail, services,

and wholesale operations. It is difficult to predict the amount of land that will be

needed for commercial expansion, but the need should be anticipated and suitable

land must be identified to accommodate the growth. There are three distinct areas

for commercial expansion. The largest of these areas will be adjacent to the State

Trunk Highway 35/64 interchange south and east of the Village where

approximately 45 acres is proposed for commercial development. Smaller areas

located near CTH VV, the CTH I overpass, and a continuing adjacent to existing

commercial development in the Village will accommodate future commercial

needs.

Future Industrial:

The Somerset Industrial Park acquired an additional 100 acres in 2008 to ensure

room for future industrial needs.

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Future Agriculture:

The Village of Somerset has approximately 100 acres classified as Agricultural

lands which are located in the Village. As the population grows, these lands will

likely be converted into residential areas. Village of Somerset Comprehensive

Plan Update 2012-2032 8-9 Future Institutional The growth of the Village of

Somerset has caused existing schools to need additional classrooms for new

students. The Somerset School District acquired approximately 70 acres north of

the existing Elementary, Middle, and High Schools for expansion.

Commercial land use needs are likely to increase with the STH 35/64 bypass

opening and the new Stillwater Bridge to be completed in the next two years. A

demand for commercial property should coincide with population increases and

the general demand for more local goods and services. Commercial needs will be

estimated at five acres a year based on recent trends. Industrial land use is

predicted to increase by an average of five acres per year. This is based off of

historical demand. (Source: Somerset’s 2030 comprehensive Plan)

Conclusion:

A market analysis is considered one of the basic components to the appraisal

process. The term market analysis refers to the study of market conditions for a

specific property type. In valuation assignments, the market analysis focus

relating to the subject property is to inform and support the highest and best use,

the appropriate approaches to value, and the final reconciliation.

The valuation of vacant land in Town of Somerset must take into account data and

market information from a national, regional, and local perspective. The

immediate market area has a considerable amount of residential and commercial

zoned land ready for development.

Based on the current demand and the restrictions governing the type of

development, a very limited number of legally permissible, physically possible,

financially feasible uses exist for the subject site. As such, the subject site’s

maximally productive use, and therefore, its highest and best use as vacant is to

hold long term 1 - 5 years for future development which conforms to the land use

plans as guided by the county use plan.

J. C. NORBY & ASSOCIATES

Real Estate Valuation & Consultation

- 26 -

HIGHEST AND BEST USE:

The following definition of Highest and Best Use is taken from the Appraisal of Real

Estate, 13th Edition, Appraisal Institute:

That reasonable and probable use that will support the highest present

value, as defined as of the effective date of the appraisal. Alternatively,

that use, from among reasonably probable and legal alternative uses,

found to be physically possible, appropriately supported, financially

feasible, and which results in highest land value.

The definition applies specifically to the highest and best use of land. It is to be

recognized that in cases where a site has existing improvements on it, the highest and best

use may very well be determined to be different from the existing use. The existing use

will continue however, unless and until land value in its highest and best use exceeds the

total value of the property in its existing use.

The four tests of Highest and Best Use are those outlined above, i.e. physically possible,

legally permissible, financially feasible, and maximally productive. Highest and Best

Use for the subject property is examined on an As Vacant and Available for Development

and As Improved basis. The following tests must be met in estimating the Highest and

Best Use of a vacant parcel: there must be a profitable demand for such use and it must

return to the land the highest net return for the longest period of time. These tests have

been applied to the subject site and are discussed as follows.

HIGHEST AND BEST USE AS VACANT

Based on the analysis of the legally permitted, physically possible, and financially

feasible uses of the property, the most profitable and highest and best use of the appraised

land, assuming it to be vacant and available for development, would be to hold 1-5 years

for commercial development as warranted by market demand that conforms with the

current zoning and to surrounding development.

ANALYSIS AND VALUATION:

This report considers the three standard approaches to value in the valuation process; the

cost approach, sales comparison approach, and the income approach. Each approach

complements and confirms the conclusions reached through the other two methods of

valuation. Each of these approaches to the opinion of market value is explained at the

beginning of its respective section. The income approach is not considered applicable

relating to this assignment due to limited/scarce rental data for similar type property. The

sales comparison approach is based on vacant land held for future development.

J. C. NORBY & ASSOCIATES

Real Estate Valuation & Consultation

- 27 -

LAND VALUATION:

The application of this approach produces an estimate of value of a property by

comparing it with similar properties of the same type and class which have been sold

recently or are currently offered for sale in the same or competing areas.

The comparative processes utilized in determining the degree of comparability between

two properties involves judgment as to their similarity with respect to many factors such

as location, construction, age and condition. The sale price of these properties deemed

most comparable tends to set the range in which the value of the subject property will

fall. Further consideration of the comparative data will indicate to the appraiser a figure

representing the value of the subject property; that is, the probable price at which it could

be sold by a willing seller to a willing buyer as of the date of the appraisal.

Over the last several years there have been limited sales of commercial land in Somerset,

Wisconsin. Therefore, I have had to go outside of the usual parameters in terms of size

and location.

The following sales were found to be applicable in determining a credible opinion of the

market value for the subject property relating to the land.

J. C. NORBY & ASSOCIATES

Real Estate Valuation & Consultation

- 28 -

LAND COMPARABLE #1

Sale Information

Intended Use of Site: Vacant Commercial Land

Location: xxxx Highway 35/64, Somerset, WI

Legal Description: Parcel 43A-15 with PID#181-100910-120, St. Croix

County, Wisconsin.

Date of Sale: July 7, 2015

Buyer: Mo-HaRe, LLC

Seller: Baillargeon Properties, LLC

Zoning: Commercial/Business

Utilities: Water and sewer are available along Plourde Drive and

would require extending the utilities to the site for future

development.

Topography: Gently rolling and assumed stable

Size: 7.919 Acres

Sale Price: $300,000

Unit Price: $37,884/Acre

Source: Buyer/County Records

Comments: Land to be held for development with a mix office/retail

use. The current use as parking for the amphitheater

located to the north is considered an interim use.

J. C. NORBY & ASSOCIATES

Real Estate Valuation & Consultation

- 29 -

LAND COMPARABLE #2

Sale Information

Intended Use of Site: Vacant Commercial Land

Location: 1410 Highway 35/64, St. Joseph Township, WI

Legal Description: Lot 11 of CSM 9/2556 6.966, St. Croix County, Wisconsin.

Date of Sale: March 22, 2015

Buyer: Confidential

Seller: Confidential

Zoning: Commercial/Business

Utilities: Private well

Topography: Generally level and assumed stable

Size: 5.97 Acres

Sale Price: $225,000

Unit Price: $37,688/Acre

Source: County Records

Comments: Land to be developed with a mix office/retail use.

J. C. NORBY & ASSOCIATES

Real Estate Valuation & Consultation

- 30 -

LAND COMPARABLE #3

Sale Information

Intended Use of Site: Vacant Commercial Land

Location: 1905 Highway 35

Somerset, WI

Legal Description: Four lots – PID#181-4109-02-000, 03, 04, 05-000.

Date of Sale: May 13, 2013

Buyer: Rajean, LLC

Seller: David R. Bracht to Central Bank

Zoning: C-2, Highway Commercial

Utilities: Available to the site.

Topography: Generally level and assumed stable.

Size: 1.35 acres

Sale Price: $43,000

Unit Price/Acre: $31,852/Acre

Source Assessor/County Records/Personal Inspection/Seller

Comments: This sale represents a bank owned property. The site is serviced

with city water and sewer. The property was listed on the open

market for 280 days in a down market in 2011. The property

was listed for $75,000 based on two appraisals and a separate

review appraisal. The broker states that the property sold at a

discount near 15% below market for similar zoned land. The

buyer came to the table with cash and the seller was motivated to

unload the land. The site is located approximately a mile north

of the downtown commercial area in a relatively rural setting

with light industrial use to the south. The site is now improved

with a light industrial building.

J. C. NORBY & ASSOCIATES

Real Estate Valuation & Consultation

- 31 -

LAND COMPARABLE #4

Sale Information

Intended Use of Site: Vacant Commercial/Industrial Land

Location: 2701 Harvey Street, Hudson, WI

Legal Description: Lot 4, St. Croix Business Park 1st, St. Croix County,

Wisconsin.

Date of Sale: March 29, 2012

Buyer: Bondplex, LLC

Seller: St. Croix Business

Zoning: Commercial/Industrial

Utilities: Available to the site.

Topography: Generally level and assumed stable

Size: 4.96 Acre

Sale Price: $200,000

Unit Price: $40,323/Acre

Source: Seller/County Records

Comments: Commercial/Industrial lot is located a few miles south of

U.S. Interstate 94.

J. C. NORBY & ASSOCIATES

Real Estate Valuation & Consultation

- 32 -

LAND SALE COMPARABLE #5

Survey

Intended Use of Site: Industrial land to be developed with an office/warehouse

building

Location: xxx 70th Avenue, Village of Roberts, St. Croix County, WI

Legal Description: Located in Part of the SE ¼ of the SW ¼ and in Part of the

SW ¼ of the SE ¼ of Section 27, Twp 29N, R18W, Village

of Roberts, St. Croix County, Wisconsin.

Date of Sale: September 14, 2012

Seller: Crane 1 Holdings, LLC

Buyer: U.S. Minerals, Inc.

Zoning: M-3, General Industrial District

Utilities: None available to the site. Private well and septic will be

installed for the new improvements.

Topography: Gently rolling and assumed stable

Size: 19.3949 Acres

Sale Price: $395,026

Unit Price: $20,368/Acre

Source Contract/County Records/Seller

Comments: Property was part of the subject’s larger parcel. U.S. Minerals is in the process of

constructing a light industrial building to be completed in early 2013.

J. C. NORBY & ASSOCIATES

Real Estate Valuation & Consultation

- 33 -

LAND SALES COMPARABLE MAP

J. C. NORBY & ASSOCIATES

Real Estate Valuation & Consultation

- 34 -

SUMMARY OF LAND SALES:

The preceding comparables all require adjustments for differences to the subject. Those

adjustments found pertinent to the valuation of land are those for differences in property

rights conveyed, financing, sale terms, and expenditures after purchase, size of the parcel,

non-realty components, and economic conditions that would affect the sales price.

Applying these adjustments to the comparable sales produces a subtotal relative to the actual

recorded sales price. This figure is then adjusted for market conditions resulting in a figure

that is in turn divided by the size (Acre) of the comparable sale to determine an estimated

adjusted price per acre. (Experience has shown that the primary comparative unit in land

sales is the price per acre.) The adjustment for market conditions reflects a broader

consideration of the market and is always invoked to some degree, as opposed to a specific

adjustment for economic conditions that may apply to only a given sector of market activity,

and may be reflective of a specific incident or trend.

Adjustments for differences are considered and include adjustments for overall location,

visibility, access, commercial density and traffic flow. Adjustments are also given based on

physical characteristics of the site relative to the shape of the lot as well as the topography.

Certain aspects of comparison will be of more importance for different property types. For

example, retail properties benefit more from good visibility and ease of access than would

an industrial property.

The adjustments are then considered with respect to the adjusted price per acre to produce an

indication of value, which is reflective of the subject property. The rationale and application

for each of these adjustments is as follows:

Property Rights Conveyed Adjustments:

This adjustment accounts for differences in the type of interest held. This

generally applies when the interest being valued, or that sold, is less than full fee

simple. Leasing conditions of the sale, such as leasehold or leased fee, are

compared to market conditions and appropriate adjustments are made. Other

types of property interests include life estate, easement (servient or dominant

estate), or undivided interests. No adjustments are necessary if the interest being

valued is equivalent to that of the comparables.

Financing:

Adjustments for differences in financing refer to terms of sale that are not

equivalent to cash. Examples would include seller financing, seller buy-down of

buyer’s mortgage, assumed financing, buyer paying transaction costs that are

normally paid by the seller (or vice versa), installment sale contract, or a lease

with the option to buy. All of the comparables would be adjusted to cash

J. C. NORBY & ASSOCIATES

Real Estate Valuation & Consultation

- 35 -

equivalent sales prices in order to account for differences in financing terms.

None of the comparable sales require an adjustment for this factor.

Conditions of Sale:

This adjustment is given when a sale includes possible circumstances in which a

buyer or seller is not typically motivated. Examples would include sales

determined not to be of arm’s length, typically those involving family members,

friends or related corporations or partnerships, assemblages, financial necessity to

sell or buy, or inadequately informed parties. Information gathered from the

broker indicates that a discount was applied to sale #3 in terms of motivation by

the seller to unload the property when a legitimate buyer comes forward with

cash. None of the other comparable sales require an adjustment for this aspect of

comparison.

Expenditure after Purchase:

In some instances sales of land require that the buyer extend additional monies to

develop the land. Some of these circumstances include soil remediation, wetland

containment, or the cost of razing an existing structure. All comparable properties

sold as is and no adjustment is necessary.

Market Conditions:

This adjustment accounts for the effect of changes in general property values over

time due to inflation, deflation, changing investor perceptions, and fluctuations in

supply and demand. The most reliable method of determining a credible

adjustment is to analyze properties which have sold and re-sold over the last

several years. However, no multiple transactions have occurred over the last

several years to reconcile a reliable rate.

The Department of Revenue tracks changes in property values. It is somewhat of

a loose analysis as it covers a large number of properties. According to their

statistics, overall land values have changed over the past several years. This is

shown as follows:

Year

Town of

Somerset

2015 +10%

2014 +3%

2013 +0%

2012 +3%

2011 -1%

J. C. NORBY & ASSOCIATES

Real Estate Valuation & Consultation

- 36 -

I interviewed various brokers who have shared market data over the last few

years. Land values were in decline from 2009 to the beginning of 2011.

Land values have gradually increased since 2012. The land market is active in

western Wisconsin and especially in the St. Croix County area due to the new

Stillwater Gateway Bridge to be completed in the next two years connecting

Somerset to Stillwater, Minnesota. Sales which have occurred after 2012 are

adjusted upward 3%.

Location:

This adjustment accounts for differences in overall location. Further adjustments

will follow relative to this larger issue, addressed with additional consideration to

issues of site visibility, access, commercial density, and traffic flow. The subject

is located in a good location in the Village of Somerset, WI. Location for

commercial property considers visibility and ease of access. The subject property

is located approximately one mile west of State Highway 35/64 interchange. It

has good visibility and adequate access.

Sale #4 is located in close proximity to Interstate 94 in the community of Hudson.

Access from major roadways is more desirable than the subject. A negative

adjustment for location is appropriate. The level of adjustment is based on rental

rates which are typically 15% higher in these commercial corridors in relation to

the subject’s market place.

All other sales are considered in a similar location. No adjustment is necessary.

Size:

The size adjustment generally reflects the inverse relationship expressed between

unit price and lot size. No real definitive adjustment appears based on sales #1 -

#4. Sale #5, a larger parcel of land and sold at the lower end of the range. This

sale requires an adjustment upward.

Utilities to Site:

The subject property does not include municipal water and sewer to the site. I

have considered the market value differential relating to municipal utilities. Sale

#3 and #4 include city water and sewer. Based on paired sales analysis no real

definitive adjustment appears warranted.

The following is a land grid demonstrating the adjustments to the comparable

properties.

J. C. NORBY & ASSOCIATES

Real Estate Valuation & Consultation

- 37 -

GRID ANALYSIS OF LAND SALES

SALE # SUBJECT PROPERTY SALE #1 SALE #2 SALE #3 SALE #4 SALE #5

DATE OF SALE May-17 Jul-15 Mar-15 May-13 Mar-12 Sep-12

PRICE $300,000 $225,000 $43,000 $200,000 $395,026

SIZE (ACRE) 3.000 7.92 5.97 1.35 4.96 19.39

FINANCING (%)

:AT MKT RATES YES YES YES YES YES

ADJUSTMENTS: %

SALE COND'S 0% 0% 15% 0% 0%

CASH EQUIV'Y 0% 0% 0% 0% 0%

NORMAL PRICE: $300,000 $225,000 $49,450 $200,000 $395,026

BUYER'S EXPENDITURES 0.00% 0.00% 0.00% 0.00% 0.00%

MARKET COND'S 5.50% 6.00% 12.00% 16.00% 14.00%

ADJUSTED PRICE: $316,500 $238,500 $55,384 $232,000 $450,330

LOCATION Somerset 0% 0% 0% -15% 0%

SIZE 3.00 Acres 0% 0% 0% 0% 25%

ZONING Commercial 0% 0% 0% 0% 0%

TOPOGRAPHY Gently Rolling 0% 0% 0% 0% 0%

SHAPE Irregular 0% 0% 0% 0% 0%

ACCESS Good 0% 0% 0% 0% 0%

UTILITIES Private 0% 0% 0% 0% 0%

NET ADJUSTMENT 0% 0% 0% -15% 25%

ADJ SALE PRICE: $316,500 $238,500 $55,384 $197,200 $562,912

/ACRE $39,967 $39,950 $41,025 $39,758 $29,024

AVERAGE PRICE:

/ACRE $37,439

J. C. NORBY & ASSOCIATES

Real Estate Valuation & Consultation

- 38 -

CONCLUSION OF VALUE OF SUBJECT LAND

Land sales in built-up areas similar to the subject can be difficult to come by, which may

influence the degree to which a given sale resembles the subject. I have researched sales

as similar as possible to the subject. The Sales Comparison Approach is based on the

sales of five vacant parcels of similar zoned land within the subject market area of

competition.

The above adjusted sales indicate a range of $29,024 to $41,025 per acre. Sale #5

required the most adjustments and very little weight is given to this adjusted sale. This

sale is zoned industrial and located in the Village of Roberts. The site is considerable

larger than the subject and is included in this analysis to bracket the higher end of the

range. The subject is considered superior to this land parcel. The most recent land sales

#1 - #3 indicated an adjusted mean of $40,314/Acre. The subject is most like sale #2, #3,

and #4 in terms of size. The adjusted mean of these three sales indicated $40,244/Acre.

Based on the above information, the value of the property is estimated near the mean with

weight given to sales #2 - #4 reconciled at $40,000/Acre. The market value of the two

parcels is shown as follows:

Lot 3 3.00 acres @ $40,000/acre = $120,000

Rounded to, $120,000

Lot 4 3.01 acres @ $40,000/acre = $120,400

Rounded to, $120,000

J. C. NORBY & ASSOCIATES

Real Estate Valuation & Consultation

- 39 -

ESTIMATED EXPOSURE AND MARKETING TIME:

EXPOSURE TIME: estimated length of time that the property interest being appraised

would have been offered on the market prior to the hypothetical consummation of a sale

at market value on the effective date of the appraisal.

Comment: Exposure time is a retrospective opinion based on an analysis of past events

assuming a competitive and open market. The improved property sales indicated that

exposure time (i.e., the length of time the subject property would have been exposed for

sale in the market had it sold at the market value concluded in this analysis as of the date

of this valuation) would have been approximately 12 months. The estimated marketing

time (i.e., the amount of time it would probably take to sell the property if exposed in the

market beginning on the date of valuation) is estimated to be 12 months.

FINAL RECONCILIATION:

The sales comparison approach is also a good indicator of the subject's market value. It

is founded in the economic principle of substitution, which states that a prudent investor

will pay no more for a given benefit - in this case, an income property - than for an

equally desirable bundle of benefits, or a substitute property. All of the comparable sales

are commercial land ready for development deemed similar to the subject. The opinion

of value for the subject property was based on the indicated value from the comparable

sales after adjustments were made to make them more similar to the subject. The sales

comparison approach is a good indicator of the subject's market value.

I have thoroughly inspected the property, researched data, and considered matters

pertinent to its value. The market value of the subject property “as is” as of May 10,

2017 is

Lot 3 – 2011 68th Street, Town of Somerset – 3.00 acres:

ONE HUNDRED TWENTY THOUSAND DOLLARS

$120,000

Lot 4 – 2007 68th Street, Town of Somerset – 3.01 acres:

ONE HUNDRED TWENTY THOUSAND DOLLARS

$120,000

J. C. NORBY & ASSOCIATES

Real Estate Valuation & Consultation

- 40 -

ASSUMPTIONS AND LIMITING CONDITIONS

1. The “Scope of Work”, as agreed upon by the client and appraiser, is the work the appraiser performed to

develop the assignment results. Please refer to the ”Scope of Work” section of this report.

2. This is an Appraisal Report which is intended to comply with the reporting requirements set forth under

Standard Rule 2-2(a) of the Uniform Standards of Professional Appraisal Practice for an Appraisal Report.

As such, it might not include full discussions of the data, reasoning, and analyses that were used in the

appraisal process to develop the appraiser's opinion of value. Supporting documentation concerning the

data, reasoning, and analyses is retained in the appraiser's file. The information contained in this report is

specific to the needs of the client and for the intended use stated in this report. The appraiser is not

responsible for unauthorized use of this report.

3. No responsibility is assumed for legal description, legal or title considerations. Title to the property is

assumed to be good and marketable unless otherwise stated in this report.

4. The property is appraised free and clear of any or all liens and encumbrances unless otherwise stated in

this report.

5. Responsible ownership and competent property management are assumed unless otherwise stated in this

report.

6. The information furnished by others is believed to be reliable. However, no warranty is given for its

accuracy.

7. All engineering is assumed to be correct. Any plot plans and illustrative material in this report are

included only to assist the reader in visualizing the property.

8. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures that

render it more or less valuable. No responsibility is assumed for such conditions or for arranging for

engineering studies that may be required to discover them.

9. It is assumed that there is full compliance with all applicable federal, state, and local environmental

regulations and laws unless otherwise stated in this report.

10. It is assumed that all applicable zoning and use regulations and restrictions have been complied with,

unless a nonconformity has been stated, defined, and considered in this appraisal report.

11. It is assumed that all required licenses, certificates of occupancy or other legislative or administrative

authority from any local, state, or national governmental or private entity or organization have been or can

be obtained or renewed for any use on which the value estimates contained in this report are based.

12. Any sketch in this report may show approximate dimensions and is included to assist the reader in

visualizing the property. Maps and exhibits found in this report are provided for reader reference purposes

only. No guarantee as to accuracy is expressed or implied unless otherwise stated in this report. No

survey has been made for the purpose of this report.

J. C. NORBY & ASSOCIATES

Real Estate Valuation & Consultation

- 41 -

ASSUMPTIONS AND LIMITING CONDITIONS (Continued)

13. It is assumed that the utilization of the land and improvements is within the boundaries or property lines of

the property described and that there is no encroachment or trespass unless otherwise stated in this report.

14. The appraiser is not qualified to detect hazardous waste and/or toxic materials. Any comment by the

appraiser that might suggest the possibility of the presence of such substances should not be taken as

confirmation of the presence of hazardous waste and/or toxic materials. Such determination would require

investigation by a qualified expert in the field of environmental assessment. The presence of substances

such as asbestos, urea-formaldehyde foam insulation, or other potentially hazardous materials may affect

the value of the property. The appraiser's 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 unless otherwise stated in this report.

No responsibility is assumed for any environmental conditions, or for any expertise or engineering

knowledge required to discover them. The appraiser's descriptions and resulting comments are the result

of the routine observations made during the appraisal process.

15. Unless otherwise stated in this report, the subject property is appraised without a specific compliance

survey having been conducted to determine if the property is or is not in conformance with the

requirements of the Americans with Disabilities Act. The presence of architectural and communications

barriers that are structural in nature that would restrict access by disabled individuals may adversely

affect the property's value, marketability, or utility.

16. Any proposed improvements are assumed to be completed in a good workmanlike manner in accordance

with the submitted plans and specifications.

17. The distribution, if any, of the total valuation in this report between land and improvements applies only

under the stated program of utilization. The separate allocations for land and buildings must not be used

in conjunction with any other appraisal and are invalid if so used.

18. Possession of this report, or a copy thereof, does not carry with it the right of publication in whole or in

part. It may not be used for any purpose by any person other than the party to whom it is addressed

without the written consent of the appraiser.

19. Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of

the appraiser, or the firm with which the appraiser is connected) shall be disseminated to the public

through advertising, public relations, news sales, or other media without prior written consent and

approval of the appraiser.

20. The valuation of the property (i.e., Cost Approach, Sales Comparison Approach and Income Capitalization

Approach) is used in the appraisal to value only this property for the intended client. The appraised value,

any parts of the appraisal, or valuation process must not be used for any other purpose or reason.

21. The client agrees that the appraisal firm does not by performing the services rendered, assume, abridge,

abrogate, or undertake to discharge any duty of client to any other entity.

J. C. NORBY & ASSOCIATES

Real Estate Valuation & Consultation

- 42 -

ASSUMPTIONS AND LIMITING CONDITIONS (Continued)

22. Any use of the appraisal report, by the client, is conditioned upon payment of all fees in accordance with

the agreed terms.

23. In consideration for performing the services rendered at the fee charged, the appraisal firm expressly limits

its liability to the amount of the fee. The appraisal firm 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. The client shall indemnity and hold harmless the appraisal firm and its

employees, against all claims by any third party or any judgment for loss or damage relating to the

performance of any services by the appraisal firm.

24. In the future, if the appraisal firm is compelled to produce documents or testify with regard to work

performed, the client shall reimburse appraiser for all costs and expenses incurred.

25. J. C. Norby & Associates 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 experts or soil conditions. If

requested, J. C. Norby & Associates will recommend qualified experts in these fields to assist the client

and/or the appraisal process.

26. This appraisal report has been written for the intended use of the client listed in this appraisal. Possession

of this report, or a copy thereof, does not carry with it the right of publication (either in whole or in part),

nor may it be used for any purpose other than the one stated in the Letter of Transmittal and the Purpose of

the Appraisal, without the express, written consent of the appraiser and client. Authorized copies of this

report will be signed by the appraiser(s). Unsigned copies should be considered incomplete. All

unauthorized or incomplete copies of this report should also be considered confidential, and as such, must

be returned, in their entirety, to J. C. Norby & Associates.

J. C. NORBY & ASSOCIATES

Real Estate Valuation & Consultation

- 43 -

CERTIFICATION I certify that, to the best of my knowledge and belief:

1. The statements of fact contained in this report are true and correct.

2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting

conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions.

3. I 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.

4. I have no bias with respect to the property that is the subject of this report or to the parties involved with this

assignment.

5. My engagement in this assignment was not contingent upon developing or reporting predetermined results.

6. My 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.

7. My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity

with the Uniform Standards of Professional Appraisal Practice.

8. I have made a personal inspection of the property that is the subject of this report.

9. No one provided significant real property appraisal assistance to the person signing this certification.

10. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in

conformity with the requirements of the Code of Professional Ethics and the Standards of Professional

Appraisal Practice of the Appraisal Institute.

11. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly

authorized representatives.

12. As of the date of this report, I have completed the requirements of the continuing education program of the

Appraisal Institute.

13. I have the appropriate knowledge of the specific market and relevant experience appraising properties

similar in size and complexity to the property under consideration to complete this assignment with

competence.

14. I have performed no other services, as an appraiser or in any other capacity, regarding the property that is

the subject of the work under review within the three-year period immediately preceding acceptance of this

assignment.

Appraiser's Signature

Patrick D. Kirchner, MAI, SRA

Date of Signature – May 25, 2017

State Certification #1514-010

J. C. NORBY & ASSOCIATES

Real Estate Valuation & Consultation

- 44 -

Qualifications of

Patrick D. Kirchner, MAI, SRA

PROFESSIONAL AFFILIATION

MAI, SRA, Designated Member of the Appraisal Institute Minnesota Certified General Real Property Appraiser License Number: 20049235

Wisconsin Certified General Appraiser & License Number: 1514-010

Montana Certified General Appraiser & License Number: 7036

Scope of Business

Appraisal • Appraisal Review • Consulting • Development Valuation and Consultation • Easement Analysis •

Eminent Domain Valuation and Consulting • Feasibility Studies • Foreclosure / REO • Highest and Best Use Studies

• Land Use Studies and Planning • Litigation / Litigation Support • Market Analysis • Real Estate Tax Valuation and

Consulting • Relocation Appraisal and Consulting • Retrospective Valuation • Sensitivity Analysis

Real Estate Appraisal/Business Experience

Residential

Condo, Multi-Family Project (Townhouse, Condo, Etc) • Farmette (Lifestyle farm, Hobby farm) • High End

Residential • Low Income and/or Affordable Housing • Mixed Use (Residential / Commercial) • Mobile Home Park

• Multi-family (2-4 units) • Multi-family (5+ units) • Ranchette (Hobby) • Single Family Appraisal (Conventional,

Other) • Single Family Appraisal (Relocation) • Unique Property

Commercial

Assisted Living / Skilled Care Facility / Nursing Home • Automobile Dealership • Banquet / Reception Hall •

Branch Bank / Financial Building • Condominium (Office / Retail / Etc.) • Convenience Store / Service station • Day

Care • Dry Cleaner • Hotel / Resort • Medical Facility / Clinic • Motel • Office Building (High Rise, over three

stories) • Office Building (Low Rise, three stories or less) • Retail (Single Tenant or Free Standing) • Self Storage •

Shopping Center (Local, Strip, Neighborhood, Community, Etc.) • Shopping Center (Power Center, Outlet Center,

Lifestyle, Etc.) • Shopping Center

Industrial

Industrial (Heavy (Manufacturing) • Industrial (Small Office Warehouse / Mfg.) • Industrial Light (Distribution,

Storage) • Research and Development Lab / Hi-Tech / Bioengineering • Truck Terminal / Hub / Transit Facility

Land

Acreage (Mixed Use) • Acreage (Non-Residential) • Acreage (Residential) • Lakeshore, Riverfront, Other

Waterfront • Land, Rural • Land, Transitional • Land, Urban • Open Space / Public Park • Subdivided Land / Lot

(Non-Residential) • Subdivided Land / Lot (Residential) • Subdivision (Commercial, Industrial, etc) • Subdivision

(Residential) • Wetland, Swamp, Marsh

Property Rights Appraised

Access Rights • Air Rights • Fee Simple Interest • Ground Lease • Leased Fee Interest • Leasehold Interest • Life

Estate • Partial Interest

Specialized Education

Advanced Applications (550) Appraisal Institute (Successfully completed in 7/31/2006)

J. C. NORBY & ASSOCIATES

Real Estate Valuation & Consultation

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Report Writing and Valuation Analysis (540) Appraisal Institute (Successfully completed in 3/13/2001)

Advance Sales Comparison & Cost Approaches (530) Appraisal Institute (Successfully completed in 4/01/2006)

Highest and Best Use/Market Analysis (520) Appraisal Institute (Successfully completed in 10/30/2006)

Advanced Income Capitalization (510) Appraisal Institute (Successfully completed in 5/14/2005)

Advanced Residential Form & Narrative Writing (500) Appraisal Institute (Successfully completed in

12/08/2001)

Condemnation Appraising (710) & (720) Appraisal Institute (Successfully completed in 7/13/2001)

Basic Income Capitalization (310) Appraisal Institute (Successfully completed in 7/17/1999)

7-Hour National USPAP Update Course Appraisal Institute (Successfully completed in 8/1/2005 & 8/08/2007)

USPAP (410) Appraisal Institute (Successfully Completed in 3/3/2003)

Standards & Ethics (420) Appraisal Institute (Successfully Completed in 8/6/2003)

Creighton University, B.S in Mathematics 1986 Business Experience

J.C. Norby & Associates – Contract Appraiser, June of 2006 – To Present

ADDENDUM

APPRAISER LICENSE