HomeMy WebLinkAboutCOM 0257.014 2008-2010
APPRAISAL REPORT FLAWED
OLSON TRUST KAWA'A PROPERTIES
TMK (3) 9-5-016:006 & 025 187.683 Acres
TMK (3) 9-5-017:005 363.188 Acres
550.871 Acres
1. ESTIMATED MARKET VALUE BY APPRAISAL
Parcels 6 & 25 $ 2,320,000 or $ 12,361 /Acre
Parcel 5 $ 1,440,000 or $ 3,964/Acre
Ridiculous Difference $ 8,396/Acre
Why 3 times the difference per acre for parcels separated by one unrelated parcel?
2 Parcels 6 R 25 t I'd t o ~a' 'a t F Parcels
Parcel 5 can be consolidated and resubdivided to 2 Parcels
Potential Parcels (from Page IV-6 of appraisal) 8 Parcels
3. CONSOLIDATION AND RESUBDIVISION can be done with county
administration approvals for less than $30,000 of engineering cost to draw new
layouts plus staking.
4. LEGALLY PERMISSABLE (from Page III-2 of appraisal)
• Certain Agricultural
• Botanical Gardens and Private Parks
71~- One Single Family Dwelling per legal lot of record (this would show
highest and best use)
5. Biggest Flaw is the appraisal did not use any residential comparability parcel
which would greatly increase the per acre value to many times more than what is
shown in appraisal.
6. MARKET VALUE
"Market value means the amount in cash, or on terms reasonably equivalent to
cash, for which all probability the property would have sold on the effective date
of the appraisal, after a reasonable exposure time on the open competitive market,
from a willing and reasonably knowledgeable seller to a willing and reasonably
knowledgeable buyer." (from Page I-2 of appraisal)
As a real estate investor, developer, and sales broker for 37 years I have always
considered oceanfront property as the choice property to own and have set price
standards in several projects. The highest and best use that an oceanfront property
will yield if sold will be for a single family residence.
Comm. No. 02 S 7. 1
Ref. To:
Ref. Dote Jt~pY11&9---
7. INTENDED USE AND USERS (Page 1-2 of appraisal)
"The purpose of our assistance is to provide value estimates that can be used by
the County of Hawaii, the State of Hawaii Department of Land and Natural
Resources (DLNR), Department of the Interior, and U.S. Fish and Wildlife
Service in evaluating the possible acquisition of the properties." (Page I-2 of
appraisal) (not highest and best use)
8. Look at some logic:
Parcel 6 & 25 appraised at $ 2,320,000 or $ 12,361 / Acre.
If both parcels were of equal size the appraiser is
saying each parcel of 93 acres would be worth $ 1,160,000
The appraiser is saying Parcel 5 which is 363 Acres is worth $ 1,440,000
Compare the value of parcels separated by one unrelated parcel:
93 Acres for $ 1,160,000 or $12,473 / Acre
or
363 Acres for $ 1,440,000 or $ 3,967 /Acre
Lands already have 8 Parcels but must be consolidated and resubdivided to create
legally recordable parcels. The appraised value of $3,700,000 divided by 8
parcels = $ 462,500 for an oceanfront home site is way too cheap!!!
Parcel 6 and 25 consist of 187.683 Acres divided by 6 parcels = 31 Acres / Parcel.
Parcel 5 consists of 363.188 Acres divided by 2 parcels = 181 Acres / Parcel.
Based on the Appraiser's Estimate value from Parcels 6 and 25 each 31 Acre
parcels would be worth:
$ 12,361 x 31 Acres = $ 383,000 per parcel
Value from Parcel 5 each 181 acres which is 5.8 times larger than 31 acres would
be worth:
$ 3,967 x 181 Acres = $ 718,000 per parcel
9. In my opinion:
1) 31 Acre Parcels from Parcels 6 & 25 would have a market value for a
residential site ranging between $ 775,000 ($25,000 / Acre) to
$2,325,000 ($75,000 / Acre) per parcel or $ 4,650,000 for all 6 parcels
on the low side.
2) 181 Acre parcels from Parcel 5 would have a market value of
$1,500,000 ($8,287 / Acre) to $ 4,500,000 ($25,000 / Acre) per parcel
or $ 3,000,000 for 2 parcels on the low side.
3) Total potential sales could be:
Low High
Parcels 6 & 25 (6 parcels) $ 4,650,000 $13,950,000
Parcel 5 (2 parcels) $ 3,000,000 $ 4,500,000
Total Value $ 7,650,000 $18,450,000
or $ 13,000 / Acre or $33,500 / Acre
All this can be attained with another $30,000 investment toward these
lands from the owner, Mr. Ed Olson. If Mr. Olson discounted the land by
30% it would still be worth $5,355,000.
If these lands are sold on the open market all dreams of keeping this
stretch of land undeveloped and available to the public will be gone.
10. MY EVALUATION OF ORIGINAL PUCHASE
Keep in mind that Mr. Olson purchased these lands of 1,531 acres for
$11,000,000 or $7,413 / Acre.
Out of the 1,531 acres, 550 are oceanfront lands in question.
In my opinion total land of 1,531 Acres - 550 Acres Oceanfront Parcels = 981
Acres of mauka land.
If we were to value the mauka lands at the time of acquisition at about $2,000 to
$2,500 / Acre.
981 Acres x $2,000 / Acre = $1,962,000
$11,000,000 Total lands
- $ 1,962,000 Mauka lands
$ 9,038,000 Oceanfront lands
$ 9,038,000 divided by 550 Acres = $ 16,432 / Acre