09-28-15 Agenda, Packet & Committee Meeting Notice

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INCOME APPROACH The Income Approach is a means of estimating the value of a building based upon the income that it is either producing or capable of producing. In the case of the subject building, we are dealing with a highly unique property. In the "Highest and Best Use" section of this report, I concluded that the present use of the property was the present use based upon the existing improvements. This building is not readily adaptive to any alternate use such as conversion into an office building, warehouse distribution center or even a new machine shop or similar use. The very existence of the bowling alley and the bar would indicate that a continued use of these items would be most likely.. In the "neighborhood" discussion, I indicated that the ethnic composition of the surrounding neighborhood has changed from a Polish neighborhood to an Hispanic neighborhood. This is clearly indicated by the St. Adelbert Catholic Church located approximately three blocks south of the subject property. This was once a Polish Catholic Church,but now is an Hispanic Catholic Church. As a consequence, if the PNA were to vacate the subject premises and offer the property for rent,the most likely potential renter would be an Hispanic group similar to the PNA who could utilize the facility much as it is being used today. • It should be pointed out that the subject building is overly large due to the manner in which the present improvements came into existence,meaning a remodeled horse barn,plus a newer addition. Obviously if a fraternal group were to construct a facility from scratch, it would hardly resemble the existing improvements. The Elk's Lodge on McKinley Highway is an example of what a newer fraternal organization club house would resemble. As a result of the excess size of the building, this would typically be reflected in the square foot per year rental. It should also be noted that rentals of buildings such as this would be in its entirety and not on a piecemeal basis,meaning just the bowling alley rented out or just the bar room rented out. Obviously, the entire building would be leased to a single tenant,and the size of the structure would be reflected in the square foot rental. An obvious way to lease this building would be on a Triple Net Basis, meaning the tenant would be responsible for the taxes (none applicable for a fraternal group), insurance, and maintenance. As far as maintenance, this would mean an upkeep of the building as opposed to replacing roof,furnaces,etc. ii 26