2004-099-RES ACCEPTING APPRAISED VALUE ON TWO TEMPORARY CONSTRUCTION EASEMENTS FOR THE TEXAS DEPT OF TRANSP FUNDED PROJECT TO WIDEN LAMAR AVE BETWEEN 20TH ST NE AND NORTH COLLEGIATE DRIVE

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. .' ~ . HIGHEST AND BEST USE Highest and best use may be defined as "the reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible and that results in the highest value." 1 To have value, a site must have utility that is in demand by prospective purchasers, with utility being defined as net income or amenities derived from ownership of the property. The location of the tract, neighborhood characteristics and current market needs and demands set forth the site's highest and best use. Other considerations that must be weighed in the analysis are the existing zoning ordinances, deed restrictions, topography, shape and size of the tract. To estimate highest and best use, four elements are considered: Physically Possible Use, Legally Pennissible Use, Financially Feasible Use and Maximally Productive Use ANALYSIS OF SITE " As VACANT" LEGALLY PERMISSIBLE Except for legally non-conforming property, the first step in determining what is legally permissible is to I analyze private restrictions, zoning, building codes, historic district controls, and environmental regulations. The subject is located within the surrounding area of the City of Paris which employs zoning ordinances. The subject property is currently zoned for residential use. Therefore, some type of residential use would be legally permissible on this site. However, it is possible to have the zo~g changed from residential to commercial along this portion of Lamar Avenue. PHYSICALLY PossmLE Many physical characteristics of a site can affect the uses to which it can be put. These characteristics can include size, location, shape, road frontage, topography, easements, utility availability, flood plain, and surrounding properties. The subject property's size is physically suitable for many types of development. As previously mentioned, utility easements are typically located along the frontage and perimeter portions of the site. The location of the easements are typical of the area and do not have an adverse effect on the functionality of the site. Therefore, based on the physical characteristics of the subject, possible developments for this property are numerous. It should be noted that the subject property is located in an area that is primarily commercial in nature. As such, the subject property, will be termed as a highest and best use of commercial, regardless of the property's current use. The value conclusion contained herein recognizes all potential uses of the site. F'INANCIALL Y FEASmLE There is currently limited demand for vacant land in the market area. Also, based on the analysis performed in the following sections of this report, land in the market is priced at a level that should not impede development alternatives. Therefore, economic conditions indicate that it is financially feasible to develop the property at this time for some type of commercial use. MAXIMALLY PRODUCTIVE Among the fmancially feasible uses, the use that produces the highest rate of return or value (given a constant rate of return), is the highest and best use. Based upon the previous discussion regarding the physical, legal and financially feasible aspects of the subject site, it has been noted that overall land uses in the subject neighborhood are vacant or currently used for commercial use. Given that fact, the maximally productive highest and best use for the subject is commercial use. 1 The Dictionary of Real Estate Appraisal Third Edition, American Institute of Real Estate Appraisers, Chicago, Dlinois, 1989, p. 171. Page 2.10