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HomeMy WebLinkAboutCOM 0663.009 2002-2004Harry Kim Mayor July 9, 2004 County of Hawaii Finance Department 25 Aupuni Street, Room 118 • Hilo, Hawaii 96720 (808) 961-8234 • Fax(808)961-8248 Honorable James Arakaki, Chairperson and Members of the County Council Hawaii County Council 25 Aupuni Street Hilo, Hawaii 96720 William Takaba Director Nancy E. Crawford Deputy Director �7 L v �_ C :u Re: Resolution 203-04, Authorizing the Acquisition of Private Property by Eminent Domain or Negotiation for a Pahoa Village Resource Park Enclosed for your information are copies of two appraisal reports on the property being acquired: 1. Appraisal by Robert G. Bloom, Jr., dated November 11, 2003, for the County of Hawaii; and 2. Appraisal by Lawrence Appraisal Group Hawaii -Inc., dated June 18, 2004, for Ms. Monika Mallick. I was asked by the property owner, Ms. Monika Mallick, and her attorney, Wil Rosdil, to transmit the Lawrence Appraisal Group appraisal to you. At the same time, I feel it appropriate that you also receive a copy of the report done by Mr. Robert Bloom, Jr. for the County of Hawaii. I would appreciate it if you would distribute these copies to members of the Council. Should you have any questions, do not hesitate to call me. Thank you very much. William Takaba Director of Finance Enclosures cc: Wil Rosdil (Note: The two appraisal reports are or, file in the Office of the County Clerk.) Comm. No. kip CAAAML Ref. To: Ref. Date JUI 1 2 7004 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-t-5-2: 24 An Appraisal Report Valuing the Fee Simple Interest in Commercial Property Pahoa Village Road, Pahoa Hawaii TMK (3)-l-5-2: 24 As of June 18, 2004 Prepared for Ms. Monika Mallick Prepared by Lawrence Appraisal Group Hawaii, Inc. LAGH FILE NUMBER: HC47A002C4 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 308 Kamehameha Avenue, PH -3 Hilo, Hawaii 96720 Tel: (808) 935-6081 Fax: (808) 935-6147 Lawrence Appraisal Group Hawaii, Inc. June 30, 2004 Ms. Monica Mallick Re: Appraisal of the Fee Simple Interest in TMK (3)-1-5-2: 24, Commercial Property Located in Pahoa Village, Hilo, Hawaii. File Number: HC47A002C4. Dear Ms. Mallick: Attached is our appraisal of the above property. The purpose of the appraisal is to estimate the market value in the fee simple interest in the subject property for planning purposes. Market Value means "the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: I . Buyer and seller are typically motivated; 2. Both parties are well informed or well advised, and acting in what they consider their own best interests; 3. A reasonable time is allowed for exposure in the open market; 4. Payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and 5. The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale."' Source. Federal Reserve System under 12 CFR. Part 225 Appraisals, 225.62 Definitions 0. FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 Market Value As -Is means "an estimate of the market value of a property in the condition observed upon inspection and as it physically and legally exists without hypothetical conditions, assumptions, or qualifications as of the date of inspection."' Fee Simple Estate is defined "as absolute ownership unencumbered by any other interest or estate, subject only to the limitations impaired be the governmental powers of taxation, eminent domain, police power, and escheat."' Appraisers were informed of a former cane production plant located in the vicinity of the subject property and are unsure as to the veracity of this information. Per discussion with owner, no environmental issues with the subject property exist. Unless otherwise stated in this report, the existence of hazardous material, which may or may not be present on the property, was not observed by the appraiser. The appraiser has no knowledge of the existence of such materials on or in the subject property, or in any properties in the immediate neighborhood. The appraiser is not qualified to detect such substances. The client may wish to seek expert advice in this matter to ensure her security. In conversations with brokers in the area, Pahoa's commercial real estate market is unpredictable. One agent frankly indicated that in twenty years of selling properties in Pahoa, he's never been able to identify a consistent trend, especially in the commercial real estate arena. Because of the generally few commercial real estate sales available to both real estate brokers and appraisers alike, it is difficult to accurately represent the commercial real estate market in this area. Appraisers have completed a thorough report, presenting demographic, economic and other statistical data which suggests Puna, as the rest of the state, is experiencing economic growth. To the exact degree this is affecting commercial real estate values in the area remains largely difficult, mainly because of lack of inventory. The sales used bracket the subject property and are considered the best available, providing a reliable indication of the subject's value. The appraiser has attempted to find the most current and similar comparables. Sales used that may be some distance away are judged suitable as the principle of substitution applies-e.g., a typical buyer would seek to purchase a property in either of the separate areas, as they have similar economic and physical attributes. Additional sales were considered but no other sales are known to exist that would alter the value estimate. A small section of the commercial site is registered as a historic site. This area has the potential as an attraction to the commercial area and could contribute to value. This potential is not valued in this appraisal due to lack of paired sale statistical evidence. The estimated marketing and exposure time for the subject property is one to three years, which includes a typical escrow period. Source: Federal Reserve System under 12 CFR, Part 225 Appraisals, 225.62 Definitions 09. 'Source The Dictionary of Real Estate Appraisers. Fourth Edition, Appraisal Institute. FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEV (3)-1-5-2: 24 We have appraised the subject property "as is," addressing the Sales Comparison Approach. The Income Approach is not used due to the lack of date necessary to determine G.R.M. for vacant land. Based upon our analysis and subject to the attached limiting conditions, it is our opinion that the market value of the fee simple interest for the subject property as of June 18, 2004 was: EIGHT HUNDRED TEN THOUSAND DOLLARS $810,000 The attached documents and certifications constitute a Complete Appraisal in Self -Contained format that describes the essence of the appraisal. It has been our privilege to assist you in this matter. Thank you for the opportunity to be of service. Sincerely, Stewart H. Hussey Certified General Appraiser License Number 540 Expiration date: 12/31/2005 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEV (3)-t-5-2: 24 TABLE OF CONTENTS Certificateof Appraisal.........................................................................................................6 Summary of Salient Facts and Conclusions..........................................................................8 Functionof the Appraisal.................................................................................................... 10 Scopeof the Report .............................................................................................................10 Definition of Market Value................................................................................................. I 1 Definition of Market Value As-Is........................................................................................ 12 Forces Affecting Real Property Values...............................................................................13 Stateof Hawaii.................................................................................................................... 13 The Engines of Economic Production................................................................................. 15 TheIsland of Hawaii...........................................................................................................19 East Hawaii & Puna Markets..............................................................................................29 PropertyDescription............................................................................................................45 LandValuation....................................................................................................................60 Reconciliation..........................................................................................82 Marketing and Exposure Time.............................................................83 Appendices.......................................................................................................................... 88 Lawrence Appraisal Group Hawaii, Inc. Page 5 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 CERTIFICATE OF APPRAISAL The undersigned hereby certify: That the statements of fact contained in this report are true and correct. That the reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are our personal, impartial, and unbiased professional analyses, opinions and conclusions. That I have no present or prospective interest that is the subject of this report, and no personal interest with respect to the parties involved. That 1 have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. 4. That my engagement in this assignment was not contingent upon developing or reporting predetermined results. That my compensation for completing this assignment is not contingent upon the development of reporting of a predetermined value or direction in the 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. That my analyses, opinions, and conclusions were developed, and this report has been prepared in conformity with the Uniform Standards of Professional Appraisal Practice. That I have made a personal inspection of the property that is the subject of this report. Ms. Laura Baurin provided significant assistance to persons signing this report. Her role included researching and selecting comparables, performing analysis and estimating final value conclusion subject to change from senior appraiser. 1, Stewart H. Hussey, certify that to the best of my knowledge and belief, 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. :• I, Stewart H. Hussey, certify that the use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. Lawrence Appraisal Group Hawaii, Inc. Page 6 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 As of the date of this report, 1, Stewart H. Hussey, have completed the continuing education requirements under the continuing education program of the Appraisal Institute and the State of Hawaii. That I have the knowledge and experience to complete this appraisal and have appraised this property type before. 117 Stewart H. Hussey Certified General. Appraiser License Number: CGA #540 Expiration Date: 12/31/2005 Lawrence Appraisal Group Hawaii, Inc. Paee 7 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 SUMMARY OF SALIENT FACTS AND CONCLUSIONS OWNER: Monika Mallick PROPERTY: Tax Map Key (3)-1-5-2: 24, consisting of a commercial and residential zoned vacant lot. 2.99 acres are zoned commercial and 37,060 square feet are zoned residential. LOCATION: Lot I -B -I & 3 Pahoa Village, Pahoa, Hawaii. LEGAL DESCRIPTION: Lot I -B-I & 3, por. of Pahoa Village, Puna, Hawaii CENSUS TRACT: 0211.00 UTILITIES: Telephone, electricity and public water are connected. Waste disposal is by private septic system, typical of the market area. ZONING: CV -10 (Commercial Village, 10,000 S.F. minimum). CONFORMITY: Site is considered legal conforming as it meets current zoning ordinances. EASEMENTS: Typical utility, which do not appear to have an adverse impact on the subject. HIGHEST & BEST USE: Subdivision into maximum number of lots permitted by zoning ordinances and commercial development. Interm/present use: parking. CURRENT LISTING: The subject was purchased by current owner for $84,430 on January 18, 2001. Recently, the subject received an offer at $1,200,000 but it fell through. It is now listed in the multiple listing service at $1,500,000. No other known listings or sales have occurred in the last five years. FEE SIMPLE VALUE: DATE OF VALUE: DATE OF REPORT: APPRAISER: TAX I.D. #: $810,000 June 18, 2004 June 30, 2004 Stewart H. Hussey, CGA #540 99-0302675 Lawrence Appraisal Group Hawaii, Inc. Paste 8 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 THE APPRAISAL PROCESS A systematic process involving the research and collection of data followed by an analysis and reporting of the salient facts constitutes the backbone of estimating the market value of real property. With this estimate of market value being the focus of an appraisal, a plan is formulated which will lead to a logical solution. Supporting data are gathered, classified, and analyzed to provide the value estimate. In the process, three approaches to value are considered: the Cost Approach, the Sales Comparison Approach and the Income Approach. Only the Sales Comparison Approach is used. The Income Approach is not used due to the lack of data necessary to determine G.R.M. for vacant land. The Sales Comparison Approach (also called the Market Approach) involves the comparison of sold and listed properties (comparables) considered similar to the subject in order to provide a basis for determining the subject's fee simple market value. The following steps were made in arriving at the final value estimate included in the appraisal report: A preliminary search of all available resources, first utilizing existing file data, was made to determine market trends and influences as well as other significant factors pertinent to the subject property and the value estimate. > A physical inspection of the property was performed. Although due diligence was exercised while at the property, the appraiser is not expert in such matters, as pest control, structural engineering, hazards, etc. No warranty is implied for these items. The client may wish to seek expert advice in these matters to ensure their security. r Research and collection of data (costs, improved sales, escrows, listings and income data) as present in the subject marketplace and sufficient in quantity to express an opinion of value as defined herein. Pertinent data is contained in this report or held in file. No data was knowingly omitted or was unobtainable that would impact the value of the subject. An analysis of the data collected during the gathering process was completed while employing the sales comparison approach. Reconciliation of Value A reconciliation of value obtained in the Sales Comparison Approach is made into an estimate of value in fee simple interest for the subject property. The quality and quantity of the data used is reviewed and discussed. Lawrence Appraisal Group Hawaii, Inc. Page 9 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 PURPOSE OF THE APPRAISAL The purpose of this appraisal is to estimate the fee simple interest market value of the subject for planning purposes. This report may not be used for any other purposes than those described in this report, or used by third parties. FUNCTION OF THE APPRAISAL The function of this appraisal is to assist the client in understanding the physical characteristics of the subject property and the market forces affecting the underlying real estate. SCOPE OF THE REPORT The appraisers have collected and hold on file data that is applicable in the study. Data collection involved the use of various sources available, including in-house appraisal file material. All sales and market data used in this report have been confirmed with persons involved with those transactions as available. The data collected are considered sufficient for the particulars of this assignment. Only the sales comparison approach is appropriate for this analysis. This is a complete appraisal in Self -Contained format. PROPERTY RIGHTS APPRAISED The property rights of ownership studied in this report are the fee simple interests. The fee simple title is regarded as an estate without limitations or restrictions. Anything less than the complete estate results from partial interest that is created by selling, leasing, or otherwise limiting the bundle of rights in a fee estate. An appraisal assignment may require the appraisal of fee simple title or partial interest such as a leasehold estate or an easement. The three most common types of property rights involved in the appraisal process as defined in "The Dictionary of Real Estate Appraisal," AIREA, are as follows: Fee simple estate: "Absolute ownership unencumbered by any other interest or estate; subject only to the limitations of eminent domain, escheat, police power, and taxation." 2. Leased fee estate: "An ownership interest held by a landlord with the right of use and occupancy conveyed by lease to others; usually consists of the right to receive rent and the right to repossession at the termination of the lease." Leasehold estate: "The right to use and occupy real estate for a stated term and under certain conditions; conveyed by a lease." Lawrence Appraisal Group Hawaii, Inc. Page 10 FILE: HC47A002C4; LOT 1-8-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 COMPETENCY OF THE CONSULTANTS The consultants have the appropriate knowledge and experience to complete this assignment competently. They have handled numerous studies of a similar nature over the years and have the necessary training including recent course work to do this assignment. SELF-CONTAINED This report is classified as a Self -Contained Appraisal Report in which a full explanation of results of the appraisal process is presented in all of its phases. The appraisers have attempted to provide the reader with a detailed narrative and documentation to communicate the process through which opinions of value were derived. It is a "court -ready" document that contains literally all of the data points used to complete the analysis. The reader of this report is understood to be knowledgeable of the real estate market and the conditions of these reports. No data of significance has been knowingly omitted and none is known to exist that would materially alter these conclusions. PERSONAL PROPERTY Any personal property has been excluded from this analysis. DEFINITION OF MARKET VALUE Market value is the major focus of most real property appraisal assignments. Both economic and legal definitions of market value have been developed and refined. A current economic definition agreed upon by agencies that regulate federal financial institutions in the United States of America is: "Market Value means the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 1. Buyer and seller are typically motivated; 2. Both parties are well informed or well advised, and each acting in what they consider their own best interests; 3. A reasonable time is allowed for exposure in the open market; 4. Payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and Lawrence Appraisal Group Hawaii, Inc. Page 11 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 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." DEFINITION OF MARKET VALUE AS -IS Market Value As -Is means an estimate of the market value of a property in the condition observed upon inspection and as it physically and legally exists without hypothetical conditions, assumptions, or qualifications as of the date of inspection. DEFINITION OF FEE SIMPLE ESTATE Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat 4 DEFINITION OF LEASEHOLD ESTATE The interest held by the lessee (the tenant or renter) through a lease transferring the rights of use and occupancy for a stated term under certain conditions.5 DEFINITION OF LEASED FEE INTEREST An ownership interest held by a landlord with the rights of use and occupancy conveyed by lease to others. The rights of the lessor (the leased fee owner) and the lessee are specified by contract terms contained within the lease. 4Ibid., p. 113. 51bid., p. 162. slbid., p. 161. Lawrence Appraisal Group Hawaii, Inc. Pale 12 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAx MAP KEY (3)-1-5-2: 24 FORCES AFFECTING REAL PROPERTY VALUES Four Forces In order to arrive at an opinion of value for any given parcel it is the appraiser's responsibility to assess the four basic factors that influence real property values: economic, social, political and environmental. Each of these factors will be considered separately in this analysis. Long Range View Required In order to gain a clearer perspective on longer -tern trends and attempt to avoid distortions that can be caused by use of data limited to a narrow time frame, the appraisers have researched comparable real estate sales, economic data and social demographics from 1980 through the present. The appraisers have also attempted to describe political and environmental factors that could affect subject property values. An extensive effort has been made to identify significant trends affecting real estate values --and to isolate (where possible) census tract and other data that is specific to the East Hawaii market. East and West Hawaii Data Because of the striking differences between East and West Hawaii in their social, economic, political and environmental characteristics, the appraisers have viewed with particular caution overall Big Island statistical indicators. While valid for the Big Island as a whole, their use in this analysis has been constrained to area indicators only, with East Hawaii data driving opinions of value. Presentations of relevant State and Big Island trends will be followed by a more expansive look at factors affecting the East Hawaii market. STATE OF HAWAII Introduction Many of the issues facing Hawaii today are direct reflections of the state's unique island history. Hawaii is relatively new to statehood, having been admitted to the Union in 1959. As a result, many of Hawaii's social, economic, political and environmental structures or institutions are still in relatively early stages of development. At the same time, the Islands have a long history of strong central authority—from the Alii through Big Five domination to a powerful state establishment and legislature that in recent years has been heavily influenced by trade unions. A common thread running through Hawaii's history appears to be undue influence (or at worst outright domination) of the whole by a particular group. The result has too often been excesses, which have worked to the detriment of the whole. Lawrence Appraisal Group Hawaii, Inc. Page 13 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 Colonial and Plantation History A significant element of Hawaii's heritage is related to a colonial period in which developed economies were seeking raw materials in undeveloped areas (often from territorial possessions) that could be cheaply obtained and then either consumed or converted into end products in their own economies. Initially, raw materials from Hawaii took the form of ironwood, koa and other hardwoods, which the Hawaiian chiefs (Alii) readily sold to enterprising visitors to the islands. As sugar and pineapple plantations grew in importance, workers were imported for these labor intensive industries from China, the Philippines, Portugal, Japan and elsewhere in the Pacific basin, with plantation management providing subsistence wages, housing and other amenities. As was typical of the period, workers were not well -organized or represented, and vulnerable to exploitation. The rich cultural heritages that comprise Hawaii represent one of the most culturally diverse populations in the United States. Impact of Plantation and Union Dependencies History suggests that the systematic social and economic dependencies created during the plantation era may have had the unintentional effect of slowing the development of a more robust and diversified economy. Dependencies have shifted in the past few generations from reliance on plantation management to the protective umbrella of strong unions. In the past few years, both the public and private sectors in Hawaii have been encumbered by legislative actions largely motivated by loyalties to union interests. Unfortunately, this has exacerbated the lack of balance, in which a major constituency of Hawaii's economy—the entrepreneurs who may have the financial or human capital to create jobs—are put in a position where the risk factors and financial overheads in Hawaii mitigate against the commitment of financial or human capital. This has directly affected real property values in the subject's market. Again, the November 2002 elections may well be the beginning of a period of greater balance between the forces of economic production (particularly with respect to sources of capital, entrepreneurial initiatives and the labor force). Need for a Balanced Two Party Political System As generations followed the same path, education and acculturation stimulated a need for something more, and the pendulum swung from one-sided dominance by plantation management (and in the early days of Hawaii's statehood, dominance by the Republican party) to strong union movements and loyalties which eventually lead to the Democratic party's dominance in the state. Neither circumstance has provided the State with the "checks and balances" required to create a truly democratic system with a strong and balanced economy. As Hawaii matures as an island community, the need for respectful acceptance and balance between its diverse constituents will become crucial in order for the state as a whole to prosper. Recent election results—with a Republican governor for the first time in over 40 years, and both the Senate and House controlled by Democrats—hold out the promise of a more balanced political system in Hawaii. Lawrence Appraisal Group Hawaii, Inc. Page 14 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 Sovereignty Issue Casts Shadow on Real Property Values Another issue that is an offshoot of Hawaii's colonial history, and that could have a significant impact upon real estate values in the future, is the growing significance of the Hawaiian sovereignty issue: What compensation should be given to native Hawaiians for the 1.35 million acres (33 percent of Hawaii's total land mass) which belonged to the Kingdom of Hawaii before they were ceded by federal authorities in 1898. Before Governor Cayetano's term ended, he indicated that he backs the Hawaiian's push for sovereignty but has resisted claims for monetary compensation. "We must all remember that this beautiful place we call home was once their kingdom. Few dispute that their land was stolen. And along with their land, their economic base, their culture, their language and their dignity. We must make amends to Native Hawaiians," ex -governor Cayetano concluded. "Justice demands it." The Lingle administration also appears supportive of efforts to address these issues. While the sovereignty movement has not yet coalesced, (the movement is under 10 years old) an essential objective of many proponents of sovereignty is control of ceded lands. The state's courts have been wrestling for years with the issue of whether the Office of Hawaiian Affairs is entitled to a percentage of gross revenues from these lands, and what that percentage should be. Other questions regarding fee simple "bundle of rights" which may pass to Hawaiian descendants are sure to follow. Of particular note are recent efforts to pass legislation at the U. S. Congressional level, notably the "Akaka Bill" that is designed to establish a process aimed at self -governance for Native Hawaiian. It is too early for predictions regarding the outcome of this movement. One thing is clear, however. The uncertainty that is likely to exist for several years may well affect many investors' willingness to commit resources to those areas in the state where such questions exist. THE ENGINES OF ECONOMIC PRODUCTION Any economy is dependent upon the following four elements of production: Land, Labor, Capital and Entrepreneurial Skill. The following paragraphs briefly address each of these "engines" of economic production for the State of Hawaii. Land While there are obvious limits on this agent of economic production in Hawaii, there is still a reasonable supply of land available for development within the state. The demise of most plantations is requiring a re -thinking of current land uses; and, as noted, the sovereignty question looms large, raising basic questions about ownership of Hawaii's real estate. Lawrence Appraisal Group Hawaii, Inc. Pau 15 FILE: HC47A002C4; LOT 1-113-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 Labor A significant portion of Hawaii's labor pool was created to serve labor-intensive industries that are now, with few exceptions, history. Finding new jobs for displaced workers and re-training them is a major challenge for the state. And while tourism is becoming an ever more important factor in the state's economy, the tourist industry alone will not be able to provide enough jobs to replace those lost by plantation closings, military cutbacks, and other areas of the economy. Hawaii lost close to 15,000 jobs from 1992 through 1995, when total civilian employment bottomed at 542,000. However, by the end of the year 2003 employment has recovered from that low to about 603,000. The state's unemployment rate is another indicator confirming the state's emergence from years of economic stagnation. This indicator is particularly important to the present analysis, as it is one of the key economic indicators that can be broken down for the Big Island and Hilo markets, which will be analyzed later in the report. The following chart shows Hawaii's cyclical unemployment trends since 1980. State of Hawaii %Unemployment (Annual Average) M TO W We 2.0 1.0 MIS oPo�°4'1(1p'10 4D b �ti4s��p4sh4so�A41'11P'c4°cQ�cQ�cQ� For the first time in thirty years, Hawaii has entered a new decade with a favorable trend in its unemployment rate. The 1980's saw a peak unemployment rate of 6.9 percent in 1982. The remainder of the 80's was characterized by continued strengthening of the economy—and, toward the end of the decade, a sharp spike upward in real estate prices fed by the influx of foreign currency. By 1989, the unemployment rate had reached an all time low of 2.6 percent. Lawrence Appraisal Group Hawaii, Inc. Pau 16 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 The 1990's also saw a trend upward in the unemployment rate from the beginning of the decade. The state's rate went from 2.6 percent in 1989 to a high for the '90's of 6.8 percent in June 1997. It has dropped significantly since that time with a 3.9 percent unemployment rate for year's end 2003. Capital and Entrepreneurial Skill Hawaii has traditionally depended in some degree upon out of state capital to fuel its expansion. While the state's two biggest resident banks, First Hawaiian and Bank of Hawaii, have a total of about $19 billion in assets, this is nowhere near the capital necessary to drive steady economic growth in the state. Furthermore, much of the available capital of these two lending institutions is directed towards residential and consumer loans, with relatively few commercial or business loans. Mainland banks and lenders from other countries have been important sources of investment capital for Hawaii. Within the past few years, there has been a significant infusion of capital from the mainland—especially from newly created wealth connected with the technology sector from Silicon Valley in the San Francisco Bay area to Seattle. This recent wave of investment capital has contributed to a turnaround in single-family home prices in many Hawaiian markets beginning in late 1997. It is also rekindling interest in the development and marketing of commercial properties. Much remains to be done, however, to improve the economic climate in Hawaii over the longer pull. A recent issue of First Hawaiian Bank's "Economic Indicators" cited research emphasizing the penalties associated with Hawaii's high cost of doing business. (Examples: Hawaii has the fifth highest tax rates in the United States, among the highest Workers Compensation insurance rates, is one of the few states to require payment of 100 percent of medical insurance costs for full-time employees, and has a total cost of living that is 25 to 40 percent higher than in most other states). A regression analysis done by First Hawaiian Bank's research department showed that higher costs mean fewer jobs. 1991-1995 data show even greater correlation than previously thought between high costs and fewerjobs created, with Hawaii seriously lagging other states. In the past few years, some progress has been made in overcoming these problems. The State's legislature and county governments are both making attempts to reduce disincentives of red tape, heavy taxes and cumbersome permitting processes. Efforts toward civil service reform also augur well toward creating a more "business -friendly" environment. There also appears to be a growing resolve to improve Hawaii's perennially low educational performance, as there is a broad recognition that Hawaii cannot be competitive in global markets without strengthening its educational systems. As these initiatives take hold and new incentives for commitment of capital are developed, there will be fewer inhibiting influences upon the state's economic growth—and on the value of real property. Lawrence Appraisal Group Hawaii, Inc. Paee 17 FILE: HC47A002C4; LOT 1-13-1 & 3 PAHOA VILLAGE; TAX MAP KEv (3)-1-5-2: 24 The Future Because Hawaii is becoming increasingly dependent upon tourism as a mainstay of its economy, the state must make its tourist amenities more attractive and competitive in order to appeal to tourists who have a plethora of choices. Efforts must also be made to diversify the state's economic mix to assure the state's long-range economic prosperity. While the health of our visitors' economies is important to the state (especially the health of the California and Japanese economies), other initiatives in the fields of communication, health, astronomy and other high tech industries will place Hawaii's future more firmly in the hands of those who live and work here. The state's construction sector is definitely rebounding after years of declining construction starts. State of Hawaii Building Permits $ Amount (DBEDT) —Pob. ($ Amount) 0 2,300,000 0 r 2,100,000 N 491,900,000 E 1,700,000 m d 1,500,000 w 0 1,300,000 1,100,000 900,000 700,000 Ne �° e^ �� �° �° �`' �6 �^ �� �`� cp° cis^ cps cp° After construction activity peaked in 1991, there was a continuous slide from over $2 billion a year to less than half that level in 1998. For the past two to three years, capital is once again being invested in Hawaii's real estate, resulting in a strong showing for 2003 ---over $2.0 billion in new building permits. While many economists are still cautiously estimating growth at 1.0 to 1.5 percent for the next two years, indicators such as the declining unemployment rate and rebounding construction industry suggest that the state is clearly emerging from one of the longest periods of recession Hawaii has known. As we move through the first decade of the 2000's, few economists foresee the state experiencing the magnitude or intensity of the growth spurts that characterized the end of the Lawrence Appraisal Group Hawaii, Inc. Page 18 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEV (3)-1-5-2: 24 1980's. When Hawaii reaches a point where a healthy and representative balance is established between ALL of its key stakeholders, the state's economy will attract all of the elements of economic production and truly prosper. There is every reason to believe that in the long term Hawaii's beauty and diversity will continue to attract tourists and those who are willing to accept the "high costs of living in paradise." THE ISLAND OF HAWAII (East and West Hawaii Differentiated) Physical Characteristics The Big Island has a land area of 4,028 square miles --larger than all the other Hawaiian Islands put together. With two mountain peaks over 13,000 feet, it also has great climatic diversity, containing most of the globe's microclimates except those in Polar Regions. The Windward side of the island, with an average annual rainfall over 120 inches in Hilo, provides a base for orchid, anthurium and other tropical plant and fruit growers. Rainfall results in over a billion gallons of water a day pouring into the ocean from East Hawaii. This represents an abundant—and underutilized—resource. (Years ago the Hilo Soda Works and other water bottling companies thrived. Within the past year, the possibility of commercially bottling and marketing this resource was again raised). Over ninety percent of the island is undeveloped. While the Big Island has made significant progress with its infrastructure, there are still many areas using water catchment and cesspools and that are off electrical power or paved roads. Questions regarding "who pays" to develop infrastructure for "paper lot" subdivisions are still major political and economic considerations. Big Island Economic Characteristics Over the years, the economy of the Big Island has shared many of the characteristics of the State of Hawaii's economy, which in turn has tended to lag the mainland's (and more recently Japan's) economic trends. Many economic indicators peaked in 1989-91 for the Big Island, with generally downward trends developing until mid-1997 or early 1998. There are continuing indications of different real estate trends in East and West Hawaii. While both East and West Hawaii are seeing some improvement in numbers of single-family sales and in median sales prices, the market in East Hawaii is not rebounding as quickly as in West Hawaii. (East Hawaii prices have traditionally been more modulated and less volatile than prices in West Hawaii). In the past three years, West Hawaii has shown significant increases in both sales volumes and real estate prices—in some areas at the rate of 15 to 20 percent per year. A similar but more modulated trend has been occurring in East Hawaii in most markets, with the inventory of single-family homes dropping from close to a three-year supply down to less than a six -month's supply in some markets. In recent months the volume of sales and median price of single-family homes in East Hawaii have risen anywhere from a low of four percent to more than ten percent over prior year levels. It is clear from these trends that the Big Island and East Lawrence Appraisal Group Hawaii, Inc. Pau 19 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEv (3)-1-5-2: 24 Hawaii single-family home markets are well into a real estate recovery. However, this trend is not yet evident in prices of commercial, industrial or hotel -resort properties. County ofHawaii--Valueof Private Building Permits Issued ($000's) (Source: DEBDT) $625,000 o $575,000 $525,000 9 $475,000 e $425,000 a $375,000 $325,000 a` $275,000 '8 $225,000 $175,000 A > $125,000 $75,000 $25,000 `'�b ^oPe4b21 z N IV °5 b` S'�`°�A�� cQ°cQ�cQ�cA� The above chart shows a strong upward surge in the value of private building permits, pushing values above the long-term trend line for the first time in five years. Construction expenditures—primarily residential—continue strong, with a 23% increase from year 2002 to 2003. The chart on the following page shows steady job growth (averaging close to three percent per annum) on the Big Island during the past 20 years, and an unemployment trend that reflects the downturn in the state's economy in the early 1990's. The employment trend roughly parallels the growth rate in the island's population, which also was near three percent during the same period. The past two to three years have shown even more rapid growth in employment, as encouraging developments such as Hilo's new Foreign Trade Zone, C. Brewer's relocation of its headquarters to Hilo, and UH-Hilo's High Tech Park, which already has three astronomy research facilities and a data processing capability larger than Maui's super computer. These developments have resulted in a recovery that has increased Hawaii County's number of employed to a level at 69,050 at the end of 2003. While significant progress has been made in reducing unemployment levels, they remain well above state and national levels and represent a continuing challenge to the local economy. Lawrence Appraisal Group Hawaii, Inc. Palle 20 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 County of Hawaii Employment & Unemployment Rate (Source: DBEDT) 75000 70000 65000 60000 i 55000 w 50000 `m E 45000 = 40000 35000 30000 t* Errployed --% Unemployed tt to xp0e%'-J,%ed%A0e CPaeas9?0 cpeAa4CP &oti e�q^p^pp�b NC6 Ncb9gpp�c� �q9ti o'10tios m it 0 E E m c An encouraging trend for Hawaii County is the increase in diversified agricultural activity -- especially tropical plant production. Flower and nursery product sales have grown significantly since 1980, increasing from $12,089,000 to $47,491,000 by the end of 2002 (latest available data). At the same time, livestock and crop sales have been increasing from the lowest 1996 figure of $16,732,000 to $25,867,000 by the end of 2001 (last available data). p 55000 O X 50000 H d 45000 ; U) 40000 V 35000 10 230000 IL 25000 c 1O 20000 U) m 15000 N i000a Count of Hawaii Livestock Flowers/Nurse Products —FSvmos or Y rY �i�e.m �x (Lawrence Appraisal Group, Hawaii Inc.) sveme of Nursery aroaucu Lawrence Appraisal Group Hawaii, Inc. Paae 21 FILE: HC47A002C4; LOT 1 -B -I & 3 PAHOA VILLAGE; TAX MAP KEv (3)-1-5-2: 24 THE MAJOR FORCE BEHIND HAWAII'S ECONOMY --AN EXAMINATION OF KEY TOURISM INDICATORS Hawaii has long been subject to economic and political forces well beyond its shores—not just those of Japan and the western United States, but by global sea changes such as "911" and its aftermath. The resort -hotel industry is particularly vulnerable to fluctuations in visitor counts caused by these external forces, as residents of Hawaii—the "Kamaina market"—are a relatively small part of Hawaii's tourism mix. Thus, trends in airline passenger arrivals, hotel occupancies and average daily hotel room rates ("ADR's") become critical indicators of the profitability and long-range health of this important market segment. These measures of the vitality of Hawaii's tourist markets vary widely throughout the state. Not surprisingly, the island of Oahu has by far the best results in these crucial tourism indicators. Historical development of Hawaii's tourism market has long been centered on Oahu, "the meeting place." As the largest population center in the state, Oahu's tourism products are being continuously upgraded, with the island benefiting from a new convention center, substantial airport expansion and improvements, numerous park and beachfront improvements, infrastructure investments, zoos, and soon a new aquarium. The State also has a concentrated public sector advertising and promotion campaign focused on Oahu, as well as a climate that is less extreme than that of many other islands because of a lower central mountain range. The following indicators affecting the health of Hawaii's Tourism industry will be addressed: ➢ Overseas Airline Passenger Arrival Trends ➢ Inter -Island Airline Passenger Arrival Trends ➢ Hotel Occupancy Rates ➢ Average Daily Room Rates (ADR's) Flight Patterns—How Each Island Fared Overseas Airline Passenger Arrival Trends Overseas Airline Passenger Arrival Trends—Oahu In 1970 over two million overseas passengers (2,082,965 per State of Hawaii Department of Transportation statistics) deplaned at the Honolulu International Airport. By 1980 passengers into Honolulu more than doubled to about 4.2 million. By 1990 the number of international passengers deplaning in Honolulu rose 56% to about 6.5 million. The impact of "911" and the opening of international airports on Maui and Kauai are clearly seen in the decline of Oahu's recent deplaning passenger numbers, which have fallen from a range of 6.0 million to 6.8 million arriving in each year during the 1990's to about 5.7 million in 2001 and 5.8 million in 2002. Lawrence Appraisal Group Hawaii, Inc. Pae,e 22 FILE: HC47A002C4; LOT 1-13-1 & 3 PAHOA VILLAGE; TAX MAP KEv (3)-1-5-2: 24 Overseas Airline Passenger Arrival Trends—Maui In 1990 the number of deplaning passengers on overseas flights into Kahalui, Maui (which began in 1983) were at about 567,000. The 1990's saw continued steady growth in the arrival of overseas passengers to just over a million arrivals in the year 2000. Maui has resisted the downward tendency of "911" with a growth rate of about 11% to 1.1 million overseas passengers arriving in 2002lose to 20% of Oahu's arrival numbers in 2002. Overseas Airline Passenger Arrival Trends—Kauai The Lihue, Kauai airport shows a more robust pattern—but with a much smaller base. In 1990 deplaning overseas passengers at Lihue numbered about 75,000. By the end of 2000 this level had climbed to 103,000 passengers—a 38% increase. Sharing the same positive trend as Maui since "911," Lihue has seen continued growth to a level of about 177,000 at the end of 2002—a 72% increase over the year 2000. (Again, to keep this number in perspective, this figure is about 3% of Honolulu's 2002 overseas passenger arrivals.) Overseas Airline Passenger Arrival Trends—Kona The number of overseas passengers deplaning at the new Kona International Airport was close to 120,000 in 1990, growing to more than 316,000 passengers deplaning in the year 2000. Overseas traffic into the Kona International Airport continues to grow, with 2002 statistics indicating close to 365,000 passengers deplaning during that year (about 6% of Oahu's arrivals). Overseas Airline Passenger Arrival Trends --Hilo Hilo's activity as an international airport was short-lived. Department of Transportation statistics indicate that 107,844 passengers from international flights deplaned at the General Lyman Airport at Hilo in 1970. By 1980 that number had dropped over 20% to just over 80,000 airline passenger arrivals (about two percent of Honolulu's volume in the same year). By 1986 direct overseas flights to Hilo's International Airport were discontinued. The following chart summarizes the above descriptions of overseas airline passenger arrivals on the Hawaiian Islands. Lawrence Appraisal Group Hawaii, Inc. Page 23 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 Overseas Airline Passenger Arrivals --By Island 7,000,000 6,000,000 — Oahu 5,000.000 — Maui 4,000,000 Kona 3,000,000 — Kauai —Hilo 2,000,000 1,000,000 The number of arriving overseas passengers on Oahu is over six times that of Maui• and over 77% of the entire state's overseas passenger arrivals. Hilo's overseas flights were terminated in 1986. 8,000,000 7,000,000 8,000,000 5,000,000 4,000,000 3,000,000 Overseas Airline Passenger Arrivals --State The above chart shows that total overseas passenger arrivals to the State have yet to recover from the effects of "911," as 2002's numbers are still 7% below year 2000 levels. Lawrence Appraisal Group Hawaii, Inc. Page 24 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 Flight Patterns—How Each Island Fared Inter -Island Airline Passenger Arrival Trends Inter -Island Airline Passenger Arrival Trends—Oahu In 1970 just over 1.1 million inter -island passengers deplaned at the Honolulu International Airport per DBEDT data. By 1980 inter -island passengers into Honolulu more than doubled to about 2.9 million, and by 1990 had reached 4.5 million passengers a year. In 1996 traffic into Honolulu peaked at about 4.9 million, then fell to a level of about 4.8 million in the year 2000. The impact of "911" and of the opening of international airports on Maui and Kauai are clearly seen in Oahu's recent inter -island deplaning passenger numbers, which have fallen sharply since the year 2000 to about 4.0 million in 2002. Inter -Island Airline Passenger Arrival Trends—Kauai The Lihue, Kauai airport shows a similar pattern to that of Kona—but with a base about twice the size. In 1970 deplaning inter -island passengers numbered about 557,000. By the end of the year 1990 this level had climbed to about 1.35 million passengers—nearly a three -fold increase. Unfortunately, hurricane Iniki dampened Kauai's continued growth, with arriving inter -island passengers only recently (and briefly in 2002) approaching the 1.35 million -passenger level. At the end of 2002 Lihue's inter -island arrivals had dropped to 1.1 million. Inter -Island Airline Passenger Arrival Trends—Maui In 1970 the number of deplaning passengers on inter -island flights into Kahalui, Maui was about 585,000. By 1980 that figure had jumped to 1.5 million, and by 1990 to about 1.9 million. Kahalui's inter -island air traffic peaked in 1995 at just over 2.2 million passenger arrivals, with five of the last 12 years showing declines—the greatest of which have occurred in the two years since "911." . In 2002 Maui's deplaning passengers had fallen to about 1.6 million just over 1980 levels—with the steepest declines having been experienced during the past two years. These losses have been partially—but not totally—offset by the increasing levels of overseas arrivals at the Kahalui Airport. Inter -Island Airline Passenger Arrival Trends—Kona Per DBEDT statistics the number of inter -island passengers deplaning at the Kona Airport in 1970 was 268,000. By 1980 about 538,000 inter -island passengers arrived annually, with volumes peaking in 1996 at just fewer than 1.1 million passengers. The remainder of the 1990's remained at about the same level, with a 13% drop to about 935,000 inter -island passengers flying into Kona in 2002. Inter -Island Airline Passenger Arrival Trends—Hilo Hilo has traditionally had the lowest inter -island passenger arrival data of any airport in the state. Even before Kona's international airport opened in 1983, Hilo had a lower number of deplaning passengers in the decade 1970-1980 (an average of 512,000 per year versus Kona's 538,000. As the decades past, Hilo fell further behind Kona (the second lowest inter -island passenger arrival airport in the state of Hawaii) with an average of 740,000 passengers during the 1980's versus Lawrence Appraisal Group Hawaii, Inc. Pate 25 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 Kona's 962,000 during the same period. Hilo's inter -island air traffic peaked in 1997 with 849,000 passengers, and has fallen each year to a level of 698,000 during 2002. The chart below summarizes each island's Inter -island passenger arrival trends. Inter -Island Airline Passenger Arrivals --By Island 5)[100,000 4;500,000 — Oahu 4)300,000 —Maui 3;500,00 Kauai 3)300,000 -- Kona 2;500,000 — Hilo 2 AOO,000 1 ,500,000 1 A00,000 -- - - - - 500,000 _ 0 Oahu has by far the largest share of the "Inter -Island" deplaning market, which is logical as there are relatively few direct flights between neighbor islands. Maui, in second position, has less than half the deplaning passengers of Oahu, with Kauai and Kona in third and fourth position and Hilo dead last. Significantly, none of Hawaii's airports has recovered from the impact of -911" in the context of the Inter -Island market. Another factor currently exacerbating the neighbor island tourism market is recent inter -island fare hikes that have sharply increased the cost of inter -island travel within the state. This is a serious problem that is already having an impact on the amount of inter -island travel done by businesses and residents of Hawaii. Tourists—and more importantly travel agents and other wholesalers are realizing that itineraries with multiple island destinations are costing them significantly more than in the past—especially families on "budget vacations" who would experience a significant multiplier effect. Lawrence Appraisal Group Hawaii, Inc. Page 26 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEV (3)-1-5-2: 24 11,000,000 10.500.000 10.000,000 9,500,000 9,000,000 8,500,000 8,000.000 7,500.000 7,000,000 6,500,000 6,000,000 ^goo X900 9�0 9�^ ,9,ry 19gq ^9pa ^99h ^q& 9°j^ ^9�e ^999 ry000 01^ ry�ry Inter -Island Airline Passenger Arrivals --State These charts highlight part of the State's challenge to remain competitive in today's global tourism markets. Inter -island flights (shown above) are down over 17% from year 2000 levels, overseas flights are down over 7% (shown on earlier chart), and the combined state total overseas and inter -island passenger arrivals (shown below) are down 12.7% from 2002 levels. The State faces a significant challenge in reversing these trends. State --Total Overseas & Inter -Island Passengers Deplaned zo,0oo,000 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 ti� ry�� ry�ti Lawrence Appraisal Group Hawaii, Inc. Paee 27 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEV (3)-1-5-2: 24 Hotel Occupancy Rates by Island % Occupancy Rates by Island 90.00% 80.00% 70.00% Oahu _-- �_. -- - — — Maui 60.00% Kauai 50.00% -- Hawaii 40.00% — Molokai 30.00% -10 The above chart (source: PKF Hawaii) shows occupancy rates generally climbing in the late 1990's and peaking in the year 2000. (The one exception to this trend is Molokai, which has steadily moved from a low of 37% occupancy in 1995 to about 53% in mid -2003.) The dampening impact of "911" is clearly seen for all islands except Molokai. The Island of Hawaii has consistently ranked lowest in occupancy rates for the four major island tourist destinations. The 8.5 -year average occupancy percentages for Hawaii are 2.34% lower than Kauai, 7.83% lower than Maui, and 10.14% lower than Oahu. As will be shown in subsequent data, while Big Island occupancy rates are lowest in the state, West Hawaii hotels fared much better than their counterparts in East Hawaii. Lawrence Appraisal Group Hawaii, Inc. Paee 28 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 EAST HAWAII & PUNA MARKETS East Hawaii and Puna are undergoing significant economic restructuring. With the passing of sugar plantations on the Hamakua Coast, Puna and its surrounding areas are moving toward a mix of smaller cottage -industry activities, a growing University of Hawaii at Hilo student population (with a goal of more than double the present student body of about 2,500 students to 5,000 students within five years), a growing world-class astronomy community centered in the university's technology park, diversified agricultural activities such as exotic flowers and forestry products, and telecommunications and computer networking companies. The recent move of C. Brewer's headquarters to Hilo is another harbinger of land use changes that will stimulate economic growth. These developments should have a positive effect on the areas economy and the areas hotels over the longer term. There are indications that capital is once again coming into Puna, in the form of single-family housing and commercial property purchases and/or construction, contributing to the economic revitalization in Puna and in particular the town of Pahoa. With its increasing population, demand for single-family homes and public support facilities in Puna is rapidly increasing and encouraging a period of renewal and modernization. Population Hawaii County has the second highest population in the State of Hawaii with a density of 36.9 people per square mile. In 2003 Hawaii County's population stood at 158,423, with most of its residents living in South Hilo, Puna, North Kona, and South Kohala districts. Over the last five years, Hawaii County experienced population growth of 7.2 percent. The districts that have seen the fastest population growth are Puna, South Kohala, North Kohala, Kau and North Kona. Hawaii County's 7.2% growth rate has far outpaced that of the state as whole. From 1997 to 2003, the state's population expanded by a mere 2.7%. The following chart summarizes the last twenty year's population growth for the County of Hawaii. Lawrence Appraisal Group Hawaii, Inc. Page 29 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 Puna's resident population grew from 11,751 in 1980 to 20,781 in 1990, a percent change of 43%, second only to South Kohala, which grew from 4,607 to 9,140, a percent change of 49%. In the following decade (1990-2000), resident population in the Puna area grew faster than the entire Hawaii County, from 20,781 to 31,335, a 33% change. The following chart shows percent change in population growth from 1990 to 2000 for the major districts in Hawaii County. Population Growth (Percent Change From 1990 To 2000) 35% - -- 30% W25% ------ -._ ------------ c L 20% - u m 15% u a 10% — 5% 0% Q Jca �\o 1\o a��a ��a\alo ��aa r �a r e baa 2< Cop Lawrence Appraisal Group Hawaii, Inc. Paee 30 Hawaii County Population Growth 180,000 -- -- --- 160, 000 a 140,000 0 120,000 a ----- 0 100,000 - a 60,000 E ---- -- .— 60,000 z' 40,000 - -- --- - 20,000 Q4V Q4� QIP Q4`` Q,�,b QQ1 Qy4 Q,2Q QQO QQQq,L CQ QQ\p QQ� QQ�' QQq OI�vO nlp�,Lp03 \ QQ`% \ \ \ \ \ \ \\ \QQr \ \ \ \ \ \ \ \ Year Puna's resident population grew from 11,751 in 1980 to 20,781 in 1990, a percent change of 43%, second only to South Kohala, which grew from 4,607 to 9,140, a percent change of 49%. In the following decade (1990-2000), resident population in the Puna area grew faster than the entire Hawaii County, from 20,781 to 31,335, a 33% change. The following chart shows percent change in population growth from 1990 to 2000 for the major districts in Hawaii County. Population Growth (Percent Change From 1990 To 2000) 35% - -- 30% W25% ------ -._ ------------ c L 20% - u m 15% u a 10% — 5% 0% Q Jca �\o 1\o a��a ��a\alo ��aa r �a r e baa 2< Cop Lawrence Appraisal Group Hawaii, Inc. Paee 30 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 New Construction Trends Puna's growing population has given way to significant growth in single-family housing construction, primarily because vacant land is more affordable in this area than in most other county districts. In the last twenty years, the number of residential building permits issued to Puna residents has consistently held the record in East Hawaii. In 2000, Puna was second only to North Kona in terms of number of residential building permits issued. In 2001 and 2002, Puna ranked third, South Kohala second, and North Kona first. The chart on the next page is a summary of the last twenty- years residential building permits activity for the major districts of Hawaii County. Lawrence Appraisal Group Hawaii, Inc. Page 31 FILE: HC47A002C4; LOT I -B-1 & 3 PAHOA VILLAGE; TAX MAP KEY Building Permits For Residential Units 1.200 Lawrence Appraisal Group Hawaii, Inc. Pav-e 32 1,100 1 "DOC 900 800 ,OO C.O0 OC 40C 2OC 2 0 ?00 0 19e5u 1 �3D 99 ? t t 1 1 i 19 t 36b t 9 t 8t ; t 3t?>5 1899 1 ! r X93 t o 1 t 11497 14�62t 19619 X1 41r 442 353 3t51 3 7 1 110 323 391 sa 1 622 754 1 131 654 1122 3"J :tb7291 192 198 2l3�.4 3e 2136 2;5 204 451 2`_0 2`_6 3?! yj4 298 a51 ME? 354 :521! -i dkj ?G? 162 170 144 1f 3 67 14 to 4 12 S +3 7 1b 11 ' la 'a 21 15 13 14 14 t6 2 •rakL2 24 1 13 23 41 31 44 3:3 3C 55 35 S5 52 40 31 421 26 23 23 37 31 crth 6'3ha.a 21) ? ; ? = 31 31 2t 29 52 54 141 C54 15e 52 :o 35 43 30 26 23 5-0 41 �uthKOhal3 ?32 L1 161 115 217 249 131 297 72:} 53_ UdS t4 ��?_ ls) 150. N2 cy i4 106 t521 22 rth Kara 1 C�:s2a 401 2:"5 ? [7 135 2 t 9 2tS 15 +at�4 TS? 534 51 `_ 2 ;U ►;'9 ! 9 341 ' 63 2135 2t32 ] 71 uth Kara EtS `-9 C -i? 52 7D 72 6; 92 1 231 126 120 '3+3 09 53 58 52 26 40 42 41 �u c C,5 cy C-0 34 38 S4 5- 7C 134 151 1G4 1u2 95 511 61 :6 30 36 415 41 Lawrence Appraisal Group Hawaii, Inc. Pav-e 32 • • In 2000, Puna's total number of residential building permits was second only to North Kona. In 2001 and 2002, Puna kept the lead in East Hawaii but fell behind South Kohala and North Kona. The following chart is a summary of residential building permits issued in each Hawaii County district for the years 2000, 2001 and 2002. Building Residei 2000 1800 The increase in population and in single-family housing construction gave way to greater demand for additional public service facilities. By year-end 2003, Puna experienced a surge in public and private building permits. Total number of building permits issued in 2003 to the Puna area totaled 1,054, the highest figure in East Hawaii and second only to North Kona's 1,338, shown below: Total Building Permits Issued (Year 2003) 1600 1400 49 1200 1000 a c 800 600 E Z 400 200 0 a \L _ �`r �r 1600 +e- 1400- 4001200 1200--' kennits For 1000 tial Units -2002 800 600 400 200 0 Year 2000 Year 2001 Year 2002 M Pura 362 245 322 ■South Hilo 162 147 201 Morth Hilo 21 17 17 ■ Harnakua 36 33 37 ONorth Kohala 48 37 70 ■ SoLth Kohala 220 285 371 ■North Kona 716 552 447 ■South Kona 48 82 60 The increase in population and in single-family housing construction gave way to greater demand for additional public service facilities. By year-end 2003, Puna experienced a surge in public and private building permits. Total number of building permits issued in 2003 to the Puna area totaled 1,054, the highest figure in East Hawaii and second only to North Kona's 1,338, shown below: Total Building Permits Issued (Year 2003) 1600 1400 49 1200 1000 a c 800 600 E Z 400 200 0 a \L _ �`r �r 1600 +e- FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 In terms of dollar value, Puna's total was $90,207,000 by year end 2003, the highest in East Hawaii, following South Kohala's total value of $157,971,000 and North Kona's $263,334,000, shown as follows: S300000 Total Value of Building Permits Issued ( Year 2003) 50,000 - --- 00,000 50,000 00,000 50,000 - $0 _ Major Public Support Facility Projects (Puna) Puna was quickly faced with two concerns as more families were moving to the area. One was lack of more expedient infrastructure and other was lack of schools. The construction of three major projects resolved these concerns: 1) Completion of the Keaau-Pahoa bypass road; 2) Construction of the Kamehameha Schools; 3) New Keaau high school and intermediate school. The Keaau-Pahoa bypass road project was constructed to improve access for the lower Puna community to the major byways for Hilo and Volcano. Completed in March 2000 for a total cost of about $25 million, the new public infrastructure has facilitated access in and out of Puna from Keaau and more importantly from the main center of commerce in East Hawaii, Hilo. In the fall of 2001, construction of the East Hawaii Campus of Kamehameha School, a private school for students of Hawaii Ancestry, was completed. Sitting on a 300 -acre lot, purchased from W.H. Shipman, the campus is situated in Keaau and includes a gymnasium, a pool and playing fields. The K-12 school has an enrollment of approximately 2,000 students. The addition of the Kamehameha School to this particular area has added an element of prestige that is felt throughout Puna. Lawrence Appraisal Group Hawaii, Inc. Page 34 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 Recently completed was the construction of two new public schools, also situated in Keaau. The new elementary/middle school was completed in 1998 and the new high school in 2000. The high school is situated on a 55- acre lot and cost approximately $75 million to complete. Commercial Development in Pahoa Signs of economic revitalization are particularly evident in the town of Pahoa. New and local businesses are moving into this small community, new construction is on the rise and restoration of many older commercial buildings is underway. Recent developments include a new shopping center located near the northern entrance to Pahoa Village, across from the Keaau-Puna Bypass Road. The center is currently under construction and will include a general market store, hardware store, a Subway Sandwich, a gas station and other businesses. Per discussion with property owner, Marjorie Chase, the total construction cost is estimated at $2.7 Million, inclusive of site costs. In 2000 Mandela LTD Corporation spent approximately $800,000 (not inclusive of the site purchase) in building the 4,500 square foot health food store, also situated near the entrance to Pahoa Village. The successful store was awarded retailer of the year in 2003 for the Hawaii Island and is currently listed for sale at $2,750,000. Several older commercial retail/office buildings in downtown Pahoa are currently being refurbished and marketed for sale. An example is the retail grocery store, called "DA Store," which was recently refurbished for a total cost of approximately $40,000 and is currently on the market for $500,000. Across from Pahoa high school, an older 2,230 square foot ranch style home on a half - acre agricultural zoned lot was recently re -zoned commercial -village and converted into nine office units, which are currently fully rented. Total conversion costs were $200,000. This property is listed for sale at $350,000. The above projects contribute to the growing volume of construction permit values, which, as previously noted, are driving the state's economic recovery. Future plans for Pahoa include creating additional parking for businesses and the local farmer's market, a public park area, public restrooms, an amphitheatre, a museum, and bus/stop information kiosk and police station. From an article dated June 17, 2004 entitled ` Pahoa Needs Room," of the local newspaper The Tribune Herald, the Board of Land and Natural Resources will soon be discussing the construction of a fire station and police substation on 19.4 acres of state land near Pahoa located on the Keaau-Pahoa Bypass Road toward the southern exit of Pahoa Village. Additionally, the site might also accommodate a gymnasium. Lawrence Appraisal Group Hawaii, Inc. Pace 35 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEN' (3)-1-5-2: 24 PICTURES OF PREVIOUSLY DISCUSSED COMMERCIAL DEVELOPMENTS F�h7 New shopping center under construction Future Hardware Store Lawrence Appraisal Group Hawaii, Inc. Papze 36 • C� FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 PICTURES OF PREVIOUSLY DISCUSSED COMMERCIAL DEVELOPMENTS New health food store Completely remodeled "DA Store" Lawrence Appraisal Group Hawaii, Inc. Paye 37 0 0 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAx MAP KEY (3)-1-5-2: 24 PICTURES OF PREVIOUSLY DISCUSSED COMMERCIAL DEVELOPMENTS Converted ranch -style home to commercial office building Lawrence Appraisal Group Hawaii, Inc. PaRze 38 `J • FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAx MAP KEY (3)-1-5-2: 24 Market Trend Analysis Puna's Residential Market After hitting the bottom of the residential real estate market in 1998, Puna like most other districts in East Hawaii, has experienced a real estate recovery in the last six years. Median single-family home prices in East Hawaii have appreciated between 18 and 22% in the last year. In 2003, the single-family home median sale price was $115,000, a 22% annual increase from prior year's $89,900. The following chart summarizes the past ten-year market trend for single- family home sales. $120,000 $110,000 $100,000 $90,000 $80,000 $70,000 Single Family Median Prices (1993 - 2003) Puna District (3-1) Lawrence Appraisal Group Hawaii, Inc. R2 = 0.8526 1993 10 1015 1gg0 1991 100 0 2000 2001 1.06" 2003 First quarter 2004 promises a slightly higher annual increase in single-family home median sale prices if the current quarterly appreciation of 6% (percent change from fourth quarter 2003 to first quarter 2004) continues to the end of the year. The next chart analyzes the last six-year quarterly trend in single-family home median sale prices. Lawrence Appraisal Group Hawaii, Inc. Paye 39 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 $140,000 $130,000 $120,000 $110,000 $100,000 $90,000 $80,000 $70,000 $60,000 ,o Single Family Median Prices (Quarterly) Puna District (3-1) Lawrence Appraisal Group, Inc. RZ = 0.8973 ryo,�oao,�oryo,soboo�'Q�C'oryo o`�o�o�ory�ory�o ory�o ory�o 0 0�0� Commercial Market -Overview In the last year, Hawaii real estate market has not only surpassed its economic recovery stage but set a trend for the rest of the nation. In addition to a booming residential real estate market (with single-family home prices appreciating between twelve and eighteen percent in East Hawaii), the healthy retail investment market is also bolstering the trend. Six major retail centers, one on Oahu and five on Maui, totaling over 1,174,000 square feet sold at an approximate total value of $159,600,000 in 2003. On the Big Island, the 69,175 square foot Hilo Shopping Center is currently listed for sale at $6,500,000 and in Puna, as previously mentioned a new shopping center is currently under construction. Retail lease rates are also on the rise and vacancies low. A survey of thirty-two retail centers statewide show an increase in occupancy with over 180,000 square feet in positive net absorption. A good example is the Koko Marina Shopping Center (on Oahu), where occupancy rose from 86% to 97% after its purchase in January 2003. Of the 43 retail spaces in the Hilo Shopping Center only four are currently vacant. Lawrence Appraisal Group Hawaii, Inc. Page 40 FILE: HC47A002C4; LOT 1 -B -I & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 Year 2003 statistics from brokerage firm CB Richard Ellis indicate the Big Island retail market amounts to a gross leasable area of 1,609,378. The vacant area was estimated at 79,937 square feet, representing 5% of the total gross leasable area. Base rents for retail properties ranged from a low of a $1.50 per square foot per month to a high of $3.29 per square foot per month. The Big Island experienced a positive net absorption of 30,597 square feet. Although it is the retail activity in South Kohala and North Kona driving these figures, East Hawaii is experiencing similar positive activity, al -be -it not at the level of West Hawaii. Puna's Commercial Market As was previously discussed in the letter of transmittal, Puna's commercial market is largely unpredictable. The appraiser has analyzed the last twelve years of commercial sale activity in Puna by looking at median sale prices and the number of closed sales. The exponential trend lines show a positive increase in both measures, with a positive 12% appreciation in median sale prices from year 2001 to 2003. However, due to overall weak correlation (51% for the number of sales and even a weaker 11% for median sale prices), these data are considered statistically unreliable. $1,000,000 $900,000 $800,000 $700,000 $600,000 ril $500,000 e 9 $400.000 $300,000 $200,000 $100,000 $0 Commercial Property Sales (Puna 3-1) (Lawrence Appraisal Group Inc.) Ne ^mss N61 Ne NO Ne ^C1 Ne Ne 'Pe ti�� tib& ry�� A study of commercial property sales in the entire Puna area (zone 3-1) was performed on June 23, 2004 using the Multiple Listing Services. MLS data revealed five closed commercial property sales and 37 active listings. The five closed sales ranged in price from $44,000 to $2,000,000. The average sale price was $576,800 and the median sale price was $240,000. The median days on market was 733 days or two years and the median sale to list price ratio was 97%. Lawrence Appraisal Group Hawaii, Inc. Page 41 R2 = 0.5172 9 8 Median Rice 7 6 d # of Sales is 5 �I —Fxpon.(#of 4 �`u E Sales) 3 e Z —Eepon. (Median 2 Rice) 1 - 0 R2 = 0.1047 j A study of commercial property sales in the entire Puna area (zone 3-1) was performed on June 23, 2004 using the Multiple Listing Services. MLS data revealed five closed commercial property sales and 37 active listings. The five closed sales ranged in price from $44,000 to $2,000,000. The average sale price was $576,800 and the median sale price was $240,000. The median days on market was 733 days or two years and the median sale to list price ratio was 97%. Lawrence Appraisal Group Hawaii, Inc. Page 41 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 The 37 active listings range in price from $45,000 to $2,750,000. The average asking price is $527,540 and the median price is $240,000. The total sum of active listings outnumbers the sum of closed sales by seven to one, resulting in greater supply than demand. This could in turn result in a large number of withdrawn or expired listings or encourage sellers to lower their prices. CONCLUSION The Puna residential commercial real estate markets are intimately tied to the overall economy of Hawaii. As the state of Hawaii thrives, so likely will properties in this area. The market trend analysis has shown to appraisers a predictable residential real estate market with statistically reliable trend data indicating a current market appreciation between 18 and 22% for single-family homes in East Hawaii and Puna. The same appreciating trend is true for the commercial market, al -be -it with less statistical reliable trend data. State and local East Hawaii and Puna economies are growing, as seen from previously presented data, including an increasing Puna population, increasing number of building permits (private and public) and new construction of single-family residences and commercial developments. The above facts suggest to appraisers that a 12% annual appreciation for commercial properties in the subject's market is a reasonable figure. Lawrence Appraisal Group Hawaii, Inc. Page 42 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE, TAx MAP KEY (3)-1-5-2: 24 THE ENVIRONMENT Topography The bulk of the island, being a large seamount (probably the largest in the world), slopes from the top of the five volcanoes on the Big Island makai to the sea. Therefore, most of the island's terrain is sloping from gradual to very steep with most sites requiring grading and retaining wall construction. The subject area, which is a few feet above sea level, is nearly level. Location The subject neighborhood is Downtown Pahoa, bordered by the Pacific Ocean to the south, Nanawale Estates to the east, the city of Keaau to the north and the Puna Forest Reserve to the west. There is convenient highway access for transportation northward to the Keaau and Hilo areas. Puna is comprised of approximately 319,767 acres, of which 163,636 acres is devoted to agriculture use, 114,094 acres is devoted to conservation, 4,656 acres is residential, 165 acres is industrial and 81 acres is for commercial use. Because of the general lack of available commercial land, many agricultural -zoned properties are currently being rezoned commercial to meet the need for additional commercial developments. Another important valuation factor on the Island of Hawaii is the availability of water. On the eastern slopes of Mauna Loa and Kilauea Volcano much of the soil is very permeable and the rainfall is plentiful, averaging 135 inches per year at the Hilo Airport. The Atlas of Hawaii, Second Edition, University of Hawaii Press, 1983, notes that "the quality of Hawaii's fresh water ... is excellent: the water is soft, low in mineral content, and potable without disinfection." In the two districts of South Hilo and Puna about one billion gallons of fresh water a day flow out to sea. John Mink, a Hawaii hydrologist, indicates that Hilo's springs may be among the largest in the world, and that even a several month drought in the area would only cause a "blip" in the amount that flows out to sea each day. Wells, which have been drilled in the area, are considered to be virtually inexhaustible. Lava Flow Hazards Hawaii has historically been the site of numerous and continuous volcanic activity throughout time. The Big Island is composed of five major volcanoes: Kohala, Mauna Kea, Hualalai, Mauna Loa and Kilauea. Throughout the foreseeable future, both Kilauea and Mauna Loa are expected to erupt frequently. The potential hazards from volcanic eruptions include lava flows, airborne lava fragments and volcanic gases. There are also indirect hazards such as earthquakes and tsunamis that may cause damage over a far greater area than that caused by the volcano. Volcanoes typically erupt at their summits or on their flanks. Young volcanoes such as Kilauea or Mauna Loa have potential for Lawrence Appraisal Group Hawaii, Inc. Page 43 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 summit eruption. If a flank eruption occurs, it is usually along a rift zone. Kilauea has been erupting since 1983 and has caused the destruction of hundreds of homes in an area known as Kalapana. The losses incurred in this area have caused many insurance companies to refuse to write homeowners insurance for properties located in Lava Flow Hazard Zones 1 and 2. The state legislature, however, has created a fund to pool the liability of insurers so that all properties on Hawaii can receive property insurance. The subject market area is located within Lava Flow Hazard Zone 2. Property values and property marketability appear to be unaffected by this zone classification. Lawrence Appraisal Group Hawaii, Inc. Page 44 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEv (3)-1-5-2: 24 PROPERTY DESCRIPTION Overview The subject's parcel is situated on Kau Hale Street and on Pahoa Village Road in Downtown Pahoa. Purchased by the current owner in January 2001 for $84,430, the commercial zoned site was basically raw land with overgrown vegetation. The current owners spent approximately $350,000 in site improvements. Currently ready for development, the site has been entirely cleared of the overgrown vegetation and graded, concrete curbs and sidewalks have been added along the entrance from Pahoa Village Road, a water line is available to the site and additional overhead electrical poles have been constructed. The owners currently rent the subject site for $3,000 per month to the local farmer's market during weekends and to Luquin's Mexican restaurant on the adjoining lot, to accommodate for additional guest parking during weekdays. Recently listed at $1,500,000, the subject property has been on the market for about twelve days. Physical Characteristics of Site The 3.84 square foot site is located on level terrain in Downtown Pahoa. 2.99 acres are zoned CV - 10, for commercial village use (10,000 square foot minimum required for development) and 0.85 acres or 37,060 square feet are zoned RS -10 for single-family residential use (also 10,000 square foot minimum). The irregular-shaped site has good topographic and drainage characteristics with ample parking area. The parcel is at street grade with overhead power and telephone service lines. Waste disposal is by the private septic system, which is typical of the market area. Access is convenient from Pahoa Village Road and Kau Hale Street. Zoning As noted, the majority of the subject site is zoned Commercial Village. The purpose of this zone is to provide "for a broad range or variety of commercial and light industrial uses that are necessary to serve the population in rural areas where the supplementary support of the general business uses and activities of a central commercial district is not readily available. Permitted Uses CV zone allows for a wide spectrum of uses including but no limited to adult day care homes, amusement and recreation facilities, art galleries and museums, bed and breakfast establishments, parking lots, farmers markets, convenience stores, boarding facilities, community buildings, family child care homes, financial institutions, etc. Restrictions Minimum Lot Size: 10,000 square feet Maximum Height Limit: 30 feet Minimum Building Site Area: 7,500 square feet Minimum Building Site Width: 60 feet Lawrence Appraisal Group Hawaii, Inc. Pale 45 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAx MAP KEv (3)-1-5-2: 24 Setbacks Minimum Front Yard: 15 feet Minimum Rear Yard: 15 feet Minimum Side Yard: None The 37,060 square foot residential site is zoned RS -10, Single Family Residential. Permitted use is for single-family home development on a minimum lot size of 10,000 square feet. Soil Conditions According to the U.S. Department of Agriculture Soil Conservation Service (dated December 1973), the soil found on and around the subject property is Hilo silty clay loam, with zero to ten percent slopes. Hilo series soils consist of well -drained silty clay loams formed in a series of volcanic ash layers that give them a banded appearance. This soil type is low on the windward side of Mauna Kea and is often dissected by deep, narrow gulches. In a representative profile, the surface layer is dark brown silty clay loam about 12 inches thick and consists of dark -brown, dark reddish brown, and very dark grayish -brown silty clay loam. The surface layer is usually very strongly acid, and the subsoil typically medium acid. This soil dehydrates irreversibly into fine, gravel -sized aggregates. Also typical of soils in the subject's area are small areas of shallow soils over pahoehoe lava bedrock. Permeability is typically rapid, runoff is slow and the erosion hazard is slight. Easements and Encroachments No apparent adverse easements or any other restrictions that would be considered detrimental to the development and use of the subject property were noted at inspection. Please refer to photographs of the subject for details. Subject's Sales History As noted, the current owners purchased the subject property for $84,430 in January 2001. Recently, an offer to purchase the property was made at $1.2 million but fell through. Currently listed for sale at $1,500,000, the subject has been on the market for approximately twelve days. No other known listings or sales of the subject have occurred in the past five years. Lawrence Appraisal Group Hawaii, Inc. Page 46 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE, TAX MAP KEY (3)-1-5-2: 24 Flood Hazard Zones According to the FEMA flood map (FIRM Map 155166 panel 1375 C map, revised 9/16/88), the subject parcel is located in Flood Zone "X," an area determined to be outside the 100 -year and 500 -year floodplains. Tax Assessments The subject's real property tax assessment for the 2003/2004 tax year was $260,200 for the 2.99 acres commercial -zoned land, and $40,800 for the 37,060 square feet of residential -zoned land, or a total of $301,000. Hawaii tax rates are $9.85 per $1,000 of value for land and $9.85 per $1,000 of value for building improvements. Annual real property taxes for the current year are $2,964.85. Site Conclusion The subject site is of adequate size and has adequate topography for commercial and residential development to legally permissible uses. Additionally, it has good access to roads, utilities and other resources which are desirable for commercial uses. Overall, it is a desirable site for commercial and residential development. Lawrence Appraisal Group Hawaii, Inc. Page 47 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 ISLAND MAP oHonokaa i n Hilo.. PohaWoe Trotrdr!3. J`1 Area Vowary `+,:�_ - _�'��,✓ keseruatnr+ t ^��—' Subject i Captain Cook ahoa f' 1 •- 02003 DeLorme mi � Gyorrrle corn 0 5 10 15 20 25 Street Atlas USA€• 2061 PWs MN (9.8- E) Date Zoom 7-4 Lawrence Appraisal Group Hawaii, Inc. Paae 48 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 Lawrence Appraisal Group Hawaii, Inc. Pavze 49 LOCATION MAP 9 dor Subject t� �+ � oa c 3 _ ♦ c�opt -7 132 130 r' 132 �$ }- S +u K.uualgk�lYNix�e U ®2003 DeLorme www.ddorme.com SL eet Atlas USAJ, 2N4 Plus MN (9 8' E) n 0 1000 2000 Data Zoom 13-0 Lawrence Appraisal Group Hawaii, Inc. Pavze 49 N PE: 'i^Y"r« )� kT ♦Pit••" IwN ._-. �� ;lrMYN'YNn� YONW/ 1r•• � !K M91! 1� Yin •� 4 1 t V•1 A � I ' F� •` i X' - ,•\`` • ,�... ', � it sr a y t1� ,t 4'C '. ;� .� i4'.J :: i.�',l .. •, . o a Y e M.Mwri%Iw� 17 4 1 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAx MAP KEY (3)-1-5-2: 24 FLOOD MAP e Prepared for: InterFloodl Lawrence Appl. Group Hawaii, Inc. PAHOA VILLAGE RD www.lnterflood.com • 1-800-252-6633 PAHOA, HI 96778 r._l000s �� iwr .N�• ('nrir "ll 0 i \ 100C / '1551661125C "1551661150C w.0►va 4 o,c., '� Re crNc ~, 1: ,� \ 'tiaw�ak Furca Re'erNe 25C `15 Subject 15516613 Sl a la ma - K+ (f Fnmt Rc.cnc !` i Puna F++rc, Rc�crne I k+y FLOODSCAPE 75C 15516616000 + Flood Ha2ards Map Map Number nay AREA OF THE C04MNUM(TY 6S SHO"# . 1 1551661375C + + AS INSET L ON PANEL 1551016W01 11 Effective Date 14 June 2,1995 11+ jt�tlly V 1+1 } dill L !! I�l• For more information about s�+ flood zones and flood insurance, contact: 0' 20000' --- 40000 600 -DC 80000 Powered by Flood Source 877.77TI-000 www.floodsource.com ©1999-2002 FloodSource Corp. U.S. Patents Pending. All rights reserved For more information, please e-mail info@floodsource.com. Lawrence Appraisal Group Hawaii, Inc. Pav,e 51 • • FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 LAVA MAP Lawrence Appraisal Group Hawaii, Inc. Paye 52 • • FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAx MAP KEY (3)-1-5-2: 24 PHOTOGRAPHS OF SUBJECT View of subject property looking northeasterly from Kau Hale Road. View of subject property looking southerly from Pahoa Village Road. Lawrence Appraisal Group Hawaii, Inc. Pav,e 53 • • FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAx MAP KEY (3)-1-5-2: 24 PHOTOGRAPHS OF SUBJECT View of Kau Hale Street looking southerly from Pahoa Village Road. View of Pahoa Village Road looking easterly; subject property at right. Lawrence Appraisal Group Hawaii, Inc. Pap,e 54 • • FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 PHOTOGRAPHS OF SUBJECT View of Luquin's Mexican Restaurant; entry onto subject property at right. View of Akebono Theatre; situated at rear of Luquin's Mexican Restaurant. Lawrence Appraisal Group Hawaii, Inc. Papze 55 glow � a �m`'�{Y ;,fit • a *� ' � �..�,��.F � "� r' fii LL � ,,, r� ;�ik '4 "+ ��� ...-�'`� �"5•-2�eT Ziac. :� =-�Y � � low " Vf a, �. {a { -44 a. :fir= •* �• - `_`� "r � `_, v a , �.�. ,,i�,•,p�. � ' � "h'�y�`... der"" -..:.air. , :: "" +M.. .°•`' 'Olt�l�s." w. 1'�d��B� 'ib �S• „ 1" .. v..m+w 'r ,� .P! +rte ♦ t' { , � � - :moi � � ,, -i ,d. : �� 47 ii ` tea', �r�'« �. r•si y_•���'�.wfV �-�y-^4�5�1+ • S�J.♦ fMi.•11,ir. " `r '� �� � �E rI�"+ �,�3..��� , "�f�'• i f ....{fix � % `��;, • � `` y . 1�4 "+;TIC � • �'t�'.i z�igir,�• rs '�R r �. � ` �A, u �. :i- �" � � �{.": �L .+"'..... ,q . t'iN �� ! �-1. %'$ r ♦`���.,.f• a ... ..,. .%: fE.t -s • r 5�.. 3�M 1 � $ i ?Rz +.: �F;.Y J�,Y4 pww_ ...._ .�: �'1i`.., 4th, 1'►-,. FILE: HC47A002C4; LOT I -B -I & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 HIGHEST AND BEST USE COMMENTARY Highest and Best Use may be defined as: "That reasonable and probable use that supports 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 immediately above 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. Implied within these definitions is recognition of the contribution of that specific use to community environment or to community development goals, in addition to wealth maximization of individual property owners. Also implied is that the determination of highest and best use results from the appraisers' judgment and analytical skill, i.e., that the use determined from analysis represents an opinion and not a fact to be found. In appraisal practice, the concept of highest and best use represents the premise upon which value is based. In the context of most probable selling price (market value), another appropriate term to reflect highest and best use would be most probable use. In the context of investment value, an alternative term would be most profitable use. Real estate is valued in terms of its highest and best use. The highest and best use of the land (or site) if vacant and available for use may differ from the highest and best use of the "improved" property. This will be true when the improvements are not of an appropriate use and yet make a contribution to the total property value in excess of the value of the site. In determining the highest and best use of a site, several general guidelines are adhered to, these being that the intended improvements are I) economically feasible; 2) legally permissible; 3) conforming to area; and 4) physically possible. The highest and best use of the subject property "as vacant" will be determined as follows: "AS VACANT" The highest and best use of the subject site as if vacant assumes that the land value is determined by potential use. The anticipated use of the land is the value additive. Without this anticipated use, land has no value. The use, among reasonable, alternative uses which yields the highest present land value after payments for the other factors of production is the highest and best use of the land as though vacant. Lawrence Appraisal Group Hawaii, Inc. Page 58 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE, TAx MAP KEY (3)-1-5-2: 24 Physically Possible: To the best knowledge of the appraiser, the subject site, if vacant, could be physically developed with a number of possible uses, some of which were already noted under zoning discussion. The site is adequate in size, terrain, shape, frontage, depth, and availability for public utilities to accommodate development. Legally Permissible: The subject's 2.99 acres site is zoned CV -10 (Commercial Village 10,000 square foot minimum lot size) for commercial uses that conform to legally permitted uses. This portion of the subject site is legally sub -dividable into thirteen parcels. Because the subject property is being appraised "as is" an the appraiser is unaware of any subdivision plan having been developed as of the date of appraisal, no hypothetical value additive has been considered for this factor. However, the subject's potential for subdivision is considered a benefit to a future buyer willing to subdivide which would increase the overall value of the site. As such, a nominal adjustment is made to those comparable sales which lack this benefit. No zoning or other changes in the subject property's classifications are anticipated. The additional 37,060 square feet of the subject site is zone RS -10 (Single -Family Residential, 10,000 square foot minimum) for single-family home development that conforms to zoning standards. This portion of the subject site is legally sub -dividable into three parcels. Because this smaller site is situated in Downtown Pahoa with most neighboring properties zoned for commercial use and is already legally under one TMK with the majority of the site zoned commercial, a potential rezoning from RS to CV is anticipated. Larry Nakayama of the Planning Department with the County of Hawaii (808-961-8288) confirmed the possibility for this portion of the site to be re- zoned to CV if the owner were to apply for a change in use. Financially Feasible: The uses for construction on this site, if vacant, are various. While current market conditions for these uses differ, any one use could return positive value to the land. All uses that are expected to generate a positive return to the land are considered financially feasible. Maximally Productive: Based on the foregoing, the highest theoretical rate of return to the land would be to subdivide into the maximal number of lots permitted under zoning standards, apply for a change in use from residential to commercial for the residential portion of the subject site and develop with the maximal commercial use/s allowed by zoning. The Highest and Best Interim/Present Use is for the subject site to be used for parking that could provide income. Lawrence Appraisal Group Hawaii, Inc. Paste 59 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 LAND VALUATION As discussed under Highest and Best Use Criteria, the subject maximally productive use is for commercial use. As such, a detailed analysis is made for the 2.99 -acre commercial zoned site. In an effort to provide the client with an estimate for the 37,060 square feet zoned residential, a separate but limited analysis is made. Determination of Fee Simple Value of Land -Commercial Portion There are six procedures used to value land: sales comparison, allocation, extraction, subdivision development, land residual and ground rent capitalization. The use of each approach depends upon the type of property, the availability and suitability of the market data upon which the approach is predicated, and other judgment factors. The sales comparison approach is the most commonly used technique and is the preferred method when data is available. This involves investigation of recent sales of similar type properties and comparing them with the subject land to arrive at an indication of value. This approach is based on the premise that an informed purchaser would pay no more for a property than the cost of acquiring another existing site with the same utility (principle of substitution). A location map and data sheets are presented on the following pages. The comparable land data is summarized and analyzed in a following table. Lawrence Appraisal Group Hawaii, Inc. Page 60 • 1 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 LAND SALE COMPARABLES LOCATION MAP 130 p Land Comparable One Land Comparable Four Land Comparable Six about 10 Miles North Land Comparable Three �y O � oa 3a hkctpp $ Subject Land Comparable Five Land Comparable Two o I � o h ®2003 DeLorme 2 0 1000 2000 www,delorme.com Street Atlas USA*-2004Plus MN (9.r E) Data Zoom 13-0 Lawrence Appraisal Group Hawaii, Inc. PaRze 61 0 0 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 LAND COMPARABLE NUMBER ONE s�os Lawrence Appraisal Group Hawaii, Inc. PaRze 62 FILE: HC47A002C4; LOT 1-13-1 & 3 PAHOA VILLAGE; TAx MAP KEY (3)-1-5-2: 24 IDENTIFICATION Location: Tax Map Key: TRANSACTION DATA MLS Number/Marketing Time Grantor: Grantee: Recordation: Instrument: SALES DATA Sale Price: Terms: Price: Listing Ratio: Cash Equivalent Price: Per Acre: SITE DESCRIPTION Land Area: Zoning: Topography: Shape: Flood Zone: Lava Zone: Utilities: Access: Street: Improvements: PROPERTY USE At Time of Sale: Present: Highest & Best Use: VERIFICATION: Pahoa Bypass Road Pahoa, Hawaii County, Hawaii (3)-1-5-6-26 N/A-TMK Sale Mac I 1 Rex Ramsey January 1, 2004 04-011172 $630,000 Unknown-TMK Sale Unknown-TMK Sale $630,000 $94,880 6.64 Acres A -5A (Agricultural, 5 acres minimum) Level at street grade Irregular Zone X Zone 2 Water: County to site Electric: Overhead to site Waste Disposal: Cesspool Corner location, good access Pahoa Bypass Road Mac -Nut Orchard Vacant Vacant Agricultural Public Records Lawrence Appraisal Group Hawaii, Inc. Pau 63 0 0 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEV (3)-1-5-2: 24 LAND COMPARABLE NUMBER TWO w� I1 =3� S "KW 9t..^+1 .i�.�TI'Y Il'4i!• :i I P,4A. SAA �.r+ 4 ♦t Lawrence Appraisal Group Hawaii, Inc. Pav,e 64 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 IDENTIFICATION Location: 15-2961 Pahoa Village Road Terms: Pahoa, Hawaii County, Hawaii Tax Map Key: (3)-1-5-12-18 TRANSACTION DATA $60,000 MLS Number/Marketing Time: 16963/2.7 years Grantor: Unknown Grantee: Barbara Mckenzie & Jorge C. Nijensohn Recordation: December 18, 2002 Instrument: 02-225430 SALES DATA Sale Price: $60,000 Terms: All cash sale Price: Listing Ratio: 87% Cash Equivalent Price: $60,000 Per Acre: $333,333 SITE DESCRIPTION Land Area: 0.18 acres (7,646 square feet) Zoning: CV -10 (Commercial Village, 10,000 square foot minimum) Topography: Level at street grade Shape: Generally rectangular Flood Zone: Zone X Lava Zone: Zone 2 Utilities: Water: County to site Electric: Overhead to site Waste Disposal: Cesspool Access: Mid -block location, good access Street: Pahoa Village Road Improvements: None PROPERTY USE At Time of Sale: Vacant Present: Vacant Highest & Best Use: Commercial VERIFICATION: MLS/Public Records/Agent, Junko Weeks (808) 965-9500 Lawrence Appraisal Group Hawaii, Inc. Paae 65 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 LAND COMPARABLE NUMBER THREE At4? EPA Lawrence Appraisal Group Hawaii, Inc. Paae 66 • • FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAx MAP KEY (3)-1-5-2: 24 IDENTIFICATION Location: Pahoa Village Road Pahoa, Hawaii County, Hawaii Tax Map Key: (3)-1-5-12-15 TRANSACTION DATA MLS Number/Marketing Time: Grantor: Grantee: Recordation: Instrument: SALES DATA Sale Price: Terms: Price: Listing Ratio: Cash Equivalent Price: Per Acre: SITE DESCRIPTION Land Area: Zoning: Topography: Shape: Flood Zone: Lava Zone: Utilities: Access: Street: Improvements: PROPERTY USE At Time of Sale: Present: Highest & Best Use: VERIFICATION: 26610/ 1.6 years Unknown Matthew J. & Borom P. Lang September 25, 2002 02-169266 $50,000 All cash sale 84% $50,000 $294,118 0.17 acres (7,142 square feet) CV -10 (Commercial Village, 10,000 square feet minimum) Level at street grade Irregular Zone X Zone 2 Water: County to site Electric: Overhead to site Waste Disposal: Cesspool Corner location, good access Pahoa Village Road None Vacant Vacant Commercial MLS/Public Records/Agent, Junko Weeks (808) 965-9500 Lawrence Appraisal Group Hawaii, Inc. Paae 67 0 0 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAx MAP KEY (3)-1-5-2: 24 LAND COMPARABLE NUMBER FOUR 1 � kk i ».s .r» �` •.»r 2 i �• ' www »�! ... r.a � .. w• � r.»• g ` i , ! Lawrence Appraisal Group Hawaii, Inc. PaRze 68 • • FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAx MAP KEY (3)-1-5-2: 24 IDENTIFICATION Location: 15-2812 Pahoa Village Rd Pahoa, Hawaii County, Hawaii Tax Map Key: (3)-1-5-14-7 TRANSACTION DATA MLS Number/Marketing Time: Grantor: Grantee: Recordation: Instrument: SALES DATA Sale Price: Terms: Price: Listing Ratio: Cash Equivalent Price: Per Acre: SITE DESCRIPTION Land Area: Zoning: Topography: Shape: Flood Zone: Lava Zone: Utilities: Access: Street: Improvements: PROPERTY USE At Time of Sale: Present: Highest & Best Use: VERIFICATION: 18310/10.5 months Unknown Hara Land Development June 8, 2001 01-086324 $250,000 All cash Sale 100% $250,000 $156,250 1.6 Acres CV -10 (Commercial Village, 10,000 square feet minimum) Level at street grade, sloping terrain at rear Irregular Zone X Zone 2 Water: County to site Electric: Overhead to site Waste Disposal: Septic Mid -block location, good access Pahoa Village Road None Vacant Vacant Commercial MLS/Public Records/Agent, Wallace Patch, (808) 965-8365 Lawrence Appraisal Group Hawaii, Inc. Paye 69 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAx MAP KEY (3)-1-5-2: 24 LAND COMPARABLE NUMBER FIVE 1 {y r*Y 644. Aa 47:a "A:1.-;Aw.., i sca[tr n cKa.ct Lawrence Appraisal Group Hawaii, Inc. Paae 70 0 9 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAx MAP KEY (3)-1-5-2: 24 IDENTIFICATION Location: Pahoa Village Road Pahoa, Hawaii County, Hawaii Tax Map Key: (3)-1-5-12-2 TRANSACTION DATA MLS Number/Marketing Time: Grantor: Grantee: Recordation: Instrument: SALES DATA Sale Price: Terms: Price: Listing Ratio: Cash Equivalent Price: Per Acre: SITE DESCRIPTION Land Area: Zoning: Topography: Shape: Flood Zone: Lava Zone: Utilities: Access: Street: Improvements: PROPERTY USE At Time of Sale: Present: Highest & Best Use: VERIFICATION: 133308/Active Listing Justin T. & Charlotte C. Cheng N/A -Active Listing N/A -Active Listing N/A -Active Listing $80,000 (Asking Price) N/A -Active Listing N/A -Active Listing $80,000 $380,952 0.21 acres (9,320 square feet) CV -10 (Commercial Village, 10,000 square foot minimum) Level at street grade Irregular Zone X Zone 2 Water: County to site Electric: Overhead to site Waste Disposal: Septic Mid -block location, average access Pahoa Village Road None Vacant Vacant Commercial MLS/Public Records Lawrence Appraisal Group Hawaii, Inc. PaRze 71 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 LAND COMPARABLE NUMBER SIX Lawrence Appraisal Group Hawaii, Inc. PaRze 72 • • FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 IDENTIFICATION Location: Mikahala Street Keaau, Hawaii County, Hawaii Tax Map Key: (3)-1-6-148-20 TRANSACTION DATA MLS Number/Marketing Time: Grantor: Grantee: Recordation: Instrument: SALES DATA Sale Price: Terms: Price: Listing Ratio: Cash Equivalent Price: Per Acre: SITE DESCRIPTION Land Area: Zoning: Topography: Shape: Flood Zone: Lava Zone: Utilities: Access: Street: Improvements: PROPERTY USE At Time of Sale: Present: Highest & Best Use: VERIFICATION: 122467/Active Listing W. H. Shipman LTD/Etal N/A -Active Listing N/A -Active Listing N/A -Active Listing $995,000 (Asking Price) N/A -Active Listing N/A -Active Listing $995,000 $208,955 4.77 Acres MG -20 (General Manufacture, 20,000 square feet minimum) Level at street grade Irregular Zone X Zone 3 Water: County to site Electric: Overhead to site Waste Disposal: Septic Cul-de-sac location, good access Mikahala Street None Vacant Vacant Industrial MLS/Public Records Lawrence Appraisal Group Hawaii, Inc. Page 73 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAx MAP KEY (3)-1-5-2: 24 Adjustment Grid The sales comparison approach, based on the price per acre as the primary unit of analysis, centers around elements of comparison that are the characteristics of properties and transactions that cause the price paid for land to vary. Tenure: All of the comparables involved fee simple land and no adjustment is required for real property rights appraised. Financing: As to terms of financing, no adjustments are necessary to the closed sales as the data represent cash equivalent sales. Land comparables five and six are active listings and are adjusted downward at 5% as they will most likely be negotiated downward in a sale transaction. Marketing Conditions: Improving economic conditions in Puna are reflected in the values of single-family homes that have risen by 18 to 22% in the last year. Additionally, appraiser identified a resale of the previously discussed property, "DA Store," which sold in June 2003 for $200,000 and now, about a year later, is on the market at an asking price of $500,000. This piece of market evidence indicates a monthly appreciation of approximately 5% per month. While this latter data point is considered, there is not enough statistical evidence to demonstrate conclusively that commercial land values in Puna have experienced such rapid increases, albeit commercial development is clearly gaining momentum. Based on the above and on the market trend analysis previously discussed on pages 39 to 42, an adjustment of 12% per annum is made to closed sales. General Location/ Topography: While comparables are located in or near the Downtown Pahoa area, location adjustments are indicated for those comparables having superior/inferior location advantages to the subject. Comparable one is located outside the downtown Pahoa area, in a less central location and is adjusted upward at 15%. Comparable six is located in Keaau, closer to Hilo, the main center of commerce and is adjusted downward at 5%. The remaining comparables are situated on Pahoa Village Road and no adjustments are necessary. Zoning: Comparable one is zoned agricultural, and inferior classification to the subject's commercial village and is adjusted upward at 25%. Comparable six is zone for general manufacturing, a slightly inferior classification and is adjusted upward at 15%. Lawrence Appraisal Group Hawaii, Inc. Page 74 FILE: HC47A002C4, LOT 1-B-1 & 3 PAHOA VILLAGE, TAX MAP KEY (3)-1-5-2: 24 Subdivision Potential: The subject has potential for subdivision, which is considered a benefit to the potential buyer. Comparables one, two, three and five lack this benefit and a nominal positive adjustment is made at 5%. No hypothetical value additive has been considered since as of the effective date of the appraisal, no subdivision plan was submitted to the county. Pad Status: The subject is entirely cleared and graded. Comparable one is improved with a Mac -nut Orchard, which would need to be entirely cleared if it were to be developed. As such a considerable upward adjustment is made at 35%. Comparables four and five are forested with natural vegetation and are adjusted upward at 25%. Comparable six has a cleared site but no graded pad and is adjusted upward at 10%. Access: In general, all comparables have relatively good access with the exception of comparable five, which is fairly steep from street and could have some access issues. Based on the above, this comparable is adjusted upward at 5%. Road: All comparables are on county paved roads and no adjustments are necessary. Water: All comparables have county water lines to site and no adjustments are necessary. Electric: All comparables have overhead electric lines to site and no adjustments are necessary. Size: As to size, the price per acre generally increases as the size of the parcel decreases. A size adjustment regression analysis resulted in a strong coefficient of correlation of 86%. The data indicates that as the size increases, the price per square foot decreases, with a high coefficient of correlation (0.86), shown by the graph below: Lawrence Appraisal Group Hawaii, Inc. Pan 75 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 $500,000 $450.000 $400,000 $350,000 1: $300.000 n $250,000 $_'00.000 $150,000 $100,000 $50,000 0 Size Regression (3)-l-5-2-24y=-63381LMx)+316260 R' = 0.8612 3 4 5 6 7 8 Acres Adjustments are based on the above logarithmic curve and are made as follows: Comparable land data is summarized on the table on the next page: Lawrence Appraisal Group Hawaii, Inc. Page 76 Land Area Regression Analysis (3)-I-5-2-24 Comp Size Ln(size) Price/Acre Y Estimate Adjustment Subject 2.99 1.09527 $246.840 3 0.17 -1.77196 $372,992 $428,568 -42% 2 0.18 -1.71480 $411000 $42046 -42% 5 0.21 -1.56065 $488,570 $415,175 -41% 4 1.60 0.47000 $276,985 $286,471 -14% 5 4.77 1.56235 $237,798 $217,237 14% 1 1 6.64 1.89311 $179,323 $196.273 26% Comparable land data is summarized on the table on the next page: Lawrence Appraisal Group Hawaii, Inc. Page 76 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 The adjusted land sales data indicates a reasonably tight value range from $216,335 to $288,256 per acre with a central tendency of $246,563 per acre. Most weight is given to the four closed sales, which are considered the best indicator of value on a price per acre base. Comparables five and six are active listings and are given the less overall weight. Lawrence Appraisal Group Hawaii, Inc. Paee 77 In Simple lard Valuation (3}I-5-2-24 Subject Cotiv #1 Corm #21 Cony 43 CorT#4 Camp #5 Co #6 Tax Map Key 315-2-24 315.6-26 315-12-18 315-12-15 315-14-7 315-12-2 3-t-6-148.20 Location Pahoa Palm Pahoa Pahoa Pahoa Paloma ICeaau Access from Pahoa Village Pahoa Bypass Pahoa Vill a Pahoa Village Patera Village Pahoa Villaga swprranPark Road Cry Paved Cry Paved Cry Paved Cry Paved Ctv Paved Cry Paved Civ Paved Tenure Fee Siniple Fee S' le Fee Sinitile Fee SimpIe Fee Simple Fee SwTle Fee View Neighborhood Neighborhood Neighborhood Neighborhood Neighborhood Neighborhood Neighbodtood InProverwrits None Mac Nur Orchard Now None Now None None Pad Finished Site Raw land Finished Site Finished Site Finished Site Finished Site Finished Site Land Area (Acres) 2.99 6.64 0.181 0.17 1-60 0.21 4.77 Land Area(SF) 130,244 289,238 7,646 7,142 69,696 9.320 207,781 Zonis CV -10 A -5A CV -10 CV -10 CV -10 CV -10 MG -20 Transaction Date -- 120/04 12/18/02 9/25/02 6/8/01 Active List Active List Sale Price $630,000 $60,000 $50,000 $250,000 $80,000 $995,000 Unit of value (Vacre) $94,880 $333,333 $294.118 $156,250 $380,952 $208,595 Financing Terms 0% 00/6 Oo/a 0% -5% -5% Date of Sale (months) 5 18 21 36 Active List Active List %Adjustment 1 5% 18% 21% 360/o Active List Active List ADJUSTED VALUE ($/acre) $99,624 $393,333 1 $355,230 $213,065 $361,904 $198,165 General Location/fo Good+ Average Good+ Good+ Good Good+ Good++ %Adjustment 15% 0% 01/. 5% (P/o -5% Zoning Adjustment 25% 00/. 01/6 00/. 0% 15% Subdivision Potential Adjustment 5% 5% 5% 00/6 5% 00/ Pad Status Finished Site Macran Orchard Finished Site Finished Site Raw land Raw Land Rough Grade %Adjustment 35% 0% 01/. 25% 25%1 100/6 Access Good Good Good Good Good Average Good %Adjustment 00/6 00/ 00/. 00/. 5% 01/6 Road Cry Paved Cry Paved Cty Paved Cry Paved Cry Paved Cry Paved Cry Paved %Adjwarrent 0% 00/ 01/. 00/6 00/ Q% Water Co un County County County County County Cour %Adjustment 00/. 00/0 0% (P/a 00/. 09/. Electric To site To site To site To site To site To site To site %Adjustment 0% 00/6 (P/o 00/6 0% 00/6 NEFADJ. (%) 800/ 5% 5% 3M/o 35% 200/ Ad'. Value before Size $179,323 $413,000 $372,992 $276,985 $488,570 $237,798 Size Adj. Factor (%) 26"/0 -42% 42% -14% 41% 14% Indicated$/acre Value $225,9471 $239,540 5216,335 $238,207 $288,256 $271,090 Weighting Factor 200/ 20%1 200% 209/6 100/. 100/6 Pro Rata $45,1891 $47,908 1 $43,267 $47,641 $28,826 $27,109 Wei ted Conin'brmon ($/acre) Concluded (.&acre) Indicated 'ect value Rounded to: 1 $239,940 $239,900 $717,301 $720,000 The adjusted land sales data indicates a reasonably tight value range from $216,335 to $288,256 per acre with a central tendency of $246,563 per acre. Most weight is given to the four closed sales, which are considered the best indicator of value on a price per acre base. Comparables five and six are active listings and are given the less overall weight. Lawrence Appraisal Group Hawaii, Inc. Paee 77 FILE: HC47A002C4; LoT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEv (3)-1-5-2: 24 This data set is the best representation of the market and is appropriate for the subject analysis. The unit price after adjustment is rounded to $239,900 per acre. Considering the data and preceding analysis, the market value of the fee simple interest of the subject commercial zoned land by the Market Approach as of June 18, 2004 was: 2.99 acres X x',$239,900 _ _ $717,301 Rounded $720,000 Thus, the subject's fee simple commercially -zoned land value as of June 18, 2004 was: $720,000 Lawrence Appraisal Group Hawaii, Inc. Page 78 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 Determination of Fee Simple Value of Land -Residential Portion Appraisers found recently closed and pending sales as well as active listings of agricultural and residential zoned comparables similar in use to the subject site in the general Puna market area. The results of this research are summarized below: Lawrence Appraisal Group Hawaii, Inc. Page 79 Property Address TMK Site Size S Zoning Sale Price Date of Sale Price/SF Comments Similar size to subject with visibilit 33rd St (Hawaiian Paradise Park) 315-16-175 38,332 A -IA $49,900 3/9/04 $1.30 on county water, and with potent change in use from Ag to Co Similar size to subject , inferior z Beach St (Hawaiian Paradise Park) 315-55-3 32,670 A -IA $50,000 1/26/04 $1.53 catchment. Located near om Smaller than subject parcel, on c Milo Street (Keaau Town) 316-2-68 13,300 RS -10 $42,000 6/27/03 $3.16 Superior location to subject, in the, closer to Hilo's main center of Smaller than subject parcel, on 4 Nanawale Homestead Rd 315-11-32 9,919 RS -10 $16,000 Pending Sale $1.61 and in the center of Pal Smaller than subject parcel, on c Nanawale Homestead Rd 315-11-38 9,876 RS -10 $28,000 Active Listing $2.84 and in the center of Pal Based on the above and in view of the subject's desirable location, the 37,060 square foot site is estimated toward the higher end of the range at a unit price of about $2.50 per square foot. Considering the data and preceding analysis, the market value of the fee simple interest of the subject residential zoned land as of June 18, 2004 is estimate at: 37,060 SF X ; .SO/SF ,` _ $92,650 Rounded $90,000 Thus, the subject's fee simple residentially -zoned land value as of June 18, 2004 was: $90,000 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAx MAP KEv (3)-1-5-2: 24 RECONCILIATION Based upon the preceding analyses, the market value of the subject property in fee simple interest, as of June 18, 2004 was: EIGHT HUNDRED TEN THOUSAND DOLLARS ($810,000) Previous Appraisal Lawrence Appraisal Group appraised the subject property approximately two years for $770,200, which indicates an annual market appreciation of about 3% instead of the 12% concluded under the market trend analysis. As previously noted, the 12% annual market appreciation although considered supportable based on several positive economic indicators was also noted to be statistically unreliable. As concurred by local Puna real estate brokers, the commercial market in this area is largely unpredictable. Additionally, the appraiser was faced with a limited number of truly comparable sales to the subject during both appraisal assignments. The appraiser is confident he has accurately represented the subject's fair market value with the best data available, in both appraisals. Current Listing The subject is currently listed for sale at an asking price of $1.5 million and has been on the market for approximately twelve days. There is no recent market evidence, i.e. comparable closed sales similar to the subject, to support the subject's current list price. Any reliable offers made at or nearing this asking price will set a new trend for Pahoa's commercial market. Appraiser is unaware of any submitted offers so far. Lawrence Appraisal Group Hawaii, Inc. Pale 82 Value Estimate % of Total Commercial site (2.99 acres) $720,000 89% Residential site (37,060 SF) $90,000 11% Total $810,000 100% EIGHT HUNDRED TEN THOUSAND DOLLARS ($810,000) Previous Appraisal Lawrence Appraisal Group appraised the subject property approximately two years for $770,200, which indicates an annual market appreciation of about 3% instead of the 12% concluded under the market trend analysis. As previously noted, the 12% annual market appreciation although considered supportable based on several positive economic indicators was also noted to be statistically unreliable. As concurred by local Puna real estate brokers, the commercial market in this area is largely unpredictable. Additionally, the appraiser was faced with a limited number of truly comparable sales to the subject during both appraisal assignments. The appraiser is confident he has accurately represented the subject's fair market value with the best data available, in both appraisals. Current Listing The subject is currently listed for sale at an asking price of $1.5 million and has been on the market for approximately twelve days. There is no recent market evidence, i.e. comparable closed sales similar to the subject, to support the subject's current list price. Any reliable offers made at or nearing this asking price will set a new trend for Pahoa's commercial market. Appraiser is unaware of any submitted offers so far. Lawrence Appraisal Group Hawaii, Inc. Pale 82 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 MARKETING AND EXPOSURE TIME The Appraisal Standards Board provides the following definitions of exposure and marketing time. Exposure Time: The estimated length of time 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. Marketing Time: An estimate of the amount of time it might take to sell a property interest in real estate at the estimated market value level during the period immediately after the effective date of an appraisal. The distinction is that exposure time is the period immediately prior to the effective date of value and marketing time is the anticipated period immediately after. They will be the same or similar in situations where the market is relatively consistent or projected to be relatively consistent before and after the date of value. The six sales used are summarized as follows: Sale I N/A-TMK Sale Sale 2 2.7 years Sale 3 1.6 years Sale 4 10.5 months Sale 5 N/A- Active List Sale 4 N/A- Active List Based on the above, a reasonable time to find a buyer for the subject would be one to three years, which includes a typical escrow period. 7The market can be increasing or declining and still be considered consistent. Exposure and marketing times are different when the trend is anticipated to change. Lawrence Appraisal Group Hawaii, Inc. Pa1;e 83 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAx MAP KEY (3)-1-5-2: 24 LIMITING CONDITIONS & ASSUMPTIONS 1. LIMIT OF LIABILITY: The liability of LAWRENCE APPRAISAL GROUP HAWAII, INC. and its employees is limited to the fee collected for the work done. There is no accountability, obligation or liability to any third party. The Appraiser assumes no responsibility for any costs incurred to discover or correct any deficiencies present in the property. 2. COPIES, PUBLICATION, DISTRIBUTION, AND USE OF REPORT: Possession of this report or any copy thereof does not carry with it the right of publication, nor may it be used for other than its intended use; the physical report remains the property of the Appraiser for the use of the client, the fee being for the analytical services only. The report may not be used for any purpose by any person or corporation other than the client or the party to whom it is addressed or copied without the written consent of an officer of LAWRENCE APPRAISAL GROUP HAWAII, INC. and then only in its entirety. Neither all nor any part of the contents of this report shall be conveyed to the public through advertising, public relations efforts, news, sales, or other media, without the written consent and approval of LAWRENCE APPRAISAL GROUP HAWAII, INC. nor may any reference be made in such public communication to the Appraisal Institute or the SRA, MAI, or SRPA designations. 3. CONFIDENTIALITY: The Appraiser may not divulge the material (evaluation) contents of the report, analytical findings or conclusions, or give a copy of the report to anyone other than the client or his designee as may be required by the Appraisal Institute it may request in confidence for ethics enforcement, or by a court of law or body with the power of subpoena. This appraisal is to be used only in its entirety and no part is to be used without the whole report. All conclusions and opinions concerning the analysis are set forth in the report and were prepared by the Appraiser whose signature appears on the appraisal report, unless indicated as 'Review Appraiser." No change of any item in the report shall be made by anyone other than the Appraiser and/or officer of the firm. The Appraiser and firm above shall assume no responsibility if any such unauthorized change is made. 4. TRADE SECRETS: This appraisal was obtained from LAWRENCE APPRAISAL GROUP HAWAII, INC. or related companies and/or its individual or related independent contractors and consists of "trade secrets and commercial or financial information" which is privileged and confidential and exempted from disclosure under 5 U.S.C. 552 (b) (4). Notify the Appraiser signing the report or an officer of the company "Group" of any request to reproduce this appraisal in whole or part. 5. INFORMATION USED: No responsibility is assumed for accuracy of information furnished by or from others, the client, his designee, or public records. We are not liable for such information or the work of possible subcontractors. Be advised that some of the people associated with LAWRENCE APPRAISAL GROUP HAWAII, INC. and possibly signing the report are independent contractors. The comparable data relied upon in this report has been confirmed with one or more parties familiar with the transaction or from affidavit; all are considered appropriate for inclusion to the best of our factual judgment and knowledge. Lawrence Appraisal Group Hawaii, Inc. Page 84 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEV (3)-1-5-2: 24 6. TESTIMONY, CONSULTATION, COMPLETION OF CONTRACT FOR APPRAISAL SERVICES: The contract for appraisal, consultation or analytical service, are fulfilled and the total fee payable upon completion of the report. The Appraiser or those assisting in preparation of the report will not be asked or required to give testimony in court or hearing because of having made the appraisal, in full or in part, nor engage in post appraisal consultation with client or third parties except under separate and special arrangement and at additional fee. EXHIBITS: The sketches and maps in this report are included to assist the reader in visualizing the property and are not necessarily to scale. Various photos, if any, are included for the same purpose and are not intended to represent the property in other than actual status, as of the date of the photos. Site plans are not surveys unless shown from separate surveyor. S. LEGAL, FINANCIAL, ENGINEERING, STRUCTURAL OR HIDDEN COMPONENTS MECHANICAL IN NATURE, SOIL, HAZARDOUS WASTES, AND TOXIC MATERIALS: Legal: Soils: No responsibility is assumed for matters legal in character or nature, nor matters of survey, or of any architectural, structural, mechanical, or engineering nature. No opinion is rendered as to the title, which is presumed to be good and merchantable. The property is appraised as if free and clear, unless otherwise stated in particular parts of the report. The legal description is assumed to be correct as used in this report as furnished by the client, his designee or as derived by the Appraiser. The Appraiser has inspected as far as possible, by observation, the land, but it was not possible to personally observe conditions beneath the soil. The value estimate considers there are no such conditions that would cause a loss of value. The land or the soil of the area being appraised is assumed to be firm; subsidence in the area is not known to the Appraiser. The Appraiser does not warrant against this condition or occurrence of problems arising from soil conditions. The Appraiser is not qualified to render expert judgment in matters of soil conditions. Hidden Defects, Mechanical, Subsoil, Insulation: The appraisal is based on there being no hidden, unapparent, or apparent conditions of the property site or subsoil that would render it more or less valuable. No responsibility is assumed for any such conditions or for any expertise or engineering to discover them. Flood Insurance: The Appraiser assumes no responsibility for any costs or consequences arising due to the need or the lack of need for flood hazard insurance. An agent of the Federal Flood Insurance Program should be contacted to determine the actual need for Flood Hazard Insurance. Lawrence Appraisal Group Hawaii, Inc. Page 85 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 Hazardous and/or Toxic Waste: The Appraiser assumes no responsibility for any hazardous or toxic substances or wastes which may be found on, in or around the subject property. The existence of any such substances that may have been noted during the inspection is noted in the main body of the report. The Appraiser, however, is not qualified to render expert judgment in these matters and assumes no responsibility for possible future discovery of such wastes or toxic materials. Should hazardous waste or toxic materials be found on, in, or around the subject property in the future, the value estimates expressed in this report will be subject to revaluation at additional cost. 9. AMERICANS WITH DISABILITIES ACT The Americans With Disabilities Act (ADA) is intended to make commercial businesses equally accessible to all people, including those with disabilities. Consequently, modifications to real estate may be required. The Lawrence Appraisal Group Hawaii, Inc. is not qualified to assess or evaluate compliance issues relating to the ADA. For assistance, attorneys and qualified design professionals should be consulted for clarification. Unless otherwise stated herein, the appraisal report and any estimate of value or other evaluation does not include allowances for potential ADA compliance costs. 10. LEGALITY OF USE: The appraisal is based on the premise that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless otherwise stated in the report; further that all applicable zoning, building, and use regulations and restrictions of all types have been complied with unless otherwise stated in the report; further, it is assumed that all required licenses, consents, permits, or other legislative or administrative authority, local, state, federal and/or private entity or organization have been or can be obtained or renewed for any use considered in the value estimate. 11. AUXILIARY AND RELATED STUDIES: No environmental or impact studies, special market study or analysis, highest and best use analysis or feasibility study has been requested or made unless otherwise specified in an agreement for services or in the report. The Appraiser reserves the unlimited right to alter, amend, revise or rescind any of the statements, findings, opinions, values, estimates, or conclusions upon any subsequent such study or analysis or previous study or analysis subsequently becoming known to him. 12. DOLLAR VALUES, PURCHASING POWER: The market values estimated, and the costs used, are as of the date of the estimate of value. All dollar amounts are based on the purchasing power and price of the dollar as of the date of the value estimate. 13. VALUE CHANGE, DYNAMIC MARKET, INFLUENCES: The estimated market value is subject to change with market changes over time; value is highly related to exposure, time, promotional efforts, terms, motivation, and conditions surrounding the offering. The value estimate considers the productivity and relative attractiveness of the property physically and economically in the market place. The "Estimate of Market Value" in the appraisal report is not based in whole or in part upon the race, color, or national origin of the present owners or occupants of properties in the vicinity of the property appraised. The Appraiser reserves the right to alter the opinion of value on the basis of any information previously withheld or not discovered in the normal course of a diligent investigation. Lawrence Appraisal Group Hawaii, Inc. Page 86 FILE: HCOA002424; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 14. MANAGEMENT OF THE PROPERTY: It is assumed that the property which is the subject of this report will be under prudent and competent ownership and management, neither inefficient nor super efficient. 15. CONTINUING EDUCATION CURRENT: 16. FEE: All designated appraisers of LAWRENCE APPRAISAL GROUP HAWAII, INC. meet current educational recertification. The fee for this appraisal or study is for the service rendered and not for the time spent on the physical report. 17. REVIEW BY OTHERS: Due to the varying requirements of individual review appraisers, this report cannot be guaranteed to meet any one review appraiser's opinion of acceptability. Any changes required by a review appraiser will be completed at the client's expense and at the Appraisers option. 18. AUTHENTIC COPIES: The authentic copies of this report are signed in blue ink. Any copy that does not have the above is unauthorized and may have been altered. 19. USE OF REPORT: Acceptance of and/or use of this appraisal report constitutes acceptance of the above conditions. Lawrence Appraisal Group Hawaii, Inc. Page 87 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 APPENDICES Lawrence Appraisal Group Hawaii, Inc. Page 88 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAX MAP KEY (3)-1-5-2: 24 La Y.w.f,waA. Aa vw 4.�. ^TSmenAl HJn. H.wu ae1]0 P -ave. Stewart H. Hussey ftUnr Ear— U SNaval(HTica. Unke .W Demoluion Teens,Naty Semi loc9_lohi Work eyurjnrta lauserce Appuisa)Group H..u. Irw., Hdo, Ihw.iu Camel Alwvya, Ser'man' C Ttea. mntCaporanm • 1092 to Present—IksvlapeJ and impkrMmN a Mucores plan fon the Contra., Appaial of nesiJencul, indt mud aW c ommerc.1 pmpmtr. inns Indng mi iunion of kaaholJ rtopenmp, wuh anplaa, on the leas m Iir less tluee year. • 1987tol99p—W'rita,bumwr pimurrin Romc,ltaiv Taurhl Ad.'arced Placematt &nrcpean Hivary, the lulw� Remu�wce, W'odd GeographY'and Fngh.h at The American (hsrveas School of R9mc, Itch' • Io8310 198o—Des<IopeJ etr.+trgk m.uteting.Tu.uuen plvv :uuJ accorupanyiu8 prearaauom for the S2 billion AT.e T hJormahon Saacm. Sages Dn'tnon • I9ko to lok?—DewrlryaJ aruJ auplement<J aComp�any Plmauiu�gflmevfa Pscife Tekpham. Clairmut ofa 9»tmender somminee dun JetrlolrJa Cuhmal:\Rion Plan for Mann Count), Caldomu with a h9dgN that was eudotwd by Uta) Jnrrse organwtionc ud aplxo.eJ by tlr Cmray Roar) of Sutpeniwrn • 1963 to 19'Y-0iact Atmuzrr. Gemal Sut bt'r imp, .4TST ('orpaate PLwung SutJr. in Neu York Neu len ay.v�J tlx S.vu Fan'ivo Rsv Aru. Edratkn • Hat ud U... es Yy. CambnJp<, Ma..,clau.ena AR nkuglt3t, 19Ai • Afawen kt Rums. A.kninitratiwt, Pace Uni,er.in. New Yak NY (AT&T Evecutiw ALS. Drree Pl.pt uu, 19'7, • CornfledC rai,ppaisa lwonsedm the State of Hawut RMNtipNl The.4ppaiu4 lnnnuw, National Aacoc uuon of Revkw App,.b,,.& Alorteage 111amboveMpe Thtdrvoiters Cmmttrtlly dklrm President for rag Prewdaw u ofEn,"toan lmpo%orn t Aa,wWion 4DIA 1. Friend, of dve liulJen's Ad,.y Ceras of Few H.aii, Fienda alrhe Pa4u:e Theater Board, Pacific kfeighu Homeowners Amoutnon. Roazd ormha nl' Rotuy C'Inb of Hilo and olfrr couumuntf) otgutvati on Award, e•asived %%o's Who in Amercm Rusuras Evxmiues, vvimsawmdv andcommarLtim. for Community wmph.hutem.. btwmflsnrdn:irilas Commumtyn I.ont,ma..(Ianoi,traseing. Lawrence Appraisal Group Hawaii, Inc. Paize 89 FILE: HC47A002C4; LOT 1-B-1 & 3 PAHOA VILLAGE; TAx MAP KEY (3)-1-5-2: 24 - GENERM STAR NATIONAL INSURANCE COMPANY Gel P.O Box 103S4 Stamford Connecticut COMM REAL ESTATE APPRAISERS ERRORS & OMIS51ONS LIABILI FY INSURANCE POLICY DECLARATIONS PAGE This is a0aims made oeficy Please rAst 1P,% nolir,f bid all tnnom*ms,. % v,,, ar.,hm,mj, 3 LIVII OF LIAIILTTY A CLAIM EVENSE5 U i'm . '..W11 V S. STATUS ol, INSURED DEOMTIR, PRIOR ACTS DATE. 12 1"" 1' S. ANNUAL PREMIUM 0, ENDORSEMENTS TN' "" .'. ',d ov�' 14 MANAGING AGENT He �� H L.I.C, JT*Xar. Aqll� A�rjraer. $., �. 4N NeMra,„ W�saecnro!te 01111 ?9'r. 47,111 C oCe Lawrence Appraisal Group Hawaii, Inc. Page 90 FILE: HC47AO02C4; LOT I -B-1 & 3 PAHOA VILLAGE; TAxMAP KEY (3)-l-5-2: 24 Lawrence Appraisal Group Hawaii, Inc. Pp -eq � \ \ : �. (E � /) m LL `4E Lawrence Appraisal Group Hawaii, Inc. Pp -eq DATE OF APPRAISAL November 11, 2003 TAX MAP KEY (3) 1-5-2:24 LOCATION Pahoa Village Pahoa, Hawaii 96778 PURPOSE OF APPRAISAL Most Probable Sales Price of the Fee Simple Interest M Robert G. Bloom, Jr. CGA -162 Hawaii State Certified General Appraiser LEITER OF TRANSMITTAL ROBERT G. BLOOM, JR Hawaii State Certified General Appraiser CGA -162 REAL ESTATE APPRAISERS, INC. BANK OF HAWAII BUILDING 120 PAUAHI STREET, SUITE 205 HILO, HAWAII 96720 PHONE: (808) 961-3704 FAX: (808) 961.4600 December 18, 2003 Attention: Mr. William Takaba County of Hawaii Finance Department 25 Aupuni Street Hilo, Hawaii 96720 Re: Tax Map Key 3} 1-5-2:24 Dear Mr. Takaba: Pursuant to your request, I have completed a narrative vacant land appraisal report of the above referenced property identified as TMK (3} 1-5-2:24. Data and analyses relied upon in arriving at the market value is reflective as of November 11, 2003. Subjects land area consists of 167,184 square feet or 3.838 acres, and the location is downtown Pahoa, Hawaii. This appraiser did not receive an environmental report on the subject property. This appraiser was asked to appraise the property in "as is" condition. The effective date of value was November 11, 2003 while the date of this letter is December 18, 2003 Based on the research and analysis conducted and subject to the limiting conditions contained herein, it is my opinion that the current market value of the fee simple interest in and to the property appraised as of November 11, 2003 is: TWO HUNDRED SEVENTY FIVE THOUSAND DOLLARS ($275,000) There were no improvements to be appraised on this vacant land parcel. The final estimate of value also considered the highest and best use, location, current economic conditions and market price range. Nonetheless, recognizing that use, ROBERT G. BLOOM, JR, CGA -J 62 County ojH"all LETTER OF TRANSMITTAL price levels and supply/demand conditions affect marketing time, the appraiser concluded that a reasonable marketing time to sell the subject property at the appraised value would probably range between 6 to 12 months. Thank you for this assignment. Respectfiilly submitted, G b Boom, Jr. GA- 62 Certified General Appraiser License No. CGA -162 Expiration Date: 12/31/03 ROBERT G. BLOOM, JR, CGA -162 County ofHawatt iii SUMMARY OF SALIENT DATA Tax Map Key Location Identification Owner of Record Site Data Area Topography Easements Zoning HUD's FIRM Site Improvements Vacant Land Highest & Best Use 2002-2003 Assessed Values Commercial Residential Land Improvement Total Date of Appraisal Value Estimated Indicated Value Commercial Lot 3 Commercial 1-B-1 Commercial Residential 28,793 Square Feet Residential 8,087 Square Feet Most Probable Sales Price Sales Comparison Approach 1-5-2:24, Third Tax Division Pahoa, Hawaii MALLICK, Monika 3.838 acres Level/sloping Drainage Easement 3,183 Square Feet CV -10 and RS -10 Zones Commercial Panel No. 155166 1375 C Cleared See Village Commercial section $260,200 $ 40,800 $301,000 -0- $301,000 November 11, 2003 Market value of fee simple interest Sales Comparison $187,000 42,500 7,500 $ 26,500 $ 11,500 $ 275,000 (as of 11/11/2003) ROBBRTG. BLOOM, JR, CGA -/62 Coanry ofH—aft R5 TABLE OF CONTENTS Pagre Title Page Letter of Transmittal........................................................................... ii Summary of Salient Data..................................................................... iv Table of Contents...............................................................................v SECTION 1 - Limiting and Contingent Conditions...................................................... 1-1 Appraiser's Certification.................................................................... 1-3 Purpose of the Appraisal.................................................................... 1-5 Definitions and Terminology............................................................... 1-6 Section la - Property Data PropertyData................................................................................ la -1 Subject Location Map................................................................... la -3 Photographs of Subject Property...................................................... la -6 Flood Map Section lb - Other Information Sales History of the Subject Property....................................................lb-1 Neighborhood Data......................................................................... lb -2 Description of the Property................................................................ lb -4 Highest and Best Use.......................................................................lb-6 Method of Appraisal........................................................................lb-7 SECTION 2 - THE SALES COMPARISON APPROACH The Sales Comparison Approach.......................................................... 2-1 Residential & Commerical Comparables Data.........................................2-22 SECTION 3 - RECONCEUATION Reconciliation................................................................................. 3-1 ROBERT G. BLOOM, JR., CGA -162 Com y ofAawdt TABLE OF CONTENTS SECTION 4 - CERTIFICATIONS AND QUALIFICATIONS Certification................................................................................... 41 Qualifications of the Appraiser............................................................. 4-2 Company Information Business Background Education Courses Successfully Completed Seminars and Conferences Attended Accredited Financial Lending Institutions Review Appraiser for the following Professional Client References SECTION 5 - ADDENDA Location Map -Residential Comparables Location Map -Commercial Comparables Residential Comparable Photographs Commerical Comparable Photographs Lease ROBERT G. BLOOM, JR., CGA -162 vi County of H-00 SECTION 1 - INTRODUCTION LIMITING AND CONTINGENT CONDITIONS This appraisal is subject to the following limiting conditions and Extra Ordinary Assumptions: That descriptions and other information concerning subject property furnished by the Real Property Assessment Division, County of Hawaii and other informed persons, are assumed to be correct, and that I assume no responsibility for the accuracy of information furnished by others. The County of Hawaii Tax Office indicated the lot size as follows: Commercial area 130,124 square feet Residential area 37,060 square feet Subject property is zoned CV -10 Parking area consisting of 43,000 square feet is adequate for a commerical Complex. Residential lot consisting of 28,975 can be subdivided into two lots. 2. That I assume no responsibility for matters legal in character nor do render any opinion as to the title of the property which is assumed to be good, and all existing liens and encumbrances have been disregarded and the subject parcel is appraised as though free and clear under responsible ownership and competent management; 3. That I have made no survey of the subject property and assume no responsibility in connection with such matter; 4. That the photographs and maps in this report are included to assist the reader in visualizing the property; The appraiser assumes that there are no hidden conditions in the property, subsoil or its structures which would render it more or less valuable than the estimate of value arrived at in this report. The appraiser assumes no responsibility for such conditions or for engineering work which might be required to discover such factors, currently or hereafter; 6. Cost and professional engineering counseling were not included in the scope of this assignment. That possession of this report, or a copy thereof, does not carry with it the right of publication, nor may it be used for any purpose by any but the client, and in any event, only with proper qualifications; 8. That neither all nor any part of the contents of this report shall be conveyed ROBERT G. BLOOM, JR, CGA -162 County ofHa ali LIMITING AND CONTINGENT CONDITIONS to the public thorough advertising, public relations, news, sales or other media, without the written consent and approval of the appraiser or firm with which he is connected, or any references to the Appraisal Institute; 9. That the valuation in this report, or any data and/or any part of this report, must not be used in conjunction with any other appraiser, and are invalid if so used without the permission of the appraiser; 10. That unless otherwise stated in this report, the existence of hazardous substances, including without limitation asbestos, polychlorinated biphenyls, petroleum leakage, or agricultural chemicals, which may or may not be present on the property, or other environmental conditions, were not called to the attention of nor did the appraiser become aware of such during the appraiser's inspection. The appraiser has no knowledge of the existence of such materials on or in the property unless otherwise stated. The appraiser, however, is not qualified to test such substances, such as asbestos, urea formaldehyde foam insulation, or other hazardous substances or environmental conditions, which may affect the value of the property. The value estimated is predicated on the assumption that there is no such condition on or in the property or in such proximity thereto that it would cause a loss in value. No responsibility is assumed for any such conditions, nor for any expertise or engineering knowledge required to discover them; 11. The American with Disabilities Act (ADA) became effective January 26, 1992. I have not made a specific compliance survey land analysis of this property to determine whether or not it is in conformity with the various detailed requirements of the ADA. It is possible that a compliance survey of the property, together with a detailed analysis of the requirement of the ADA. could reveal that the property is not in compliance with one or more of the requirements of the Act. If so, this fact could have a negative effect upon the value of the property. Since I have no direct evidence relating to this issue, I did not consider possible non-compliance with the requirements of ADA in estimating the value of the property; 12. That I am not required to give testimony; or attendance in court by reason of this appraisal with reference to the property or properties in question, unless arrangements have been previously made heretofore. ROBERT G. BLOOM, JR, CGA -162 1-2 County ofH—ad APPRAISER'S CERTIFICATION The undersigned appraiser hereby certifies: That I was requested by William Takaba County of Hawaii Finance Department to undertake an appraisal of the fee simple interest in an appraisal on the property located in Pahoa, Hawaii identified hereinafter; as TMK 1-5- 2:24 Division number three. 2. That I have no undisclosed interest in the property, present or contemplated. That I have personally inspected the subject property. That I have no personal interest or bias with respect to the subject matter of this appraisal report or the property involved. 5. That my employment and compensation were not contingent upon reporting predetermined values or the amount of the value estimates; and that the appraisal assignment was not based upon a requested minimum valuation, a specific valuation, or the approval of a loan, if applicable. 6. That to the best of my knowledge and belief, the statements and opinions contained herein are correct, subject to the limiting condition herein set forth, and that no pertinent factual data relative to the subject has been knowingly withheld or overlooked; and that the appraiser has complied with the USPAP competency provision and is certified in the State the property is located. That this appraisal 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; and that the use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives; That no one other than the undersigned prepared the analyses, conclusions and opinions concerning real estate that area set forth in this appraisal report. ROBERT G. BLOOM, JR, CGA -162 1-3 County ofnawaH APPRAISER'S CERTIFICATION 9. That my estimate of the market value of the fee simple interest in the property appraised, in as condition was as follows: Current Market Value ROBERT G. BLOOM, JR, CGA -162 14 Cmnry ofH"ad PURPOSE OF THE APPRAISAL The purpose of this appraisal was to estimate: { 1) the current market value of the fee simple interest in the subject property is identified on Hawaii Tax Maps as Third Division, Tax Map Key 3-1-5-2:24. This value estimate considers the land as vacant and unimproved. {2} The current "as is" market value of the fee simple site. The subject property is located in a neighborhood that is commonly referred to as Pahoa Village. Subject is located two lots south of the Puna Road. The commercial zoned portion of the subject property is presently being used as a parking lot and a farmers market. No legal improvements exists on the subject property. The topography of the land is gentle sloping and level. The zoning is Commercial Village -10,000 square feet minimum and Residential 10,000 square feet minimum. All utilities are available for the residential lots. The function of this report was to determine the fee simple interest and fair market value of the vacant land in, as is condition. The date of valuation was as of November 11, 2003. ROBERT G. BLOOM, JR, CGA -!61 1-5 County ofH"aff DEFINITIONS AND TERMINOLOGY Various special terms are used in this report. These terms are defined in the following paragraphs to assist the reader in understanding special appraisal terminology. The first two definitions are excerpts from Real Estate Appraisal Terminology, revised edition, and 1993, published by the Institute of Real Estate Appraisers. Real Estate Appraisal Terminology Society of Real Estate Appraisers Revised Edition, 1984 —Beryl N. Boyce Ph.D. SRPA Market Value The most probable price in terms of money which a property should bring in 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 is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 1. Buyer and seller are typically motivated. 2. Both parties are well informed or well advised, and each acting in what they considered their own best interest. A reasonable time is allowed for exposure in the open market. Payment is made in cash or its equivalent. 5. Financing, if any, is on terms generally available in the community at the specified date and typical for the property type in its locale. 6. The price represents a normal consideration for the property sold unaffected by special financing amounts an/or terms, services, fees, costs, or credits incurred in the transaction. 2. Hawaiian Terms The Hawaiian words "mauka" and "makai" are commonly used in the islands as indicators of direction. The word "mauka" translates to towards the mountains and "makai" translates to toward the ocean. From the location of the subject property, "mauka" refers to the south, which "makai" refers to the north. ROBERT G. BLOOM, JR, CGA -162 1-6 County ofHaw-1 DEFINITIONS AND TERMINOLOGY Cash Equivalent A price expressed in terms of cash as distinguished from a price which is expressed all or partly in terms of the fact amount of notes or other securities which cannot be sold at their face amount. The cash equivalent price of a sale property may differ from its contract price and should represent the present worth at time of sale of all cash and other considerations paid for the real property as opposed to other portions of stated consideration which may be paid for services, fees and/or non -realty items. 4. Investment Value Value to a particular investor based upon individual investment requirements, as distinguished from the concept of market value, which is impersonal and detached. Fee Simple An absolute fee, a fee without limitations to any particular class or heirs or restrictions, however; subject to the limitations of eminent domain, escheat, policy power, and taxation. ROBERT G. BLOOM, JR, CGA -162 1-7 County ofH"alf SECTION la - PROPERTY DATA PROPERTY DATA A. Identification The subject property consists of one parcel as outlined on the following maps. They are identified on State of Hawaii Tax Maps as Third Division, Tax Map Key: (3) 1-5-2:24. The property is situated within the Puna District of Hawaii and located 14 miles from the downtown Hilo Post Office. B. Easements and Restrictions My research did include the existence of a drainage easement D-2 consisting of 3,183 square feet. Please see the five page indenture between AMF AC, INC., and the County of Hawaii signed on 12" day of February 1974. C. Zoning The subject property is County zoned Commercial Village -10,000 Square Feet and Residential 10,000 Square feet. D. Utilities Water, telephone and electricity are all presently readily available and located in subject property's neighborhood. All roads are dedicated and County of Hawaii maintained. ROBERTG. BLOOM, JR, CGA -/62 la -1 Cmnry ofXawai! PROPERTY DATA E. ASSESSED VALUE UPDATED The Count of Hawaii's Property Assessment Division has assessed the subject property as of the years 2002- 2003 as follows: The indicated annual tax for the subject as of 2002-2003 tax rate of $9.85 per $1,000 net taxable value for Commerical and Unimproved Residential land. Table 1: Assessed Valuation TMK Assessed Values Pitt Indicated Code Annual Tax Land Bldg Total 1-5-2:24 $260,200 None $260,200 Commercial $2,562.97 $40,800 $40'800 Residential 401.88 TOTAL $301,000 None $301,000 $2,964.85 The assessment ratio for ad valorem tax purposes is set at 100 % of the assessor's estimate of fair market value. From past experience, however; it has been observed that the assessor's values vary widely form market value and, consequently; very little reliance is normally placed on assessed values as a measure of market value. ROBERT G. BLOOM, JR., CGA -J62 la -2 Co -ay ofHawaB sj IiI.Y) ATS~ 41. L � T O • 0 — w' ° n s • r � � .n. N A W •A - - �+.�..Tir n .�,....,y �~' ''� � ' lig b rA OY1 0 ey \ • 19.0)0 A— Q \ Q � A of T e r �r Mwo owc Uc PLAT I 5 02 Anr=. A«iM0 .ARuu ca. of iv.HOI vI[t�6P, oLfVA, NANA// • Property Address: Kauhale Street Nwase No.: City: Pahoa State: HI Zip: 96778 Front view of the subject. Residential portion located at the rear of Tax Map Key 3) 1-5-2-23. Lot size consists of 29,054 square feet. r s- 1 w � Y...JIn- "Yw �a}'��:1- dpi• � � n _,: i °'Tfi � ti-. Zi Front view of the subject. Residential portion located at the rear of Tax Map Key 3) 1-5-2-23. Lot size consists of 29,054 square feet. s. Ir City: Pahoa State: HI Zip: 96778 Rear view of the subject property showing the residential land area. Residential area consists of approximately 37,060 square feet. Access to the Commercial Village zone portion of the property. CV -10 area consists of 130,124 square feet. -y r 41 7p wz-, ��4-.64 -�Y.. 4 V... 9N?•T.Iv. ` s �,f�4 �! . ,r 1 . a.Y *,, -"� ... •' � - `tom .t - .-,f_: � +�- r ,i� �tf�.� E.. �x.*��-_ �•i� °tom- WK� . Rear view of the subject property showing the residential land area. Residential area consists of approximately 37,060 square feet. Access to the Commercial Village zone portion of the property. CV -10 area consists of 130,124 square feet. Access to the Residential 29,054 square foot lot. Rear view of the subject. City: Pahoa State: HI Zip: 96778 View of the subject property from Kauhale Street. View of the County Fire Station located across the street from the subject. FLOOD MAP 1 FloodMap Legend Flood Zon" Mer narrW M So0yareooekp Mao arf W e/hr 11M >r 906yernmopaau AraM YWMad 1M sppysr eopdrg 4vr a qxd sy topyer aoodrn Nh ealoday heard _ P.O" seas f100Mry maga ssr "ICC*y hMna Mara, Wonsa w prsaHe nave hasards MNs M *upped m"avwssaad F" Flood kdornsWon Comm nky: 155155 - UNINC. AREA Property is not in a FnMspaod flood hranf area. kap Nunbr: 155100 1375C Mp orc WMV1995 P". 1W5C Flps. 15001 Zane: X Neither Tnnsanrca Flood Haaad Crhficmon (rFNC) nar MI make any nyremsemorr or eaman ies to my party ovooeni,p the Denten, mouamy r crnpke ess of this flood report. ndluaro any urraay of m eefoad ilry or fenass for a pmkWr mposa. Neehr TFHC nor ACI nor the solar of tNs flood report "have my Sabeey W any turd party Ir any use r misuse of this food n pon. Bank of Hawaii Building, 120 Pauahi Street, Suite 205, Hilo, Hawaii 96720 (808) 961-3704, FAX. (808) 9614600 SECTION lb - OTHER INFORMATION SALES HISTORY OF THE SUBJECT PROPERTY Subject property is not listed for sale. No information was available for the sales history of the subject property as researched in the State Tax Office Printouts or transfers of title. ROBERT a BLOOM, JR, CGA -10 lb -1 County ofH"aa NEIGHBORHOOD DESCRIPTION The subject property is located in Pahoa. Pahoa is a rural town with a population of 1,027 people, according to the 1990 census bureau. The closest airport is the Hilo International Airport, which is located approximately 15 miles east. The vast majority of the use is via -inter -island flights by Aloha and Hawaiian Airlines. The closest economic center is Hilo. The resident population of Hilo (Census tract 202 through 209) has remained relatively stable. For example, the district's resident population stood at 44,639 in 1990 and grew 3,115 in 1995 m. The estimated growth between 1990 to1995 was 6.98%. The population for Hilo as of July 2001 was estimated to be 62,000+-. The estimated Island of Hawaii Population as of the 1990 Census was 120,317, 1995 estimated was 138,040, and in July 2001 was estimated 148,327. Moreover, the Hawaii County Department of Research and Development projects a steady population growth for the Island of Hawaii despite the recent slowdown in the local economy. As the County seat of government, Hilo has the vast majority of county and state workers. The University of Hawaii at Hilo helps Hilo's economy stay relatively stable during the last 5 years. Unemployment for the Island of Hawaii approached 12 % during early part of 2000, however; it is less than 10% as of July 2001. The forecast for the unemployment rate is between 10 % to 15 % for the next 2 years. Climate throughout the year in Hilo is pleasant with average temperatures ranging from 71.2 Fahrenheit during the coolest months and 75.9 Fahrenheit during the warmest months. The extreme temperatures range from a low of 53 degrees to a high of 94. The average rainfall at the Hilo Airport is 128 inches per year. Although the economic activity has been slow and sluggish during the past five -six years, the long -tern outlook for Hilo remains optimistic. No adverse conditions exist which affect the desirability of neighborhood properties. ROBERT G. BLOOM, JR., CGA -162 1b-2 COQ, of Hai U 2000 DEMOGRAPHIC PROFII.E REPORT FOR HILO CDP, HAWAII SOURCE: HAWAII COUNTY RESEARCH AND DEVELOPMENT Subject Number Percent Subject Number Percent Total Population 40,759 100.0 Vietnamese 52 0.1 Other Asian 1,261 3.1 SEX AND AGE Native Hawaiian 5,348 13.1 Male 19,950 48.9 & Pacific Islander 0.1 Female 20,809 51.1 Native Hawaiian 4,606 11.3 Guamanian 23 0.1 Under 5 Years 2,301 5.6 Samoan 84 0.2 5 to 9 Years 2,859 7.0 Other Pacific Islander 635 1.6 10 to 14 Years 2,965 7.3 Some other race 385 0.9 15 to 19 Years 3,319 8.1 Two or more races 12,120 29.7 20 to 24 Years 2,806 6.9 25 to 34 Years 4,352 10.7 EMPLOYMENT STATUS 35 to 44 Years 5,576 13.7 Population 16 years 45 to 54 Years 5,842 14.3 & Over 32,054 100.0 55 to 59 Years 2,215 5.4 In labor force 18,848 58.8 60 to 64 Years 1,701 4.2 Civilian labor force 18,681 58.3 65 to 74 Years 3,473 8.5 Employed 16,776 52.3 75 to 84 Years 2,471 6.1 Unemployed 1,915 6 85 Years and Over 879 2.2 Percent of civilian Libor force 10.3 (X) Median Age (years) 38.6 (X) Armed Forces 167 0.5 Not in labor force 13,206 41.2 18 years and over 30,694 75.3 Females 16 years & Male 14,700 36.1 Over 16,664 100.0 Female 15,994 39.2 In labor force 9,177 55.1 21 Years and over 28,617 70.2 Civilian Libor force 9,138 54.8 62 Years and over 7,818 19.2 Employed 8,376 50.3 65 Years and over 6,823 16.7 Own children under Male 2,941 7.2 6 years 2,572 100.0 Female 3,882 9.5 All parent in family RACE In labor force 1,526 59.3 One Race 28,639 70.3 OCCUPATION White 6,976 17.1 Management, professional, Black or African 183 0.4 and related occupations 5,636 33.6 American Indian & Service occupations 3,122 1&6 Alaska Native 137 0.3 Sales and office occupations 4,726 28.2 Asian 15,610 38.3 Farming, fishing, & Asian Indian 19 -Forestry occupations 373 2.2 Chinese 641 1.6 Construction, extraction, Filipino 2,364 5.8 and maintenance 1,415 8.4 Japanese 10,863 26.7 Production, transportation Korean 410 1.0 and material moving 1,494 8.9 2000 DEMOGRAPHIC PROFILE REPORT FOR HHA CDP, HAWAII SOURCE: HAWAII COUNTY RESEARCH AND DEVELOPMENT Subject Number Percent Subject Number Percent INDUSTRY Mean earning (dollars)[ 47,642 (3) Agriculture, forestry, fishing and hunting, mining 672 4.0 With social security Income 5,246 35.9 Construction 1,104 6.6 Mean social security Income 0.1 Manufacturing 377 2.2 (dollars)[ 12,128 M Wholesale Trade 550 3.3 With supplemental Income 628 4.3 Retail Trade 2,131 12.7 Mean supplemental security Transportation and wharehousing Income (dollars)1 5,956 (X) and utilities 1,129 6.7 With public assistance Information 374 2.2 income 1,452 9.9 Finance, insurance, real estate, and Mean public assistance rental and leasing 768 4.6 Income (dollars)1 4,643 (X) Professional, scientific, management With retirement Income 3,522 24.1 adminstrative, and waste management services 1,254 7.5 Mean retirement income Educational, health, and social services 4,306 25.7 (dollars)l 18,647 M Arts, entertainment, recreation, accomodation Families 10,204 100.0 and food services 1,782 10.6 Less than $10,000 773 7.6 Other services (except public transportation) 797 4.8 $10,000 to $14,999 395 3.9 Public Administration 1,522 9.1 $15,000 to $24,999 1,229 12.0 $25,000 to $34,999 1,214 11.9 CLASS OF WORKER $35,000 to $49,999 1,659 16.3 Private wage and salary workers 10,416 62.1 $50,000 to $74,999 2,279 22.3 Government workers 4,904 29.2 $75,000 to $99,999 1,364 13.4 Self -Employed workers in own not $100,000 to $149,999 959 9.4 incorporated business 1,327 7.9 $150,000 to $199,999 183 1.8 Unpaid family workers 119 0.7 $200,000 or more 149 1.5 Median family Income 48,150 M INCOME IN 1999 Households 14,593 100.0 Per Capita income (dollars)1 18,220 M Less than $10,000 1,876 12.9 Meadian earnings (dollars): $10,000 to $14,999 919 6.3 Male Full -Time, year round $15,000 to $24,999 1,977 13.5 workers 36,049 M $25,000 to $34,999 1,824 12.5 Female Full -Time year round $35,000 to $49,999 2,253 15.4 workers 27,626 M $50,000 to $74,999 2,655 18.2 $75,000 to $99,999 1,650 11.3 Total Housing Units 16,028 100.0 $100,000 to $149,999 1,061 7.3 Specific owner -occupied $150,000 to $199,999 196 1.3 units 8,196 100.0 $200,000 or more 182 1.2 Median household income (dollars) 39,139 (3Q With earnings 10,882 74.6 (3) Not Applicable 1 If the denominator of a mean value or per capita value is less than 30, then that vatic is calculated using a rounded aggregate in the numerator. Robert G. Bloom, Jr. CGA -162 County of Hawaii DESCRIPTION OF THE PROPERTY 1. Identification The property under appraisal is identified as TMK 1-5-2:24, Third Tax Division. Location is on the mauka side of Puna Road, and less than 15 miles from the Federal Building and downtown Hilo Post Office. Recorded owner of the fee simple site is Monika Mallick. No legal description was available at the time this appraisal report was prepared. 2. Delineation of Title The fee simple title is in the ownership described above. This information was provided by the County of Hawaii Tax Office records. Subject was not listed for sale with the MLS service at the time this report was prepared. 3. Site Data Pertinent site data is highlighted in the following paragraphs. Photographs are presented at the end of the section. 4. Sales History of the Subject property: Lot size listed 2.99 Acres Zoning RS -10 Sale 1}12/124/1980 Sales Price $128,300 Deed Book/Page 15248/32 Grantor: Not listed Grantee: AMFAC Sale 211/18/2001 Sales Price $84,430 Deed Doc 01-007072 Grantor: AMFAC Grantee: Sacharov, Maria Luisa, Married Woman (Tenants in Severalty) Sale 3}3/20/2002 Sales Price $100,000 Exchange Doc 02-048284 Grantor: Sacharov Grantee: Mallick, Monika, Single Woman (Tenants in Severalty) ROBERT G. BLOOM, JR, CGA -161 lb -4 County gfH"aff DESCRIPTION OF THE PROPERTY A. Other Site Data Census tract identification if CT 211.00. It lies in Zone X, Base Flood Elevations determined by HUD's Flood Insurance Rate Map, Community Panel No. 155166 1375 C, dated June 2, 1995. Flood insurance is not required. In as much as a soils investigation, no report was available at the time of the appraisal. E. Zoning and Land Use The site is in the State Mixed zoned use district. Uses permitted in this zoning district includes Commercial Village 10,000 Square Feet minimum and Residential 10,000 Square Feet minimum. ROBERT G. BLOOM, JR. CGA -162 lb -5 Cmnry ojHa ail HIGHEST AND BEST USE That reasonable and probable use that supports the highest present value, as defined, as of the effective date of the appraisal. Alternately, 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 highest and best use is also defined as, "the most profitable continuous legal use to which a property is adapted and needed or likely to be in demand in the foreseeable future. The single most important factor which influences optimum use is the zoning as it exists and the feasibility of amending it to another or higher use." The subject property is a split zoned CV -10 and RS 10 Zoned property. Under CV -10 zoning the following uses are permitted: All retail uses, banks, barber shops and beauty shops, laundrette, coffee shops, drug stores, cocktail lounges, night clubs, business schools, medical and dental centers, commercial amusement centers, used car lots, small scale craft shops, auto service stations, accessory uses. Residential 10,000 square feet the following permitted uses: Single Family Residential Golf Courses Country Club Parks Playgrounds Truck garden Home Occupations ROBERT G. BLOOM, JR, CGA -161 lb -6 County ojHawall METHOD OF APPRAISAL The valuation of real estate involves three approaches. Neither the Income Approach nor Cost Approach were developed or included in this report due to the fact that the subject property was unimproved. The Sales Comparison Analysis was applied. The Sales Comparison Analysis was applied in estimating the value of the subject property. The subject properties present use as a parking lot was not considered to its highest and best use, however; the use as a parking lot is legal and conforming. The methodology of the direct sales comparison approach is described in the beginning of the valuation section. In the final reconciliation, the analysis of fair market value and most probable sales price was arrived at via the sales comparison analysis. I have concluded that the highest and best use of the property is a development at the rear of the property consisting of approximately 87,120 square feet of CV -10 zoned land. Table one includes the value for this area. Table two includes the value of the approximately 27,099 square feet CV -10 which was considered to be the parking area for the 87,120 square foot lot. Table three includes the value of the 15,903 square foot lot zoned CV -10. Table three also includes the drainage easement consisting of 3,183 square feet. Table three also considered the value of the land highest and best use to be a parking lot. The reviewer of this report should be aware that no developmental plans and or specifications were presented to this appraiser. The final estimate of value may change when and if developmental plans are presented to this appraiser. ROBERT G. BLOOM, !R, CGA -/62 lb -7 County of Ha 11 SECITON 2 - THE SALES COMPARISON APPROACH THE SALES COMPARISON APPROACH Subject Site Subject site area consists of 130,124 square feet Commercial Village Zoned CV -10 is irregular in shape. The highest and best use of the site was concluded to be a use that enhances the marketing plan for the Downtown Pahoa Improvement. It should be noted that the Commercial Portion of the property is divided into three sections. Section one is presently being used a parking lot. Section two is divided by a drainage easement that splits the larger portion of the lot. Section three is the best portion of the property and is located at the rear of the lot with access from Kauhale Street as well as the old Puna Road. Subjects commercial portion of the property has the potential to be the center of downtown Pahoa. Residential is fragmented with two separate parcels. Parcel one is located off a private road and consists of 28,975 square feet. This lot has potential to be subdivided into two parcels. The lot appears to drop substantially below grade and will require a creative design to maximize the potential of the land. Parcel two abuts the commercial zoned portion of the property and is a legal residential lot. The lot is triangular in shape and also will require a creative design. Parcel number two may have added value depending what is developed on the CV -10 portion of the property. Fee Simple Valuation Analysis Commercial CV -10 portion This appraiser researched vacant land transactions that were considered similar to the subject property. These transactions were all located within 25 mile radius of the subject property. Criteria adopted in selecting indicators for land value analysis are summarized below and adjustments were required for the following: Location All transactions were considered to be located in an area that was considered either equal or superior to the subject property. 2. Zoning The analysis covered only Commercially zoned sites, which were believed to produce the most reliable measures of the value of the subject site. 3. Date of Sale Indicators occurring from November 2001 to May 2003 were considered in the analysis. No pending sales were available. ROBERT G. BLOOM, JR, CGA -161 2-1 Como, ofH"all THE SALES COMPARISON APPROACH 4. Physical Characteristics Indicators with reasonable access with or without utilities, and with a gentle developable topography were considered. One site with existing improvements was considered. Due to the lack of truly similar size properties, smaller commercial zoned properties were considered. MARKET DATA ANALYSIS: The guidelines and benchmark that were applied in selecting vacant land transactions were as follows: A. Location My research concluded that the majority of commercial land sales activity was involved in Tax Map Key Section 1-5, 1-7, and 1-9 areas. B. Zoning My research covered only those sites zoned commercial. C. Date of Sale My research included sales from 2001 D. Parcel Size Commercial -zoned sites ranged from 7,607 square feet to 213,444 square feet were analyzed. I have included eight recorded transactions for analysis. A brief analysis of each transaction is now presented. ROBERT G. BLOOM, JR, CGA -/62 2-2 County ojH"al! THE SALES COMPARISON APPROACH Fee Simple Valuation Analysis: Subject property is a split zone property as follows: Commercial zoned CV -10, consists of approximately 130,122 square feet and analyzed as follows: Lot 3 consisting of 87,120 square feet. Table 1 Lot 1-B-1 consisting of 27,099 Square feet. Table 2 Easement Portion consisting of 15,903 square feet. Table 3. Total commercial CV -10 130,122 square feet. Residential Portion zoned RS -10 square feet. Table A: Consisting of 28,973 square feet. Table B: Consisting of 8,087 square feet. Total residential land area 37,060 square feet. Total residential and commercial area 167,182 square feet or 3.8380 acres. Table 1: Subject property is a split zoned property with irregular shapes. Please see plat map. In analyzing the subject property, I have determined the highest and best use of the property is to maximize the CV- 10 zoned portion of the property located above the drainage easement and referred to as lot three located on table one. Lot three consists of approximately 87,120 square feet. In estimating the most probable sales price of lot three I considered eight commercial zoned properties. Table 1} Lot size 87,120 square feet CV -10 zoned. Lot size is approximate. Adjustments for cash equivalency, time, location, zoning and physical characteristics were considered and applied as follows: Cash equivalency No adjustment required for any of the transactions: ROBERT G. BLOOM, JR, CGA -162 2-3 County ojH"aa THE SALES COMPARISON APPROACH 2. Time No time adjustment required. Commercial activity and commercial development outside of Hilo continues to be depressed. 3. Location A location adjustment required for sales indicators two, seven, and eight. Sales two, seven and eight were located in Volcano and considered to be superior to the subject property and adjusted — 60%. 4. Zoning All transactions were zoned commercial and reflective of the subject property. No adjustments required. 5. Physical Characteristics Considered in this adjustment size, shape, topography, and access. All sale indicators were considered superior and adjusted -.20%. 6. Frontage and Visibility No adjustments were required for visibility and street frontage. Visibility is more dependent on location. Both frontage and visibility are considered to be critical to the success of a project within a commercial endeavor. Table 1 } Lot size 87,120 square feet CV -10 zoned. Lot size is approximate. Adjustments for cash equivalency, time, location, zoning and physical characteristics were considered and applied as follows: Cash equivalency No adjustment required for any of the transactions: Time No time adjustment required. Commercial activity and commercial development outside of Hilo continues to be depressed. ROBERT G. BLOOM, JR, CGA -161 - C-nry ojH—all THE SALES COMPARISON APPROACH Location A location adjustment required for sales indicators two, seven, and eight. Sales two, seven and eight were located in Volcano and considered to be superior to the subject property and adjusted — 60a/o. Zoning All transactions were zoned commercial and reflective of the subject property. No adjustments required. 5. Physical Characteristics Considered in this adjustment size, shape, topography, and access. All sale indicators were considered superior and adjusted -.20%. 6. Frontage and Visibility No adjustments were required for visibility and street frontage. Visibility is more dependent on location. Both frontage and visibility are considered to be critical to the success of a project within a commercial endeavor. 7. Access All transactions had equal access to public streets and no access adjustment was necessary. The Market Data Sales adjustments are summarized on the next case. The adjusted unit price of the recorded transactions ranged from $1.15 per square foot to $3.81 per square foot. The mean-- unit value of $2.30 per square foot and the median— unit of $2.30 per square foot. The weighted indicated value estimate was $2.14 per square foot. In the final analysis, this appraiser placed the heaviest emphasis on the weighted estimate. Based upon the evidence above, the "as is" fee simple value of subjects estimated site size of 87,120 square feet was estimated to be $187,000. The computed value is as follows: 87,120 Square Feet @ $2.14 per square foot equals $186,436.80 Most probable sales price $187,000 (Rounded) ROBERT G. BLOOM, JR, CGA -162 �+ c Cmnry OfXawatl ti � r t+ m m m N II v W Q N rl N N a N > 5 0 O O O O O O O O f? aaX Q W a F m W 0 U H P it N 11 N r m m Ol r m m r M m N O� ^+ ro N b 7 N h UI U X N Y u v o � O v : O m N M O m O m O m O m N M N M W • N 41 4 z 0 0 0 0 0 0 0 0 e N aV! *� Eo t+ h H Nb o N m m m m m m m m N ? p, U o 0 0 0 0 0 0 0 I rT N 0 u O M m H N O O O O O O O O I U 0 V O P O O O O P P '•I � V • N M O N 01 10 P P l0 •� N W] M M P M �O N x e a R I • t • N 'n M M vl r W P m w m w M 0 m r o m 1O -I 4 14 A O O O O O O O W rl W m M N M O Oi P r p Y• ti O .i m .� O N r vl y r • M P P N O 1p P �l1 O N P O� m O O O w O N N M N m P P m a 0 0 0 0 0 0 0 0 Id +1 W O M O M O t0 N M O N O N ill N l0 m 2 M L4 O O O O O O O O pO V > >. u ++ M p, C T >. Q z O tQ) h O N m O N r r ✓1 P (� N •• N M .--I •• I I N I m r -I N N I 01 m I (•I ti I 1 I r1 'i b O N P m � r m m N II O1 II W Q a a > 5 E, a aaX Q W F m W 0 U H P N � N ^+ ro N b 7 N h UI U X u v o � m o 0 3 0 • N N IL a aV! *� h H o N n u � � O W a y m G u N 0 u O M m H N 4 e a THE SALES COMPARISON APPROACH Fee Simple Valuation Analysis: Table 2, Parcel 1-13-1 Lot two consists of approximately 27,099 square feet and is zoned Commercial Village. In estimating the most probable sales price of Parcel 1-13-1, I have considered eight commercial zoned properties. Table 2} Lot size 27,099 square feet, CV -10 zoned. Lot size is approximate. Adjustments for cash equivalency, time, location, zoning and physical characteristics were considered and applied as follows: Cash equivalency No adjustment required for any of the transactions: 2. Time No time adjustment required. Commercial activity and commercial development outside of Hilo continues to be depressed. Location A location adjustment required for sales indicators two, seven, and eight. Sales two, seven and eight were located in Volcano and considered to be superior to the subject property and adjusted —60%. 4. Zoning All transactions were zoned commercial and reflective of the subject property. No adjustments required. 5. Physical Characteristics Considered in this adjustment size, shape, topography, and access. All sale indicators were considered superior and adjusted -.60% to reflect the use as a parking lot. ROBERT G. BLOOM, JR. CG4-162 2-7 C—nry ofHawait THE SALES COMPARISON APPROACH 6. Frontage and Visibility No adjustments were required for visibility and street frontage. Visibility is more dependent on location. Both frontage and visibility are considered to be critical to the success of a project within a commercial endeavor. Access All transactions had equal access to public streets and no access adjustment was necessary. The Market Data Sales adjustments are summarized on Table 2. The adjusted unit price of the recorded transactions ranged from $.83 per square foot to $2.04 per square foot. The mean-- unit value of $1.54 per square foot and the median -- unit of $1.61 per square foot. The weighted indicated value estimate was $1.57 per square foot. In the final analysis, this appraiser placed the heaviest emphasis on the weighted estimate. Based upon the evidence above, the "as is" fee simple value of subjects estimated site size of 27,099 square feet was estimated to be $42,500. The computed value is as follows: 27,099 Square Feet @ $1.57 per square foot equals $42,545.43 Most probable sales price $42,500 (Rounded) ROBERT G. BLOOM, JR, CGA -161 �� Co nyofH"aB MR M ++ P m O P r .7 Ifs IEHgQ1 O ri N N P M N N N II N O O O O O O O O 1? ♦+ f7a o o o o O o O O m O x IO O O O O O O O w •V F W T y! •Rd � (q M m P M 01 N N N m O O O r 01 P N P M W W U N r I V4 N � y � � � ro ti ro � N y H .d I W N u UI u O l0 O O o O �0 l0 •. a q z U o o a o 0 0 0 0 N 0 p cl o P 0 P 0 P 0 P 0 P 0 P 0 P o P O F u1 D pA T a U o 0 0 0 0 0 0 0 1 r4 U 43 O O O O O O O O 0 0 0 0 0 0 0 0 O 'N � N G x Q V 0 0 0 0 0 0 0 0 O P O O O O P P >y a!( rp.4 • h U � b h VI C �+ ill w U ..1 N N m O ri m O m P N m O 0 N l0 � r a N n �] a 19 [y 1 02 Ol V p N T Ol r -i l0 01 �0 M N N H O W rl •-I O O O N ri N r£ N p 41 y p� p .,1 ai {�'. p PI a 64 ri N l0 VI . N u7 N r N M N r N 10 N 02 FO 0 aP N �D N N l0 O O O1 A 41 P P O N P l0 O M P N m w O O 10 N m O ao �1 a OI N M N 0 P P N H i o O O o 0 0 0 0 y (� 4 M M M w M N u) N m M PI ■� r1 O I .i O I N O I N O I N O I N O I M O I M O I (� N •• .-1 M N •• I I N I Ol .-1 N N I Qt O1 b O a z # n N P m M P N O P O .7 Ifs IEHgQ1 N N N P s N II 0 II a a O m x w F m W W U N r V4 N � y � N � ro ti ro � N y H .d W N UI u U x U pl O � m o 0 3 0 N y W 'U N 7 O 'N � N G 4a h U � b h VI C �+ H G � � r a N n �] 19 THE SALES COMPARISON APPROACH Fee Simple Valuation Analysis: Table 3, with Drainage Easement Lot three consists of approximately 15,903 square feet and is zoned Commercial Village. In estimating the most probable sales price of Parcel with easement, I have considered eight commercial zoned properties. Table 3} Lot size 15,903 square feet, CV -10 zoned. Lot size is approximate. Adjustments for cash equivalency, time, location, zoning and physical characteristics were considered and applied as follows: 1. Cash equivalency No adjustment required for any of the transactions: 2. Time No time adjustment required. Commercial activity and commercial development outside of Hilo continues to be depressed. Location A location adjustment required for sales indicators two, seven, and eight. Sales two, seven and eight were located in Volcano and considered to be superior to the subject property and adjusted —70%. 4. Zonin All transactions were zoned commercial and reflective of the subject property. No adjustments required. Physical Characteristics Considered in this adjustment size, shape, topography, and access. All sale indicators were considered superior and adjusted -.70% to reflect the use as a parking lot. ROBERT G. BLOOM, JR, CGA -162 2-10 CountyofK sl THE SALES COMPARISON APPROACH 6. Frontage and Visibility No adjustments were required for visibility and street frontage. Visibility is more dependent on location. Both frontage and visibility are considered to be critical to the success of a project within a commercial endeavor. 7. Access All transactions had equal access to public streets and no access adjustment was necessary. The Market Data Sales adjustments are summarized on Table 3. The adjusted unit price of the recorded transactions ranged from $.75 per square foot to $1.84 per square foot. The mean— unit value of $1.39 per square foot and the median— unit of $1.45 per square foot. The weighted indicated value estimate was $1.41 per square foot. In the final analysis, this appraiser placed the heaviest emphasis on the weighted estimate. Based upon the evidence above, the "as is" fee simple value of subjects estimated site size of 15,903 square feet was estimated to be $7,500. The computed value is as follows: 15,903 Square Feet @ $1.41 per square foot equals $7,283.00 Most probable sales price $7,500 (Rounded) ROBERT G. BLOOM, JR, CGA -L 62 County ofHawau W. W U � N Y � rl P N ro N m h b {� Y � x O m m � S U N i O N O ri m N �1 3 0 ry � '{ w PC O O O O O a h 7 u o 0 0 0 0 0 0 0 0 a y ro m � a N u 0Ei1 > o y S O O N .i •+ N a� 4 00000000 .; N a' w y-1 • yl ill r P O N N m O -1 '.•1 m t? N N !h N VT ul t? .� O � N 1 ,N-i N0 41) x 1W� o o 0 0 0 �pC In 4 0 F • W O o O O O O O O I p7 0 o O 0 0 0 0 0 A o 0 0 0 0 0 0 0 of • '[f v FI Ic • O O O O O O O O 'Gj 0 O 0 P 0 O 0 O 0 O 0 O 0 P 0 P of O • U Y ++ m m N O m ul m O x q m4 m m w N W [\7 [•I I m InS N m lD l0 ill ul O C� H • - O .ti N m r r m m o .1 „ "i N .i 7 .0 N m m 0 m o m P r m y • y O r-1 m N O ✓ r N a m q i Z a P Irl 10 N N � o o m iti IC P O P O P m O �O O {� • y P .11 10 M rl to O N 01 61 • 5• m r r io r m N m ul � N o 0 0 0 0 0 o voi A •• 0 0 0 0 0 0 o ti • U "1 m a N N l/l ri N N M N N t? lh N !? (? r'1 • r-I N N N r-1 M M p o 0 0 0 0 0 0 0 p • •0 1T I 1 I 1 I I • • >1 as A z° z o m h o N m o N r r N P a N •• rl M N •• I I N ✓] •• •• •• P P P I I Ol .-1 r-1 rl I O1 Ol K N I 1 I I N I 1 N • I N ill r N I ri N I N P m W U � N Y � rl P N ro m h U v W � Y � x X 0 � U N o � N O � 3 0 ry � w O a h 7 A o N A a y ro m � G N u 0Ei1 > o y S O O N .i •+ N a� E a N a' THE SALES COMPARISON APPROACH Fee Simple Valuation Analysis: Table A Residential Lot A consists of approximately 28,973 square feet and is zoned Residential. In estimating the most probable sales price of Lot A, I have considered five residential zoned properties. Table A} Lot size 28,973 square feet, RS -10 zoned. Lot size is approximate. Adjustments for cash equivalency, time, location, zoning and physical characteristics were considered and applied as follows: 1. Cash equivalency No adjustment required for any of the transactions: 2. Time No time adjustment required. 3. Location No location adjustment was required all sales indicators were located in the Pahoa Village area. 4. Zonin All transactions were zoned residential and reflective of the subject property. No adjustments required. Listing Adjustment Listing indicators were adjusted to reflect the most probable sales price. Listing indicators 1, 2 and 3 were adjusted from —15% to —50%. ROBERT G. BLOOM, JR, CGA -162 2-13 County ofHauoa THE SALES COMPARISON APPROACH 6. Physical Characteristics Considered in this adjustment size, shape, topography, and access. All sale indicators were considered superior and adjusted -.10% to —50% to reflect the irregular shape. 7. Access All transactions had equal access to public streets and no access adjustment was necessary. The Market Data Sales adjustments are summarized on Table A. The adjusted unit price of the recorded transactions ranged from $.73 per square foot to $1.12 per square foot. The mean— unit value of $.95 per square foot and the median -- unit of $.98 per square foot. The weighted indicated value estimate was $0.92 per square foot. In the final analysis, this appraiser placed the heaviest emphasis on the weighted estimate. Based upon the evidence above, the "as is" fee simple value of subjects estimated site size of 28,973 square feet was estimated to be $26,500. Subject property has the potential to be subdivided into two lots. The computed value is as follows: 28,973 Square Feet @ $.92 per square foot equals $26,555.16 Most probable sales price $26,500 (Rounded) ROBERT G. BLOOM, A, CGA -162 2-14 County ofHa n E m x ro v u a M b r � !T Itl m N � ro I yl 4 O U F w n 0 0 m u m m b N N N 1+1 O +� O O O O O �4 N T , 11 U a W � r N O O •• � " 0 0 0 0 0 � z E NJ N o 0 0 0 o O N 7 T p U o 0 0 0 0 I In O N O O O 6 N m m O O ~ o 6'7 01 pQ xj O O o O O a O u p O P p 0 >, °z a o m H N T O N N m d1 D7 a M U N 'Un r m m r io Ei W H O .E u c c r n m W 11 u � 4 a w . . W r .i o �n m r WFry b 0� m r P P o m �•, p C 4 Ia0 bl N N rl N 3732. W O F o 0 0 0 0 y o 0 0 0 IICC is O C m m p O U • U W a N N N N N ■ O N. f. - C I I K .i A .01 .V 4J b Q N N N h W a a a m N N N r1 C N t+l t+1 N r1 N �1 r-1 ri r-1 'i ri I 1 I I I I In i4Q ✓1 N � N J1 I F rl N fel V � -n H 7 7 ml I m x ro v u a M b r � !T Itl m N � ro I yl 4 O U F w n 0 0 m u m m N THE SALES COMPARISON APPROACH Fee Simple Valuation Analysis: Table B Residential Lot B consists of approximately 8,087 square feet and is zoned Residential. In estimating the most probable sales price of lot B, I have considered five residential zoned properties. Table B} Lot size 8,087 square feet, RS -10 zoned. Lot size is approximate. Adjustments for cash equivalency, time, location, zoning and physical characteristics were considered and applied as follows: Cash equivalency No adjustment required for any of the transactions: 2. Time No time adjustment required. 3. Location No location adjustment was required all sales indicators were located in the Pahoa Village area. 4. Zoning All transactions were zoned residential and reflective of the subject property. No adjustments required. 6. Listing Adjustment Listing indicators were adjusted to reflect the most probable sales price. Listing indicators 1, 2 and 3 were adjusted from —15% to —50%. 6. Physical Characteristics Considered in this adjustment size, shape, topography, and access. All sale indicators were considered inferior and adjusted +.05% to +10% to reflect lot being cleared and also irregular in shape. ROBERT G. BLOOM. JR. CGA -162 2-16 Cmmry 6fHa ft THE SALES COMPARISON APPROACH The Market Data Sales adjustments are summarized on Table B. The adjusted unit price of the recorded transactions ranged from $.41 per square foot to $1.99 per square foot. The mean— unit value of $1.99 per square foot and the median -- unit of $1.78 per square foot. The weighted indicated value estimate was $1.40 per square foot. In the final analysis, this appraiser placed the heaviest emphasis on the weighted estimate. Based upon the evidence above, the "as is" fee simple value of subjects estimated site size of 8,097 square feet was estimated to be $11,500. Subject may have value added due to the close proximity to the commercial development. 8,087 Square Feet @ $1.40 per square foot equals $11,321.80 Most probable sales price $11,500 (Rounded) ROBERT G. BLOOM, JR, CGA -/62 2-17 County gfHa an 11 A n o 14 5 °a m a+ ro v 4 a o a r b m ❑ o M . rte. . u f h O CIO,, o 0 N � 0 0 0 0 0 0ri ) vrr N O O O O O O to N N N M H O T� x O O O O O rl M r it r-i M Ot e-I m N N P m O p Y N O) m 0 O w • rO�J q E N N '� a ri ri rl r-I O I rn .mow y y,l o vl O o 0 m o 0 $l a o 0 0 rl • 0 w {{ N Y1 .yj r Ol N N 01 N \ TJi a rl In P 01 M O M H n a r n m a� • J4 01 a 04 . . . C N N N N N N N N y (? •,'I a of j AAA � N r P O r m r P P O O ®aj N N r-I Ily�i71 a [y O O O O O O O O O O m• o m m o 0 Say • U +/ m m m N t0 of m ol o 0 r C G G I I 09 rl '1 -rl a a a m N N N N P M rl N P P N Y I I I I I N �i ill ul N ul vl I I ti H ,ti ti ti ti .y N xi 7 m 11 A n o 14 5 °a m x ro v 4 a r b m ❑ o N a � a u � h O CIO,, o 0 N N 4 0 n 0 THE SALES COMPARISON APPROACH The Sales Comparison Analysis, a valuation procedure predicated on "The Principle of Substitution", states that a prudent purchaser would pay no more real property than the cost of acquiring an equally desirable substitute on the open market. The Principle further assumes that the purchaser will consider all alternative purchase options available to him, and that he will act rationally and prudently on the basis of this information. "The methodology the of this approach is an empirical investigation through analysis of the similar, recently sold properties. The reliability of this technique is dependent upon certain criteria including {1 } the availability of comparable sales data, {2} the verification of the sales data, {3} the degree of comparability or extent of adjustment necessary for time and other differences, and {4} the absence of non -typical conditions affecting the sales price. " The subject property is classified as split zoned land. ROBERT G. BLOOM, JR, CGA -167 2-19 County ofH"all SALES COMPARISON DATA Heaviest emphasis was given to the direct sales comparison analysis. The appraiser's reliance upon this approach was based on the fact that neither the cost nor income approaches were considered relevant to the valuation process. The historical sales data, listing data and current market conditions were considered in the final estimate of value. It is my opinion that the fee simple value of the land as if vacant via the market comparison analysis was estimated to be: TWO HUNDRED SEVENTY FIVE THOUSAND DOLLARS {$275,0001 ROBERT G. BLOOM, JR., CGA -162 2-20 Cbmry ofHmwut SECTION 2-B - RESIDENTIAL COMPARABLES Zoning: Residential RS -10 10,000 Sq. Ft. minimum FEMA Flood Hazard Designation: Zone X. Assessment Data: Land $10,900 (2002-2003) Building $ NONE Total Utilities: County Water available to the property. Sewer is by septic system. Indicated Land Rate: Total Purchase Price: $N/A Indicated Land Value: $14,000 Land Area: 9,876 sq. ft. Indicated Land Rate price per sq. ft. $1.42 1 ROBERT G. BLOOM, JR., CGA -162 SALES E4DICATOR NO. 1 Tax Map Key: 1-5-11: Parcel # 38 of the Third Taxation Division Location: Nanawale Homesteads, Pahoa Village, Island of Hawaii, State of Hawaii Grantor: Kamiya, Kenneth Y. H/W (Tenants By Entirety) Grantee: Listed (Not Sold) Transaction: N/A Asking Price: $28,000 Purchase Price: N/A Listing/Sales Ratio Days on Market: 1408 Terms of Sale: All Cash Sale Verified: Ernest M. Medeiros 935-3378 Listing Agent Land Area: 9,876 Sq.Ft. Site Description: The parcel is irregular shape. Road is unpaved and typical for the area. No adverse easements or conditions. Lot is overgrown. Zoning: Residential RS -10 10,000 Sq. Ft. minimum FEMA Flood Hazard Designation: Zone X. Assessment Data: Land $10,900 (2002-2003) Building $ NONE Total Utilities: County Water available to the property. Sewer is by septic system. Indicated Land Rate: Total Purchase Price: $N/A Indicated Land Value: $14,000 Land Area: 9,876 sq. ft. Indicated Land Rate price per sq. ft. $1.42 1 ROBERT G. BLOOM, JR., CGA -162 Status: Listing agent informed this appraiser no offers have been submitted since the property was listed over 3 %: years ago. Sales History: No previous sales history within the last 36 months. Source Tax Office Records. 2 ROBERT G. BLOOM, JR., CGA -162 P.L.4 r 00 7e T:Jho A—k. rb At— N......Ao. po 4-4,, —70, Ap.r 4 Myr .."4f 43 Q A 44 —1)0 f I rA4 01) r/. 740 47 4-.4 W-A.J Ag.wol tP" 14 OA./ IV=,, •OJ1/ 97 Pw .OAO AIA Land Area: 20,712 Sq. Ft. Site Description: The parcel is irregularly shaped and located near the Pahoa Post Office. Lot is overgrown. Zoning: RS -15, 15, 000 square feet minimum FEMA Flood Hazard Designation: Zone X, an area of moderate or minimal hazard from the main source of flood. Assessment Data: Land $19,400 (2002-2003) Building 0 Total St9,d�G Utilities: Telephone Service, County water. Sewer is by septic tank. Indicated Land Rate: Total Purchase Price: $N/A Indicated Land Value: $25,400 Land Area: 20,712 Sq. Ft. RS -15 Indicated Land Rate per sq.ft. $L23 C ROBERT G. BLOOM, JR, CGA -162 SALES INDICATOR NO. 2 Tax Map Key: 1-5-13: Parcel # 11 of the Thud Taxation Division Location: Off Main Street, Pahoa Village, Island of Hawaii, State of Hawaii Grantor: Various Owners Grantee: N/A Transaction: N/A Asking Price: $29,900 Purchase Price: N/A Listing/Sales Ratio N/A Days on the Market: 172 Terms of Sale: Conventional Verified: Listing Broker Robert Riley 935-2991 Land Area: 20,712 Sq. Ft. Site Description: The parcel is irregularly shaped and located near the Pahoa Post Office. Lot is overgrown. Zoning: RS -15, 15, 000 square feet minimum FEMA Flood Hazard Designation: Zone X, an area of moderate or minimal hazard from the main source of flood. Assessment Data: Land $19,400 (2002-2003) Building 0 Total St9,d�G Utilities: Telephone Service, County water. Sewer is by septic tank. Indicated Land Rate: Total Purchase Price: $N/A Indicated Land Value: $25,400 Land Area: 20,712 Sq. Ft. RS -15 Indicated Land Rate per sq.ft. $L23 C ROBERT G. BLOOM, JR, CGA -162 Current Status: As of November 2003 no offers have been received. Source: Robert Riley 935-2995 Sales History: No previous sales history within the last 3 years. Source Tax Office Records. 4 ROBERT G. BLOOM, JR, CGA -167 • • 1 S I L • /v N A N A AV A L L O�IANT Al I A* L J 7,C A O J �� v .. tf... • 7 #"-fL /LAT N .TA• 6a.?N �7JV NT J/.:-- 000 .rte."`14, 0IL f,37 l I (� A,,, !•. wig.►% 1 � s.•.._W J ��r 7 MS•w.I Gi w M 4 A tr W i 1 . K �! ��'ti^y R �� IiY n �Yw w.b Kid I��l �1r • ri} li 1 �`'"•� tiIry _ _ �I i �-mow � MfY, 1 `\ e~ If P 40 Z l / 1 1 j dK ® B ar* n nYV TKW "A BLAEAU ��. owf Vl �j r • PLAT I 5 13 OF MMIAKIIAA,i1, PUN/ti FUMWI. ( 0'"PORTION -gS-e-C% TO d AMCxf IfAULI I M•nort SALES INDICATOR NO. 3 Tax Map Key: 1-5-13: Parcel 12 of the Third Taxation Division Location: Located of the Main Street, Pahoa Village, Island of Hawaii, State of Hawaii Grantor: Various Grantee: N/A Transaction: N/A Asking Price: $39,900 Purchase Price: N/A Sales/Listing Ratio: N/A Days on the Market: 172 Terms of Sale: Conventional Sale Verified: Tax Office Records/Robert Riley Listing Agent 935-2991 Land Area: 25,407 Sq. Ft. Site Description: Flag shaped with a private roadway that appears not to be adverse and maybe included in the sale. There are no visible adverse easements or conditions on the property. Zoning: RS -15, Residential -15,000 square feet minimum. FEMA Flood Hazard Designation: Zone X, an area of moderate or minimal hazard from the main source of flood. Assessment Data: Land $21, 000 (2002-2003) Building 0 Total $ Utilities: Telephone Service, Electric, and County Water are available to the property. Sewer is by septic tank. Indicated Land Rate: Total Purchase Price: N/A Indicated Land Value: $32,000 5 ROBERT G. BLOOM, JR., CGA -162 Land Area: 25,407 Sq. Ft. Indicated Land Rate per sq. ft. Current Status: No offers have been received since the property was listed. Sales History: No sales history within the last 36 months. Source Tax Office Records. ROBERT G. BLOOM, JR. CGA -/62 .� 1 YANJNIL MINI /Tf �. IJ ' •♦.� t.rr x.nr IIi'I tgry. }O�.yx qr �TiL�TLTr • �� � '� � Jxa/M•/[ WC ®� ."'Tr,; �' • ^�'�x t T y� � . ®Qa � Y i }N•. r r i 7 +Ny v Ile +.,♦ A r rl.y y `� 4 •V.0 I .\.r r.nlnq•. 1W11.I.�IW1 13 .mio+arwu.wiaa.tiw www. saxcr roow.ia ..... �..�^ SALES INDICATOR NO. 4 Tax Map Key: 1-5-11: Parcel #41 of the Third Taxation Division Location: off the Main Road, Pahoa Village, Island of Hawaii, State of Hawaii Grantor: YOZA, Allan M. Grantee: Warren, Robert E. , Kranson, Deborah Lei H., Kranson, Scott Brady Transaction: Deed dated February 14,2003 and recorded in Document No. 03-027563. Asking Price: N/A Purchase Price: $26,000 Ratio: N/A. Days on the Market: N/A Terms of Sale: Conventional Sale Verified: Tax Office Records Land Area: 9, 030 Sq. Ft. Site Description: Parcel shape is irregular with no adverse easements noted. Old home not assessed located on the property. Zoning: RS -10, Residential 10,000 square feet minimum FEMA Flood Hazard Designation: Zone X, an area of moderate or minimal hazard from the main source of flood. Assessment Data Land $9,900 (2002-2003) Building N/A Total �as,onn Utilities: Telephone Service, Overhead Electric, and County Water are available to the property. Sewer is by septic tank. Indicated Land Rate: Total Purchase Price: Indicated Land Value: Land Area: 9,900 Sq. Ft. Indicated Land Rate per sq. ft. ROBERT G. BLOOM, JR. CGA -162 $26,000 $13,000 $1.31 Current Status: Property is being occupied with a small dwelling. County Records do not show any record of the dwelling being permitted. Sales History: No sales history within the last 36 months. Source: Tax Office Records. See indicator number S. 1.1 ROBERT G. BLOOM, JR, COAJ62 ,.awr n �- Y 9Y.G`-i• ua , .«r i 'Y –yr ".t ♦ ,u.r a+�w rwr,r �� 77 ` 1 QD0 ,.awr n �- Y 9Y.G`-i• ua , SALES INDICATOR NO. 5 Tax Map Key: 1-5-11: Parcel 942 of the Third Taxation Division Location: Located off the main Road, Pahoa Village, Island of Hawaii, State of Hawaii Grantor: Tanoue, Selina N. Revocable Trust Grantee: Kranson, Scott Brady, H. W. Tenants by Entirety Kranson, Deborah, Lei, H/W/ Tenants by Entirety Transaction: Deed dated July 18, 2001 and recorded Doc -01-109951 Asking Price: N/A Purchase Price: $12,000 Listing/Sales Ratio N/A Terms of Sale: All Cash Sale Verified: Tax Office Records/Tanoue, Selina Land Area: 10,452 Square Feet Site Description: This comparable consists of an interior slightly irregular shaped parcel. It is located near downtown Pahoa There are no visible adverse easements or conditions on this property. Zoning: RS -10 Residential 10,000 square feet. FEMA Flood Hazard Designation: Zone X, an area of moderate or minimal hazard from the main source of flood. Assessment Data: Land $11,500 (2002-2003) Building $ 0 Total 51 L 5�� Utilities: Telephone Service, Electric, and County Water are available to the property. Sewer is by septic tank. Indicated Land Rate: Total Purchase Price: $12,000 Indicated Land Value: $12,000 Land Area: 10,452 Sq. Ft. Indicated Land Rate per Sq. Ft. $1.1.5 0 ROBERT G. BLOOM, JR, CGA -167 Current Status: As of November 2003 the lot is vacant and a portion of the property has been fenced. 10 ROBERT G. BLOOM, JR, CGA -161 ♦a..r a / ✓I i+ii'a ..W muFis I wry +`. j _ I MW IY..9ALIt_..urN ���� "' • ` � IYV// ITTT /w«./! /vrI/� /K rw /1 +4.� ® � r•."l.«' ®® '4'3' � ....♦ • r� n.w rn n n.III "•Y i MAS« vcwr n 4 U • glloAN', M. SECTION 2-C - COMMERCIAL COMPARABLES SALES INDICATOR NO. 1 Tax Map Key: 1-5-7: Parcel 20 of the Third Taxation Division Location: Keaau/Pahoa Highway, Island of Hawaii, State of Hawaii Grantor: Kaneshiro and Sons Enterprises Grantee: HMP LLC, A Company or Corporation Transaction: Deed dated and recorded November 11, 2001 Document 01- 172791 Asking Price: $475,000 Purchase Price: $230,000 Listing/Sales Ratio -51.57% or 48.42% of asking price Days on Market: 169 Terms of Sale: All Cash Sale Verified: Tax Office Records, Merle Lam Listing Agent 935-3080 Land Area 213,444 Sq. Ft. Site Description: The parcel is an irregular shaped No adverse easements or conditions. Zoning: CG -S7.5. General Commercial and CN -20 -Neighborhood Commercial - 20, 000 square feet minimum FEMA Flood Hazard Designation: Zone X Assessment Data Land $172,000 (2001-2002) Building $ NONE Total $172.000 Utilities: County Water available to the property. Sewer is by septic tank. Indicated Land Rate: Total Purchase Price: $230,000 Indicated Land Value: $230,000 Land Area: 213,444 sq. ft. Indicated Land Rax price per sq. ft. $1.08 Status: The new buyers have not submitted any plans to the County as of 1 ROBERT G. BLOOM, JR, CGA -162 April 2003. Sales History: No previous sales history within the last 36 months. Previous 11/21/89 for $250,000. Source Tax Office Records. 2 ROBERT G. BLOOM, JR, CGA -161 • Iw �s K rf ,A M 11 e i Yr :rte INOE l 1 5 • I I I JJI I•�ry� J I 1 I Imo. I I II I y�� � t-s•i I rA 1 4 hL111 � �� •s N.Y ao Y/�LAOr-` I73 • 4rW6 — a 1 M1 YC fMl t1I =�- � 140-4VIC h ,■r.. � Loy J`rrll�i[ W Yrs 1r SC./• !br h ,■r.. � Loy J`rrll�i[ Yrs 1r SC./• !br • +.r _ fO ff ti y 24 7i 1�ti O U Q. A- - AiI/04 1t / tY c 7001 �' x" e. /.�.� .- 01. ...-roar •� 3 9r ,LL..� "... •....t r.... : � ..... �. 7 �--:�";� � alt � I � ` z . C Hw .. i : / ■ '"nL �r SEC AT 07 CED NLPO KO "At -77 rllNA, NAAM11 '�" KAli:l n+JOO IF SALES INDICATOR NO. 2 Tax Map Key: 1-9-5: Parcel 2 of the Third Taxation Division Location: Volcano, Island of Hawaii, State of Hawaii Grantor: Various Owners Grantee: Onouye, Ronald T & Marie S Transaction: Deed dated April 23, 2001 and recorded in Document No. 077016 TCT 00530195. Asking Price: $290,000 Purchase Price: $290,000 Listing/Sales Ratio Difference: None 100% of asking price Days on the Market: 17 Terms of Sale: All cash to seller Verified: Tax Office Records/Al Inouye 935-2995 Selling and Listing broker Robert G. Bloom, Jr. appraised this property before it was listed and sold. Land Area: 37,505 Sq. Ft. Commercial CV -10 $6.13 per square foot 60,940 Sq. Ft. RS -20 or S.99 per square foot. Site Description: The parcel is irregularly shaped and located adjacent to the Volcano Post Office. There are no visible adverse easements located on the site. Zoning: CV -10, Commercial Village 10,000 square feet minimum FEMA Flood Hazard Designation: Zone X, an area of moderate or minimal hazard from the main source of flood. Assessment Data Land $172,800 (2001-2002) Building 0 Total $172.800 Utilities: Telephone Service, Catchment water. Sewer is by septic tank. Indicated Land Rate: Total Purchase Price: $290,000 Indicated Land Value: $290,000 Land Area 37,505 Sq, Ft. 3 ROBERT G. BLOOM, JR. CGA -162 CV -10 indicated Land Rate per sq. ft. $km Over all rate per square foot(bleuded rate $2.95 per square foot Current Status: As of April 2003 the land has been cleared by the new owner. No plans have been submitted to the County of Hawaii planning Department. The owner owns the adjacent parcel which is referred to as the Volcano Store. Sales History: No previous sales history within the last 3 years. Source Tax Office Records. 4 ROBERT G. BLOOM, JR, CGA -/62 • • PLAT I OI PLAT 04 l� K/ L A U G A D O A O w mim MS JVI I t p ° n � Nissl •S' � /�«.�-- `+S�- ;� �.a. i�.�.n�i-' 01 rD yl1 SN orr, 1O Iar �w �.( � � 1UUI[ LOT 1 � • c r 1 A M AL LI j` A .y✓ti _.� A C � •S �� Tltv'� ZOMi KGo�nFLAT - t 9 05 /kr. qu,1 �UMQ L07�. PVNA,NANAII"y-0.NC' "1=ti'l 1 ' XµLIYs A. SALES INDICATOR NO. 3 Tax Map Key: 1-5-12: Parcel 18 of the Third Taxation Division Location: Pahoa Village, Island of Hawaii, State of Hawaii Grantor: L.A. Services Inc. Grantee: McKenzie, Barbara Nijensohn, Jore C. Transaction: Deed dated December 18, 2002 and recorded in Document No. 02-225430. Asking Price: $69,000 Purchase Price: $60,000 Sales/Listing Ratio: -13.04% or 86.96% of asking price Days on the Market: 971 Terms of Sale: Conventional Sale Verified: Tax Office Records/David Taylor Listing Agent 969-7863 Land Area: 7,643 Sq. Ft. Site Description: Parcel shape is slightly irregular. There are no visible adverse easements or conditions on the property. Zoning: CV -10, Commercial Village -10,000 square feet minimum. Grand fathered zoning FEMA Flood Hazard Designation: Zone X, an area of moderate or minimal hazard from the main source of flood. Assessment Data: Land $61, 200 (2001-2002) Building 0 Total $61.200 Utilities: Telephone Service, Electric, and County Water are available to the property. Sewer is by septic tank. Indicated Land Rate: 5 ROBERT O. BOOM, JR, CG4-162 Total Purchase Price:_,, $60,000 Indicated Land Values .. _ $60,000 Land Area: 7,646 Sq. Ft. Indicated Land Rate per sq. & Current Status: No plans have been submitted to the County Planning Department. Subject is a typical lot size for the downtown Pahoa. Sales History: No sales history within the last 36 months. Source Tax Office Records. ri ROBERT O. BLOOM, JR, CGA -162 1 1\ m O PLAT 05 - CR t 7 D o ; �; f • �' �, '� © caw I) calm 4F2 KlN,4 r sof, aH ''^r..,yy `'� `J + 4)jf • / /fry , \ �1r t � ^rr 'q�'ra7 r►W 1 ra ® r ` Tu (sea,#�� � pnf ,yrsof 1 Mme% /JS tom, } Md.. A// A.& .I iy CV— d. L/d jo A— Oir AT 0 Q NEW H4NOA .5ECT-OV WAIAKANIULA PWVA, HAWAII — j SST TO CNANG£ SALES INDICATOR NO. 4 Tax Map Key: 1-7-19: Parcel 30 of the Third Taxation Division Location: Kurtistown Island of Hawaii, State of Hawaii Grantor: John A. Leonard Grantee: Crittenden Jr. Charles R. Transaction: Deed dated March 4,2002 and recorded in Document No. 02-037597. Asking Price: $165,000 Purchase Price: $155,000 Ratio: 93.94% or —6.06% from the asking price. Days on the Market: 1225 Terms of Sale: Conventional Sale Verified: Tax Office Records Land Area: 26, 306 Sq. Ft. Site Description: Parcel shape is irregular with no adverse easements noted. Zoning: CN -10, Neighborhood -Commercial 10,000 square feet minimum FEMA Flood Hazard Designation: Zone X, an area of moderate or minimal hazard from the main source of flood. Assessment Data: Land $118,400 (1999-2000) Building 66,000 Total 184.400 Utilities: Telephone Service, Overhead Electric, and County Water are available to the property. Sewer is by septic tank. Indicated Land Rate: Total Purchase Price: Indicated Land Value: Land Area: 26,306 Sq. Ft. Indicated Land Rate per sq.ft. ROBERT G. BLOOM, JR, CGA -!6I $155,000 $135,000 $5.13 7 Current Status: As of April 29, 2003 the owner is enclosing the carport, which was built without a permit and is now permitted, into a real estate office. The dwelling was previously used as a dental office has suffered disrepair and was considered to have a value of $20,000. Source Jerry Bragdon 808-961-5888. Sales History: No sales history within the last 36 months. Source: Tax Office Records. ROBERT G. BLOOM, IR, CGA -162 9--- _---- O/_—_--___—_����__�_� NCW YOL C.INO S qD./O •W a a* o o . t o A �s w , D 9 SALES INDICATOR NO. 5 Tax Map Key: 1-5-12: Parcel 15 of the Third Taxation Division Location: Pahoa Village, Island of Hawaii, State of Hawaii Grantor: Okumura, Shuuko Trust Grantee: Lang, Matthew Jr. Lang, Borom P. Transaction: Deed dated September 25, 2002 and recorded Doc -02-169266 Asking Price: $59,500 Purchase Price: $50,000 Listing/Sales Ratio -15.97% or 84.03% of asking price Terms of Sale: All Cash Sale Verified: Tax Office Records/May 2002 MLS Don Weeks Principle Broker Pahoa Realty 965-9500. Land Area: 7,142 Square Feet Site Description: This comparable consists of an interior slightly irregular shaped parcel. It is located in downtown Pahoa. There are no visible adverse easements or conditions on this property. Zoning: CV -10 commercial village 10,000 square feet. FEMA Flood Hazard Designation: Zone X, an area of moderate or minimal hazard from the main source of flood. Assessment Data: Land $57,100 (2001-2002) Building $ 0 Total $57.100 Utilities: Telephone Service, Electric, and County Water are available to the property. Sewer is by septic tank. Indicated Land Rate: Total Purchase Price: $50,000 Indicated Land Value: $50,000 Land Area: 7,142 Sq. Ft. Indicated Land Rate per Sq. Ft. V.W 0 ROBERT O. BLOOM, JR, CGA -162 Current Status: As of April 2003 the buyers have not submitted any plans to the County of Hawaii Planning or Building Department. Don Weeks of Pahoa Realty informed this appraiser that the DOM of 589 is reflective of the commercial market in Pahoa. 10 ROBERT G. BLOOM, JR, CG4-167 M p /YAT at I -y, OR I) D w+d � mow./ •�A.r! ""vs�®�-----�--�-�»�>�:� ��� • m n `arra a.�.r �"r.r�."-i. ®� � � "� 1p 4 t paves T NEWFTIHOA .9£CTIaV MkWWANIULA R/NA, HAWAII a SALES INDICATOR NO. 6 Tax Map Key: 1-5-14: Parcel 7 of the Third Taxation Division Location 15-2813 Main Street, Island of Hawaii, and State of Hawaii Grantor: Yamaguchi, Walter T Grantee: Hara Land Development, Partnership Transaction: Deed dated June 8, 2001 and recorded Doc -01-086324 Asking Price $350,000 Purchase Price: $250,000 Listing/Sales Ratio: -28.57% or 71.43% of listing price Terms of Sale: All Cash Sale Verified: Tax Office Records/May 2000 MLS Jack May —C-21 Listing agent 935-7119. Site inspection. Land Area: 69,696 Square Feet Site Description: There are no visible adverse easements or conditions present on the property. Walter Yamaguchi as part of the sales contract removed improvements. Zoning: CV -10, Commercial Village 10,000 square feet minimum. FEMA Flood Harard Designation: Zone Y, Assessment Data: Land $279,500 (2001-2002) Building $ 1,800 Total $281.300 Utilities: Telephone Service, Overhead Electric, and County Water are available to the property. Sewer is by septic tank. Indicated Land Rate: Total Purchase Price: $250,000 Indicated Land Value: $250,000 Land Area: 69,696 Sq. Ft. Indicated Land Rate per square foot V,,;$, 11 ROBERT G. BLOOM, JR, CGA -162 Current Status: As of April 2003 a proposed commercial complex has not yet been submitted. Sales History: No Sales history within the last 36 months. Source: Tax Office Records 12 ROBERT G. BLOOM, !R, CGA -J62 a n q H T i P�ql es 1.� I 8 0 O •.ter.. Gi a I/t O I -- O L L r .ur! .a...f F .a...f A.. v 0 0 K •� O r�vT. q N L e r O O u.sf M.•mA O I -- O L L r .ur! .a...f F .a...f A.. v 0 0 K •� O arm-rk• O i O I -- O L L r .ur! .a...f F .a...f A.. v SALES INDICATOR NO. 7 Tax Map Key: 1-9-4: Parcel 7 of the Third Division Location: Volcano Road, Island of Hawaii, State of Hawaii Grantor: Kaleiwahi, Marie Grantee: Larson -Leyte, Lorna, Trustee Transaction: Deed dated and recorded May 30, 2003. Document 03-106818 Asking Price: $349,000 Purchase Price: $325,000 Listing/Sales Ratio: -6.8741, of asking price or 93.12'% Days on Market: 17 Terms of Sale: Purchase Money Mortgage $200,000 Down 6% interest Amortized over 4 years Verified: Ketura S. DeMattos Land Area: 42,000 Sq. Ft. Site Description: Interior lot with no easements. Zoning: CV -7.5. Commercial Village 7500 square feet minimum. FEMA Flood Hazard Designation: Zone X. Assignment Data: {2001-2002} Land: $134,400 Building: $ None Total: $134,400 Utilities: County water with septic system. Indicated Land Rate: Total Purchase Price: $325,000 Indicated Land Value: $325,000 Land Area: 42,000 indicated Land Rate per square foot: $ 7.73 13 ROBERT G. BLOOM, JR., CGA -162 Status: Vacant as of November 2003. Sales History: Previous sales history: NONE Source: Tax Office Records 14 ROBERT G. BLOOM. JR. CGA -162 r.011jr . rAor 'a' rur o� nur or iur or AXALCA -075 0 6 }� E d RASO rv«"O 3 Armow t I 9 04 I o " -%AAw zor4 roar FON Pt PWY ASS UEP NJMUS - SMCT TO 00" -- t 7�� (IiIO�II �h o t a ' �b. tt Z g � 0 y � SALES INDICATOR NO. 8 Tax Map Key: 1-9-4: Parcel 5 of the Third Division Location: Old Volcano Road, Island of Hawaii, State of Hawaii Grantor: Nagata, Lynn M & Brilhante, Christopher A. Grantee: Fujiyama, Kenneth (Married Man (Tenants in Severalty) Transaction: Deed dated and recorded 5/23/2003. Document 00-099911 Asking Price: $295,000 Purchase Price: $286,150 Listing/Sales Ratio: -3.0% of asking price or 97.00% Days on Market: 36 Terms of Sale: Conventional -All Cash Verified: Tax Office Records, Ken Fujiyama Buyer Land Area: 43,560 Sq. R. Site Description: Interior lot with no adverse easements or conditions. Zoning: CV -10. Commercial Village 10,000 square feet minimum. FEMA Flood Hazard Designation: Zone X. Assignment Data: (2002-2003) Land: $113,400 Building: $ Total: $113,400 Utilities: County water with septic system. Indicated Land Rate: Total Purchase Price: Indicated Land Value: Land Area: Indicated Land Rate per square foot: ROBERT G. BLOOM, JR., CGA -167 $286,150 $286,150 43,560 $ 6.57 15 Status: Presently vacant. Sales History: Previous sales history 1/6/1995 Sales Price $105,000. Source: Tax Office Records DOC 03-099911 Note' Subject property is a split zoned property with lot 7A Zoned commercial —CV -10 43,560 square feet. Lot 7B zoned residential 10. Residential 10,000 square feet minimum. Land area 34,848. Purchase price was separated as follows: 7A total purchase price $286,150 CV -10 $6.57 per square foot 7B total purchase price $173,850 RS -10 $4.99 per square foot 16 ROBERT G. BLOOM, JR, CGA -162 PL,r a, WdMR MM. L L a _ .e... a n dma PWAAV ra recur �sxssrm NRroscs - su.+�cr ro aur .Loa. •r A"r or. a0m SECTION 3 - RECONCILIATION RECONCILIATION In estimating the market value of the fee simple interest in the subject property, this appraiser utilized the Sales Comparison Approach. This approach is briefly described together in the indicated value estimates in the following paragraphs. In utilizing the Sales Comparison Approach for the split zoned property I analyzed eight fee simple Commercial land transactions and five residential indicators in Pahoa Village. The indicated value of the subject property was based on the Direct Comparison Approach. This approach was given the most weight due to the similar condition of the comparable sales to the subject. Indicated fee simple value by the two the cost and income approaches were considered inappropriate and not developed. The estimate based from the Sales Comparison Approach is considered a reliable and reasonable estimate of value. In the current market, demand for fee simple commercial property and residential property located in the Pahoa Village is slow. Commercial activity usually goes in cycles and with the robust single family residential in the great Puna area perhaps in the next two to three years we will see some developments in Pahoa. This appraiser is satisfied that the Sales Comparison Approach provided the most reliable benchmark of market value. Based upon the analysis provided in this report, the most probable sales price of the fee simple interest in the subject land as of November 11, 2003 was estimated to be: TWO HUNDRED AND SEVENTY FIVE THOUSAND DOLLARS {$275,000} ROBERT G. BLOOM, JR, CGA -162 3-1 Cwnry of "all SECTION 4 - QUALIFICATIONS QUALIFICATIONS OF ROBERT G. BLOOM, JR. CGA -162 COMPANY INFORMATION ROBERT G. BLOOM, JR, REAL ESTATE APPRAISERS, INC. State Certified General Appraiser License #162, exp. 12/31/103 Bank of Hawaii Building 120 Pauahi Street, Suite 205 Hilo, Hawaii 96720 (808) 961-3704 Phone (808) 9614600 Fax lhodhi ex.com Email BUSINESS BACKGROUND Hawaii State Certified General Appraiser since October 14, 1991. License Number CGA -162 Proprietor/President Appraisal practice in Hilo, Hawaii, 1973 to Present Robert G. Bloom, Jr., Real Estate Appraisers, Inc. 120 Pauahi Street, Suite 205 Hilo, HI 96720 (808)961-3704 Appraiser, 1970 -1972 Pomona First Federal Savings and Loan Pomona, California Instructor California Polytechnic University 1971 Ins rector: Real Estate Appraisal Mortgage Banking Real Estate Investments Qualified Expert Witness First, Second and Third Circuit Courts, State of Hawaii Federal District Court, State of Hawaii Grand Jury, Los Angeles County, Los Angeles, California Honolulu Bankruptcy Court - EDUCATION California State Polytechnic University, Pomona, California Graduate School of Business California State Polytechnic University, Pomona, California Bachelor of Science Degree, Real Estate - Major, Finance - Minor ROBERT G. BLOOM, JR, CGA -162 CERTIFICATION Robert G. Bloom, Jr., does hereby certify that, except otherwise noted in this appraisal report: 2. 3. I have no present or contemplated future interest in the real estate that is the subject of this appraisal report. I have no personal interest or bias with respect to the subject matter of this report or the parties involved. To the best of my knowledge and belief, the statement of fact contained in this appraisal report, upon which the analysis, are based, are true; and no important facts withheld from this subject. opinions and conclusions expressed herein have been intentionally overlooked or 4. My employment and compensation for rendering an opinion of value are not contingent upon the value found or upon anything else other than the delivery of this report for the predetermined fee. This appraisal report sets forth all the limiting conditions affecting the analysis opinions, and conclusions contained in this report. The undersigned personally inspected the property, analyzed pertinent data and arrived at the value conclusions as set forjhjn this report. ROBERT O. BLOOM, JR. CGA -162 32bbert G. Bloom, Jr: CGA -162 Hawaii State Certified General l 4-1 C-nry offf"all QUALIFICATIONS OF ROBERT G. BLOOM, JR. CGA -162 COURSES SUCCESSFULLY COMPLETED WITH EXAMS Appraisal Institute Course: 530 Standards of Professional Practice Pan C Location: Hawaiian Regent Hotel in Honolulu Dates: 9/16/99 —9/17/99 Appraisal Institute Course: 610 Cost Valuation of Small, Mined -Use Properties Location: Arizona State University in Tempe, Arizona Dates: September 10-11, 1997 Appraisal Institute Course: 620 Sales Comparison of Small, Mixed -Use Properties Location: Arizona State University in Tempe, Arizona Dates: September 12-13, 1997 Appraisal Institute Course: 500 -Advanced Residential & Narrative Writing Location: University in Tempe, Arizona Dates: February 5-11, 1995 Appraisal Institute Course: 410 Standards of Professional Practice, Part A Course: 420 Standards of Professional Practice, Part B Location: Honolulu, Hawaii Dates: March 24-27, 1993 Appraisal Institute: Course: Standards of Professional Practice (USPAP) Location: Montebello, California Dates: August 19-20, 1991 Society of Real Estate Appraisers Course: 101 Introduction to Appraising Real Property Location: Spartenburg, South Carolina Dates: April 29 -May 11, 1990 Society of Real Estates Appraisers Course: 102, Applied Residential Property Valuation Location: Scottsdale, Arizona Dates: October 2-8, 1988 American Institute of Real Estate Appraisers Course: IA/8-1, Real Appraisal Principles Location: Indiana University, Indiana Dates: March 5-11, 1989 American Institute of Real Estate Appraisers Course: 8-2; Residential Valuation Procedures Location: Indiana University, Indiana Dates: March 12-18,1989 ROBERT G. BLOOM, JR., CGA -162 QUALIFICATIONS OF ROBERT G. BLOOM, JR. CGA -162 SENUNARS AND CONFERENCES ATTENDED Appraising the Tough One's Honolulu, Hawaii—May 1993. Society of Real Estate Professional Practice Conference Honolulu, Hawaii Society of Real Estate Appraisers Annual Conferences Seattle, WA -1991 New York, NY -1989 San Francisco, CA -1988 Anaheim, CA -1986 U.S. Department of Housing and Urban Development Quarterly Meetings Honolulu, Hawaii -1986 to 1993. VARIOUS SEMINARS ATTENDED OVER THE PAST 27 YEARS Capitalization Workshop, AIREA, 1976, Honolulu Money Market Seminar, SREA, 1979, Honolulu Capitalization Theory and Techniques Seminar, AIREA, 1981, Honolulu Money Market and Business Valuation Seminar, AIREA, 1982, Honolulu Recent Developments in Income Property Valuation 1983, Honolulu R41B and Subdivision Analysis, AREA, 1985 Honolulu Discounted Cash Flow Analysis Seminar, AIREA, 1989, Honolulu Highest and Best Use Seminar, AREA 1989 Capitalization Overview Seminar, AIREA, 1990 Standards of Professional Practice, Parts A & B, Appraisal Institute 1991, Honolulu Valuation of Lease Fee and Leasehold Interest & Appraising the Tough Ones Seminar, Appraisal Institute, 1993 Honolulu Understanding Limited Appraisal -General Seminar, Appraisal Institute 1994, Honolulu The Appraiser as Expert Witness and Current Issue of Misconceptions Seminars, Appraisal Institute, 1995, Honolulu. Please see course with exams for the years 1995 thin 1999 American Society of Farm Managers and Rural Appraisers Conservation Easements Seminar January 23-24 Honolulu 2001 Real Estate Disclosure AREA October 11, 2001 Please see above for Appraisal Conferences attended ACCREDITED FINANCIAL LENDING INSTITUTIONS Financial Institutions: American Genual Finance American Savings Bank: Bank of America Bank of Hawaii: ROBERT G. BLOOM, JR, CGA -162 QUALIFICATIONS OF ROBERT G. BLOOM, JR. CGA -162 Bank of the West Bank of Honolulu: Big Wand Mortgage Corporation Cendant Mobility ERC Relocation Central Pacific Bank Charter Funding City Bank Citigroup Private Bank Citifinancial Colorado Federal Savings Bank Community Mortgage Countrywide Mortgage Empire Relocation of America Services Family Mortgage First Hawaiian Bank Fidelity Mutual Life Insurance Company Four Star Mortgage GAC GMAC Mortgage Corp. Home Street Banking Home Mortgage Professionals Metropolitan Mortgage & Securities Co. Millennium Lending LLC Mortgage Group Inc.. Norwest Mortgage North American Mortgage Company Point Financial Inc. PHH Homequity PHH U.S. Mortgage US Property and Appraisal Services Corp US Real Estate Services Inc. Territorial Savings Wells Fargo Home Mortgage Western Pacific Mortgage Credit Unions: Aloha Airlines Employees Federal Credit Union Big Island Federal Credit Union GTE Employees Federal Credit Union Hawaii County Employees Federal Credit Union HELCO Employees Federal Credit Union Hickham Federal Credit Union Navy Federal Credit Union Operating Engineers Credit Union Puna Federal Credit Union University of Hawaii Federal Credit Union ROBERT G. BLOOM, IR, CGA -162 QUALIFICATIONS OF ROBERT G. BLOOM, JR. CGA -162 Others: County and State of Hawaii Federal Projects County Department of Water AGRICULTURAL PARKS Panaewa Keahou Maku'u Pahoa STATE OF HAWAII DEPARTMENT OF TRANSPORTATION HIGHWAY DIVISION PROJECTS: Puainako Street Extension Job No. P-3496 Puninako Street Extension Job No. P-3497 Puainako Street Extension Job No. STP -2000 (4) Mohouh Street Extension Job No. STP -2790 (1) Kahului-Keauhou Parkway Federal Aid Project No RS -0187 (004) Sunrise Ridge Alenaio Bridge Federal Diaster November 2, 2000 County of Hawaii Papaikou Sewerage System Job No. S-3247 & 3491 Keakuanoa Street Extension REVIEW APPRAISER FOR THE FOLLOWING: Bank of Hawaii City Bank CountryWide Wholesale Fannie Mae Western Regional Office First Hawaiian Bank Fleet Mortgage Freddie Mac North American Mortgage Internal Revenue Service United States Government Veterans Administration Department of Justice -U.S. Marshals Service ROBERT G. BLOOM, JR, CGA -162 QUALIFICATIONS OF ROBERT G. BLOOM, JR. CGA -162 PROFESSIONAL CLIENT 1) Jerry Yamada Chief Appraiser State of Hawaii Department of Transportation Highways Division Right -of Way Branch 601 Kamokila Blvd. #691 Kapolei, Hawaii 96707 Phone 808-692-7327 2} Craig Smith, MAI Chief Appraiser First Hawaiian Bank P.O. Box 3200 Honolulu, HI 96847 PH -808-525-6308 3 } Dan Cabrera Chief Appraiser American Savings Bank 915 Fort Street Mall Honolulu, 11196813 PH -808-527-9373 4} Cheryl Riviere Vendor Manager Citibank Private Banking Division 1 Court Square 20'" Floor, Zone 10 Long Island City, NY 11120 PH 718-248-1083 ROBERT G. BLOOM, JR., CGA -162 QUALIFICATIONS OF ROBERT G. BLOOM, JR. CGA -162 Sample of Luxury Properties (S2 million +) and/or areas Appraised on Outer Islands Anini Beach, Hanalei, Kauai Weke Road, Hanalei, Kauai Haena, Halelea, Princeville, Kauai Diamond Head, Honolulu, Oahu Kalamanaole Highway Honolulu, Oahu Koloa Street, Honolulu, Oahu Kabala Ave., Honolulu, Oahu Halakau St, Honolulu, Oahu Puuikena Dr., Honolulu, Oahu Ikena PL, Honolulu, Oahu Kainapau PI., Kabala, Honolulu, Oahu Paani Pl., Speckelsville, Paia, Maui South Kihei Road, Kihei, Maui Wailea, Maui Various Condominium Projects on Maui A] Wailes Resorts B) Makena Surf Resort C) Coconut Grove D) Kapalua Bay Villas E) Kapalua Iron Wood F) Kapalua Golf Villas Sample of Luxury Properties (Sl million +) and/or areas appraised on the Island of Hawaii Keauhou Estates, Kailua-Kona, HI Ocean Front Properties on Alii Drive Alii Point Kona -Bay Estates HualaW Resort Includes Single Family Residences and Condominiums Mauna Kea Bluffs Mauna Kea Fairways (north and south) Mauna Kea Beach The Point at Mauna Lam Championship Ridge Wailea Beach Puako Puakea Ranch Kohala Ranch Sample of Commercial Properties appraised on the Island of Hawaii Ace Hardware: Hilo, Kona, Ka'u, Waimea, Waiakea Villas Shipman Industrial Park Lots Hawaiian Homes Industrial Lots and Improvements State of Hawaii Industrial Lots First Hawaiian Bank, Kamehameha Ave, Central Pacific Bank Building- Kailua-Kona Keopuka Square, Kona The Hawaiian Riviera Resort (Proposed), Ka'u, 3,128 acres The Shenton Waiakea Village Hotel, Hilo, HI Mauna Kea Ranch Garden -Exchange, Hilo, HI Sure Save Supermarket, Ponohawai ROBERT G. BLOOM, 1R., CGA -162 QUALIFICATIONS OF ROBERT G. BLOOM, JR. CGA -162 Sure Save Supermarket, 74 Kawili Street, Hilo, HI Sure Save Supermarket, Orchid band Drive, Puna, HI Orchid Island Hotel, Hilo, HI Ekahi Center, Akoni-Pule highway, Kapaau, HI Kilauea Hotel, 162 Kilauea Street, Hilo, HI Dairy Queen, 317 Wainuenue Ave., Hilo, HI Dodo Mortuary, Hilo, HI River -Mar Building, Hilo, HI Shindo Dental Clinic Sample of Condominium Projects Kauai Sands Hotel, Kauai The Cliffs at Princeville, Princeville, Kauai Hale Moi, Kauai Ka'eo Kai Phase II, Kauai The Hobron in Waikiki, Honolulu, Oahu Craigside, Honolulu, Oahu Chateau Waikiki, Honolulu, Oahu Country Club Plaza, Honolulu, Oahu Marco Polo, Honolulu, Oahu Waialae Gardens, Honolulu, Oahu Nam Kai Hale, Maui Sugar Beach Resort, Maui Maalae Banyans, Maui Island Sands, Maui Maalae Kai, Maui Kana'i Analu, Maui Village by the Sea/Kauhale Makai, Maui Fumio Tsuji Building, Maui The Boardwalk, Maui Auhana Kuleana, Maui Kihei Garden Estates, Maui Kihei Kai -Nam, Maui Kihei Akahi, Maui Hale Kaanapali, Maui Na pili Sands, Maui Na pili Shores, Maui Kahan Resorts, Maui Kalei aloha, Maui The Kuleana Phases I and 11, Maui Valley Isle Resort Condominium, Maui Royal Kahan Maui Hololani, Maui The Mahana and Kaanpali, Maui Papakea, Phases I and II, Maui Kaanpali Alii, Maui The Whaler on Kaanapah Beach I and IL Maui Maui Eldorado II, Maui Lahai a Shores, Maui Pukoo Village, Molokaii Kon Isle Condominium, Hawaii Kon Magic Sands Condominium, Hawaii The Villas at Keauhou Estates, Hawaii ROBERT G. BLOOM, IR., CGA -162 QUALIFICATIONS OF ROBERT G. BLOOM, JR. CGA -162 Sample of Golf Course Properties Discovery Harbour Golf Course, Hawaii Hilo Country Club, Hawaii Naniloa Country Club, Hawaii Sample of Church properties Hilo United Methodist Church, Hilo, HI Henry Opukahaia, Keeau, HI Sample of Hotel Properties Hilo Bay Hotel, Hilo, HI Hilo Seaside Hotel, Hilo, HI Kona Seaside Hotel, Kona, HI Sample of Proposed Subdivision Projects Waialae Pinnacle, Oahu Honokaa Knolls, Hawaii Kona Hills, Hawaii Kmoole Estates, Hawaii Masters at Kaanapali Hillside, Maui Sunrise Ridge Phase I and II Ruthie Subdivision Honomu Country Estates Discovery Golf and Country Club Sample of Medical Buildings Bay Clinic Sample of Federal Projects Puaniako Street Extension, Hilo, HI Sample of Agriculture Properties Sunshine Farms Anderson Farms Kona Agriculture Lots Kapoho Farms Anuenue Farms Sample of Restaurants Harrington Pescatores ROBERT G. BLOOD JR, CGA -162 SECTION 5 - ADDENDA A111k LOCATION MAP i gayer: None Pro Address: Kauhale Street CitP61hoa qmCase State: Rr a o.: No.: ziD: 96778 of Applicable - ,• a -. �L—'f• f a I I r.-'— i 11 - _- kA _ - I INDICATOR #5 •�F. 130 � - - — A-- �''-. �"' "� __= __ _- _ , INDICATOR K - -- INDICATOR 94 t ti J i 130 � f INDICATOR #f3 <" INDICATOR ##1 Q SUBJECT it , ,Z •` � 1390 X2082 AIw>®.. 4'�tA{v QdA; 03A01 GD2.•Iac, L191/ld61 t ; ! 1'v:_:-- _ •. 1 Bank of Hawaii Building, 120 Pauahi Street, Suite 205, Hilo, Hawaii 96720 (808) 961-3704, FAX (808) 961-4600 LOCATION MAP fer: None ty Address: Kauhale a oa • of Applicable Bank of Hawaii Building, 120 Pauahi Street, Suite 205, Hilo, Hawaii 96720 (808) 961-3704, FAX (808) 961-4600 Residential Comparable Photographs COMPARABLE PROPERTY PHOTO ADDENDUM 3orrower: None 60 No.: 9184 Pro Address: Kauhale Street No.: City: Pahoa State: HI Zip: 96778 _ender: Not Applicable w Ion COMPARABLE SALE #1 TMK {3} 1-5-11:38 Listing Price $28,000. Homestead Road. Lot size 9,876 Sq, Ft_ Sale Date: Not Applicable Sale Price: $ NIA COMPARABLE SALE #2 TMK {3} 1-5-13:11 Listing Price $29,900 Off Main Street Lot size 20,712 Sq. Ft. Sale Date: Not Applicable Sale Price: $ N/A 3orrower: Nc City: Pahoa '_ender: Not) [_nMPARARLE PROPERTY PHOTO ADDENDUM COMPARABLE SALE #3 TMK {3} 1-5-13:12 Listing Price $39,900 Off Main Street Lot Size 25,407 Sq. Ft_ Sale Date: Sale Price: $ COMPARABLE PROPERTY PHOTO ADDENDUM c+n+o• ui _ . -- '�- -. , � 'i•. .. -[�, - - ter. -"� 9•. `. ��r. �t � 3 . 41 v..s a s Zip: 96778 COMPARABLE SALE #4 TMK {3} 1-5-11:42 Located of the Main Road Lot size 10,454 Sq. Ft. Sale Date- July 18, 2002 Sale Price: $ 12,000 COMPARABLE SALE #5 TMK {3} 1-5-11:41 Located of the Main Main Road Lot Size 9,030 Sq. Ft. Sale Date- February 14, 2003 Sale Price: $ 26,000 Commerical Comparable Photographs ' Property AddrE City: Pahoa COMPARABLE PROPERTY PHOTO ADDENDUM f tr a SIN lb t� i ly. - .rte •, 1 •`y {.,,,eft' i• '. �.- COMPARABLE SALE #1 {3}1-5-7:20 Sales Price $230,000 Date of Sale: 11/1/2001. Location Pahoa COMPARABLE SALE #2 {3}1-9-5:2 Sale Price $230,000. Date of Sale May 1, 2001. Volcano COMPARABLE PROPERTY PHOTO ADDENDUM Borrower: N/A No.: 9184 Property Address a No.: City: Pahoa State: HI Zip: 96778 Lender: None COMPARABLE SALE #3 3}1-5-12:18 Sale Price $60,000. Sale Date 1/15/2003. Main Street Pahoa COMPARABLE PROPERTY PHOTO ADDENDUM . , F— .,,... City: Pahoa Lender: Nor �4 ' � �' • - � d ..- _. � ice- ., .. �� � w �-.- K COMPARABLE SALE #4 TMK: {3} 1-7:19:30 Sales Price $155,000 Sales Date 3/4/2003. Location Kurtistown COMPARABLE SALE #5 TMK{3} 1-5-12:15 Sale Price: $50,000 Sale Date: 10/25/2002 Pahoa Village COMPARABLE PROPERTY PHOTO ADDEND Borrower: N/A No.: 9184 Property Address 1110fte No.: City: Pahoa State: HI Zip: 96778 1 ender: None COMPARABLE SALE #6 3} 1-5-14:7 Sale Price: $250,000. Sale Date: June 8, 2003. Pahoa Village ` _ � � �; .w F •-� - ^ate' •-#. `�! t► i � �' y y� s^ ':.yam �'�► _ `�.: ' �-.4 - •fir ��o �.Yt gI� t�� _ _ _ - 'y _ 01/96/2880 levee 9618933 O3N-DPH-416 PAGE 81 RECORDATION REQUESTED BY.- County Y:County Council County of Hawaii . APTEH RECORDATION, RETURN TO: Office of the County Clerk 25 Aupuni street Hilo, Hawaii 96720 RETURN BY: NAIL ( x ) PICKUP ( ) ON OMMAi OF Do oOCUMw.? &WORDED AS FOUOWL PAR OF MWM omcl of BUREAU OF CONVEYANCES hulvwl IN Ari ed —. A.A.. 1, A _f:/Y o'Jxt.S M. I., •ew"d In lb. ie a LL _.... Foo., c79 THIS INDENTURE, made this ["A day of , 1976, by and between ANPAC, INC., a Hawaii corporation, whose principal place of business is 700 Bishop Street, and whose post office address is P. 0. Box'3230, Honolulu, Hawaii 96801, herein- after called the *Grantor*, and the COUNTY OF HAWAII, a municipal corporation of the State of Hawaii, the principal place of business and post office address of which is 25 Aupuni Street, Hilo, Hawaii, 96720, hereinafter called the •Grantee•, W I T N E S B R T H s That the Grantor, in consideration of the sum of ONE DOLLAR (51.00), toit paid by the Grantee, the receipt of which is hereby acknowledged, and of the covenants of the Grantor and Grantee as hereinafter contained, does hereby grant, bargain, sell and convey unto the Grantee, its successors or permitted assigns forever, an easement to construct; reconstruct, install, maintain, operate, repair and remove a drainage structure or structures, includingnecessaryappurtgnant equipment, as part of a drainage system, through, under and across the hereinafter described parcel of land, hereinafter referred to as the "easement area'; i:LSL'n t--- 10k I sl-afi-B4 69s41 TO+ROBERT BLOON APPRAISER PRON+9fi1e980 pal 01/06/2004 10:08 9618933 Cp{-Dpw-04G PAGE 02 TOGETHER with the right of ingress to and egress from said easement area over the land of the Grantor, adjacent thereto, for all purposes in connection with this grant of easement, and together also with the right to construct, reconstruct, install, maintain, operate, repair and remove from the said easement area, such drainage structure or structures, manholes and other equipment Be the Grantee shall deem necessary or expedient for the proper maintenance, operation or repair of said drainage system. The parties hereto do further mutually covenant and agree as follows: That the Grantor shall not at any time during the term of this indenture erect or place any building foundation of any kind below the surface of the easement area or at any time erect or place any building or structure of any kind, other than walls, fences, roads, walks, curbs or appurtenances thereof, above or on the surface of the easement area, unless said building, structure or building foundation shall be first approved by the County of Hawaii by its Department of Public Works and unless the same shall not interfere with the Grantee's use of the easement area for construction, reconstruction, maintenance, operation, repair and removal of, or access to said drainage system and easement area; PROVIDED, HOWEVER, that this provision shall not prohibit the Grantor from planting or maintaining grass, shrubs and similar plants within said easement area, or from laying, maintaining, operating, repairing or removing his own water or sewer pipelines, conduits or drains below the surface of said easement area insofar as such uses do not interfere with the exercise by the Grantee of the rights herein granted= -2- 81-05-94 69:41 TO:ROBERT BLOOM APPRAISER rROM:951a933 Pet 01/06/2004 10:00 9619933 COW-DPW{NG PAGE 03 That in the event it is necessary or convenient for the Grantee to destroy, remove or alter any building, structure or building foundation within the easement area, in order to construct, reconstruct, maintain, operate, repair or remove its drainage system or any appurtenant equipment therein, the Grantee shall not be liable for the replacement or restoration of the same; it being the intention of the parties hereto that any loss sustained by reason thereof shall fall upon the Grantor; That after the completion of any construction, reconstruc- tion, maintenance, operation, repair or removal work by the Grantee, the Grantee shall restore the surface of the ground within the easement area to its original condition to the extent that such restoration is reasonably possible; That, except as otherwise herein provided, the Grantee shall indemnify and save harmless the Grantor against loss or damage to the property of the Grantor or to the property of others Situated outside of the easement area, and from liability for injury to or death of persons in the manner provided by law when suchloss, damgage, injury or death arises or proximately results from the negligence of the Grantee, its officers, agents or servants; That the Grantee shall not assign any right herein granted or otherwise given, except to a successor or permitted assign, without the written consent of the Grantor; That any drainage structure or structures, manholes or other appurtenant equipment constructed, reconstructed or installed within the easement area and maintained, operated or repaired by the Grantee shall be and remain the property of the Granteer That in the event the Grantee shall at any time completely remove its drainage structure or structures from any parcel or -3- 91-66-94 99:41 TO:ROBGRT BLOOM APPRAISER ■ROM:9619933 peg 01/06/2004 10:00 9618933 COH-DPW-ENG PAGE B3 parcels of land comprising the easement area and shall for a period of two (2) or more consecutive years, fail to reinstall any drainage structure, through, under or across said parcel or parcels of land, or shall for a like period cease to maintain and operate a drainage system through, under or across any parcel or parcels of land com- prising the easement area, then the rights herein granted and the obligations herein imposed shall thereupon terminate, as to such parcel or parcels of land, without any action on the part of the Grantor or Grantee, save and except that nothing herein contained shall be deemed to be an abandonment of said rights and obligations insofar as they affect other parcels of land within said easement area which have not been abandoned; PROVIDED, HOWEVER, that nothing herein contained shall require the Grantee to remove therefrom, upon such abandonment, any structure or equipment constructed or placed within the easement area or to do any work therein; That when more than one person is involved in the grant of this indenture and the covenants herein contained,.the terms "Grantor" and "Grantee" and related verbs and pronouns in the singular shall include the plural. Where appropriate, the masculine gender shall be deemed to include the feminine or neuter genders; That the term "Grantor" wherever used herein shall be held to mean and include.the Grantor, its successors or assigns, and that the term "Grantee' wherever used herein shall be held to mean the County of Hawaii and its successors or permitted as■igns, and that this instrument shall be binding upon and shall inure to the benefit of the parties hersto and their said respective successors or permitted assigns.. That the parcel of land herein referred to as the •easement area" is more particularly described as follows: -4- 01-S6-S4 69:42 TOi ROBERT BLOOM APPRAISER PROM:9618933 - ^- P94 01/06/2004 18:00 9618933 COH-DPW-" PAGE 05 EASEMENT "D-1" (10.00 FEET WIDE) FOR DRAINAGE PURPOSES ALL of that certain parcel of land, being a portion of Royal Patent 8095, Land Commission Award 11216, Apana 40, Part 2 to Kekauonohi, situated on the Easterly aide of 50.00 wide road- way lot at waiakahiula, Puna, Island, County and State of Hawaii, more particularly described as follows: Beginning at the west corner of this easement on the Easterly side of 50.00 feet wide roadway lot, the coordinates of which referred to Govern- ment Survey Triangulation Station "PAHOA" being 3235.24 feet South and 3732.99 feet East and running by azimuths measured clockwise from true South: 1. 2390 171 20" 68.50 feet along remainder of L.C. Award 11216, Apana 40, Part 2 to Kekauonohi; ' 2. 283• 00' 254.00 feet along remainder of L.C. Award 11216, Apana 40, Part 2 to Kekauonohi; 3. 13" 00' 10.00 feet along remainder of L.C. Award 11216, Apana 40, Part 2 to Kakauonohi; 4. lOi° 00' 249.99 feet along remainder of L.C. Award 11216, Apana 40, Part 2 to Kekauonohi; 5. 59" 17' 20" 64.12 feet along remainder of L.C. Award 11216, Apana 40, Part 2 to Kekauonohi; 6. 147° 101 10.01 feet along the Easterly side of 50.00 - wide roadway lot to the point of beginning and containing an area of 3,183 square feet. SUBJECT, HOWEVER, to a reservation in favor of the State of Hawaii of all mineral and metallic mines. IN WITNESS WHEREOF, the parties hereto have caused these presents to be executed on the day and year first above written. AMFAC, BY I BT. �� 0-�--1i' '�� 73a11S'AM EC ARY -5- 01 -B6 -B4 99:42 TO:ROBEAT BLOOM APPRAISER FpOM:9616933 Pe5 81/86/2884 18:86 9618933 CUf-DPM-ENG RECORDATION REQUESTED BY: County Council County of Hawaii . AFTER RECORDATION, RETURN TO: Office of the County Clerk 25 Aupuni street Hilo, Hawaii 96720 RETURN BY MAIL ( x ) PICKUP I 1 PAGE el se COGINAt OF TMC OOCUMW. 680010EO AS FOLLOWS: PAIR OF MAWAIJ o1Na O, BUREAU OF CONVEYANCE: 9wi144 fa, Mawd ma dny of e m - F� � r_- o'deck M. v « Asd In UL- ,a • LL THIS INDENTURE, made this nA day of , 1974, by and between ANFAC, INC., a Hawaii corporation, whose principal place of business is 700 Bishop Street, and whose poet office address is Pe O. Box'3230, Honolulu, Hawaii 96801, herein- after called the *Grantor*, and the COUNTY OF HAWAII, a municipal corporation of the State of Hawaii, the principal place of business and post office address of which is 25 Aupuni Street, Hilo, Hawaii, 96720, hereinafter called the •Grantee', ' W I T N E S S B T N t That the Grantor, in consideration of the sum of ONE DOLLAR ($1.00), to it paid by the Grantee, the receipt of which is hereby acknowledged, and of the covenants of the Grantor and Grantee as hereinafter contained, does hereby grant, bargain, sell and convey unto the Grantee, its successors or permitted assigns forever, an easement to construct, reconstruct, install, maintain, operate, repair and remove a drainage structure or structures, including necessary appurtgnant equipment, as part of a drainage system, through, under and across the hereinafter described parcel of land, hereinafter referred to as the •easement area"; �L'QlU:'44M' 8-1-W6-64 89:41 TOi ROBCRT BLOOM APPRAIBBR PROM:9618933 Pal