JESS PPAYNEAYNEAYNE AA PPRAISALPPRAISAL SSS · Remaining Economic Life: 25 years/if maintained and...

JJJESSESSESS PPPAYNEAYNEAYNE AAAPPRAISALPPRAISALPPRAISAL SSSERVICEERVICEERVICE

PREPARED FOR:PREPARED FOR:PREPARED FOR:

Zions First National BankZions First National Bank

A division of ZBA division of ZB

N.A.N.A.——Appraisal DepartmentAppraisal Department

Attn: Frank ClawsonAttn: Frank Clawson

One South Main StreetOne South Main Street

Salt Lake City, UT 84133Salt Lake City, UT 84133

JJJESSESSESS PPPAYNEAYNEAYNE AAAPPRAISALPPRAISALPPRAISAL SSSERVICEERVICEERVICE

Jess Payne, SRA, CGAJess Payne, SRA, CGAJess Payne, SRA, CGA

53 N. Plummer Road53 N. Plummer Road

Star, ID 83669Star, ID 83669

Phone: 208.454.2991Phone: 208.454.2991

Fax: 208.459.1273Fax: 208.459.1273

Email: [email protected]: [email protected]

APPRAISAL REPORT ON:APPRAISAL REPORT ON:APPRAISAL REPORT ON:

20 E. CENTRAL BLVD.

CAMBRIDGE, WASHINGTON COUNTY, IDAHO

Date of Value:Date of Value:Date of Value:

JULY 20, 2018

August 7, 2018

Frank Clawson, MAI

Zions First National Bank, a division of ZB

N.A. – Appraisal Department

One South Main Street

Salt Lake City, UT 84133

Type: Vacant Restaurant Bldg & Residence

Address: 20-40 E. Central Blvd.

Cambridge, ID 83610

Owner: Morris Giedd

Appraisers File: 180720051

Rims No.: ZFC-18-000816-01-01

Dear Mr. Clawson,

To comply with our engagement letter dated July 18, 2018, I have performed an

exterior (per agreement with client due to owners lack of cooperation) inspection

of the above captioned property for the purposes of determining the fee simple

market value, as described herein. Since I was unable to physically inspect the

buildings I have relied upon the information obtained thru my exterior

inspection, assessor’s data, realtor’s reporting, and prior appraisals. Any

extraordinary assumptions or hypothetical conditions invoked will be fully

described. The subject of this report includes an existing 3,718± sf CMU block

sit down restaurant with an attached 1,640± sf residential living quarters. The

realtor involved with the property has not accessed the building for some time

but believes a tenant is still occupying the rental unit though the restaurant has

been vacated. The total size of the structures in aggregate is 5,358± sf based on

County records. The site size in assemblage (3 tax lots) is 13,975 sf. The land to

building ratio is 2.60:1, which does not allow for onsite parking (other than

residential unit) nor does it provide excess/surplus land.

The purpose of this appraisal is to estimate the market value of the Fee Simple

interest of the improved property, subject to the definition of market value, the

general assumptions, limiting conditions, and the certification as set forth in the

attached appraisal report. The intended use of the appraisal is to provide an “As

Is” value to our client, Mr. Franklin Clawson of Zions Bank for loan

underwriting purposes.

JJeessss PPaayynnee

AApppprraaiissaall SSeerrvviiccee

53 N Plummer Road Star, Idaho 83669

Phone: 208.454.2991 Fax: 208.459.1273

Email: [email protected]

Commercial

♦

Farms/Ranches

♦

Estate

♦

Litigation

♦

Residential Dept.

Jess Payne, SRA, CGA

Certified General Appraiser

James T. More, CGA


Shirl Bobst, LRA

Licensed Residential Appraiser

Based upon the attributes of the subject as a largely owner occupied property, within a small

rural community and conversations with market participants, the Sales Comparison Approach

was the only methodology employed in the analysis section.

A reader of this report should understand that it is my intention and opinion that the following

document represents an Appraisal Report. This Appraisal is intended to comply with the

requirements set forth, under the Financial Institutions Reform, Recovery and Enforcement Act

(FIRREA); the Interagency Appraisal and Evaluation Guidelines; the ZB, N.A. Appraisal

Standards and Guidelines (including scope of work) and the Uniform Standards of Professional

Practices (USPSP), and it states the Scope of Work and reporting options used under Standard 2-

2 (USPSP). The determination of Market Value conforms to the definition set forth by the Board

of Governors of the Federal Reserve System, in accordance with Title X1 of FIRREA. This

report discloses all assumptions, extraordinary and hypothetical conditions, and limiting

conditions invoked in this assignment. It also includes applicable descriptions of the subject

property including, location, the market for the property type, and Appraiser’s opinion of Highest

and Best Use.

The reader should note that an Environmental Assessment has not been provided regarding the

Subject land or improvements. The existence of hazardous materials, which may or may not be

present on the subject parcel, was not observed by the Appraiser. I am not an expert in detecting

such substances and the presence of potentially hazardous may affect the value of the property.

The value estimate is predicated on the assumption that there is no such material on the property.

Any such environmental risk discovered at a later date may require a revised estimate of value

which may or may not be simply a reduction of the value by the estimated cost to cure the

environmental condition. Properties known to have environmental risk may carry a stigma in the

marketplace which also may or may not affect the value.

It is apparent from being a former restaurant that the property would have significant FF&E,

unless it has been removed. This appraisal is solely based on the real estate (land and

improvements) with any FF&E on site excluded. The property taxes are in arrears but I assume

they will be brought current prior to a sale.

The property is listed for sale by Michael Bergman, Lee & Associates in Boise, ID. According to

Mr. Bergman the property has been exposed to the market for nearly 3 years with an initial

listing price of $150,000 that has since been reduced to $139,000. There has been minimal

activity even with the reduction in price. Market investigations indicate that if offered on the

open market at market price, the Subject, “As Is” would likely have an exposure and marketing

period of approximately 12 to 18± months given current market conditions which would be

within the time frames anticipated within similar small rural Idaho communities. The actual 3

year marketing history would indicate that it was originally overpriced.

Based upon the physical inspection of the Subject Property, the analyses undertaken, the market

and ancillary investigations performed, and subject to the Assumptions and Limiting Conditions

set forth in the report, the Addenda and this Letter of Transmittal, it is my opinion that the

market value of the Fee Simple Estate of the improved subject property (excluding all FF&E) as

of July 20, 2018, was:

***ONE HUNDRED TWENTY NINE THOUSAND DOLLARS***

***$129,000***

The report is intended for the use of Zions First National Bank and its

designees. No Copying of distribution of any part of this report is

authorized without the Bank’s written consent. Bank makes no

representation as to the accuracy of any information or conclusion in the

report.

We trust you will find this Appraisal report relevant to your decisions regarding the subject

property. Should you have any questions regarding this report, or if we may be of further service

to you, please contact us at your convenience.

Respectfully Submitted,

Jess Payne, SRA

JJJEEESSSSSS PPPAAAYYYNNNEEE AAAPPPPPPRRRAAAIIISSSAAALLL SSSEEERRRVVVIIICCCEEE 4

Address: 20-40 E. Central Blvd., Cambridge, Idaho

TABLE OF CONTENTS

TABLE OF CONTENTS ................................................................................................................ 4

SUMMARY OF SALIENT FACTS AND CONCLUSIONS ........................................................ 5

CERTIFICATION .......................................................................................................................... 7

ASSUMPTIONS AND LIMITING CONDITIONS ...................................................................... 8

LOCATION MAP ........................................................................................................................ 11

SUBJECT PHOTOS ..................................................................................................................... 12

INTRODUCTION ........................................................................................................................ 17

WASHINGTON COUNTY OVERVIEW ................................................................................... 21

NEIGHBORHOOD DATA .......................................................................................................... 26

SITE DESCRIPTION ................................................................................................................... 27

ZONING ....................................................................................................................................... 29

TAXES .......................................................................................................................................... 30

BUILDING DESCRIPTION ........................................................................................................ 32

HIGHEST AND BEST USE ........................................................................................................ 35

VALUATION THEORY .............................................................................................................. 39

SALES COMPARISON APPROACH ......................................................................................... 40

COMPARABLE MAP.................................................................................................................. 43

COMPARABLE HOUSE SALES MAP ...................................................................................... 49

ADDENDA ................................................................................................................................... 54



SUMMARY OF SALIENT FACTS AND CONCLUSIONS

Location: 20-40 E. Central Blvd, Cambridge, ID

Date of Valuation: July 20, 2018

Date of Inspection: July 20, 2018

Date of Report: July 25, 2018

Purpose of Appraisal: Estimate the requested value for loan monitoring

Owner of Record: Morris Giedd

Interest Appraised: Fee Simple

Premise of Value: Market Value “As Is”

Land Area: A subject summary is presented below.

Zoning: C 1– Commercial.

Property Description: The subject of this report includes an existing

3,718± sf CMU block sit down restaurant with an

attached 1,640± sf residential living quarters. The

realtor involved with the property has not accessed

the building for some time but believes a tenant is

still occupying the rental unit but the restaurant has

been vacated. The total size of the structures in

aggregate is 5,358± sf based on County records.

The site size in assemblage (3 tax lots) is 13,975 sf.

The land to building ratio is 2.60:1, which does not

allow for onsite restaurant parking nor does it

provide excess/surplus land.

Parcel Summary Size Allocation

Parcel Number Size (ac) Size (sf) Legal Description

RPC7440010009A 0.098 4,269 NW 86 1/2 Ft of Lots 9&10 Block 10, Hoppers Div, Kays Café

RPC7440010009A 0.062 2,701 SE 53 1/2 Ft of Lots 9&10 Block 10, Hoppers Div, Living Quarters

RPC7440010011A 0.16 6,970 Lots 11&12 Block 10, Hoppers Div, Garage To C7440010009A

Total (Usable) 0.32 13,939

Space Breakdown Imp. Size (sf)

restaurant 3,718

apartment 1,640

5,358

Garage 576

Size Allocation



Reported Construction: CMU block with metal and vinyl siding. Pitched

roof with metal sheathing. Residential unit is wood

framed with painted metal exterior and metal roof.

The restaurant interior reportedly textured sheetrock

walls with vinyl and wood paneling with decorative

wood trim, vinyl & carpeted flooring over slab

concrete, incandescent and fluorescent lighting,

propane wall furnace, two restrooms, 110 & 220

volts. The residential unit reportedly has 2 bdrms,

1.5 baths with vinyl and carpeted flooring, wood

panel walls & EBB heat. Detached 2 car garage.

Overall quality and condition is assumed fair.

Parking: One carport services the residential unit, plus a two

car garage. Restaurant only offers street parking.

Year Built: Restaurant = 1907 & Residential Unit = 1971 (per

County Assessor)

Occupancy: Restaurant appears to have gone dark. The

residential unit is reportedly still rented.

Highest and Best Use:

As Vacant: Commercial Use when market demand dictates.

As Improved: As Existing: Sit down restaurant with a residential

component. Appropriate maintenance required.

Effective Age: 50 years

Remaining Economic Life: 25 years/if maintained and updated

Marketing Time: 12-18± months

Exposure Time: 12-18± months

Disclaimer Language: The report is intended for the use of Zions First

National Bank and its designees. No copying or

distribution of any part of this report is authorized

without the Bank’s written consent. Bank makes no

representation as to the accuracy of any information

or conclusion in the repot.



CERTIFICATION

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

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

The reported analyses, opinions, and conclusions are limited only by the reported

assumptions and limiting conditions and is my personal, impartial, and unbiased professional

analysis, opinion, and conclusion.

I have no present or prospective interest in the property that is the subject of this report and

no personal interest with respect to the parties involved.

I have not performed services, as an appraiser, regarding the property that is the subject of

this report within the three-year period immediately preceding acceptance of this assignment.

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

involved with this assignment.

My engagement in this assignment was not contingent upon developing or reporting

predetermined results, nor based on requested minimum valuation, a specific valuation, or

the approval of a loan.

My compensation for completing this assignment is not contingent upon the development or

reporting of a predetermined value or direction in value that favors the cause of the client, the

amount of the value opinion, the attainment of a stipulated result, or the occurrence of a

subsequent event directly related to the intended use of this appraisal.

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

conformity with the Uniform Standards of Professional Appraisal Practice.

Jess Payne SRA has made a personal exterior only inspection of the property that is the

subject of this report.

No one provided significant real property appraisal assistance to the persons signing this

certification.

The reported analyses, opinions, and conclusions were developed, and this report has been

prepared, in conformity with the Code of Professional Ethics and Standards of Professional

Appraisal Practice of the Appraisal Institute.

The use of this report is subject to the requirements of the Appraisal Institute relating to

review by its duly authorized representatives.

As of the date of this report, Jess Payne SRA has completed the continuing education

program of the Appraisal Institute.

As of the date of this report, Jess Payne SRA has completed the Standards and Ethics

Education Requirement of the Appraisal Institute for associates and members.

____________________________ July 20, 2018

Jess Payne, SRA Date




ASSUMPTIONS AND LIMITING CONDITIONS

This Appraisal Report, the Letter of Transmittal, and the Certification of Value are made

expressly subject to the following assumptions and limiting conditions and any special limiting

conditions contained in the Report which are incorporated herein by reference.

1. The legal description furnished is assumed to be correct. We assume no responsibility for

matters legal in character, nor do we render any opinion as to the Title, which is assumed

to be good.

2. The sketch in this report is included to assist the reader in visualizing the property. We

have made no survey of the property and assume no responsibility in connection with

such matters.

3. Certain information contained in this report was furnished by others. We believe it to be

accurate and have confirmed it to the best of our ability, but we assume no responsibility

for its accuracy.

4. 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 without the previous written

consent of the appraiser or the client and then only with proper qualification.

5. We are not required to give testimony or to appear in court by reason of this appraisal,

with reference to the property in question, unless arrangements have been previously

made therefore.

6. The distribution of the total valuation in this report between land and improvements

applies only under the existing program or utilization. The separate valuations for land

and improvements must not be used in conjunction with any other appraisal and are

invalid if so used.

7. The land, and particularly the soil, of the area under appraisal appears firm and solid.

Subsidence in the area is unknown and uncommon, but this appraiser does not warrant

against this condition or occurrence.

8. Subsurface rights (minerals and oil) were not classified in making this appraisal.

9. The comparable sales date relied upon in this appraisal are believed to be from reliable

sources. It is not always possible to completely inspect the comparable properties, and it

is necessary to rely on information furnished by others as to the correctness of said data.

This data is verified to the best of our ability and believed to be correct.



10. The appraisers have inspected the land and improvements by observation only. It is not

possible to personally observe conditions within the walls of the building or beneath the

soil. Therefore, no representations are made as to these matters, unless specifically stated

in this report. The value estimate is subject to any such conditions that could cause loss

in value.

11. It is assumed by the appraisers, and the value contained in this report is contingent upon

the fact, that the improvements meet all building codes and requirements necessary for

the property to be issued an occupancy permit.

12. Neither all nor any part of the contents of this report shall be conveyed to the public

through advertising, public relations, news, sales, or other media without the written

consent and approval of the author, particularly as to valuation conclusions, the identity

of the appraiser, professional designations, reference to any professional appraisal

organizations, or the firm with which the appraiser is connected.

13. No soils report has been furnished the appraisers and this report is therefore subject to no

adverse soils condition existing on the site.

14. The existence of potentially hazardous material such as ureaformaldehyde foam

insulation, asbestos, radon gas, or other potentially hazardous toxic waste was not

observed by us in the inspection of the property nor do we have any knowledge of the

existence of such materials in the property; however, we are not qualified to detect such

substances. The existence of such substances may have a detrimental effect on the value

of the Subject Property. We urge the client to retain an expert in this field to determine

whether such hazardous substances exist within the Subject Property. The value reported

in this appraisal is based upon the assumption that these substances do not exist in or on

the Subject Property.

15. The Americans with Disabilities Act ("ADA") became effective January 26, 1990. We

have not made a specific compliance survey and 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

requirements 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. We did not consider possible non-compliance with the

requirements of ADA in estimating the value of the property.

Extraordinary Assumptions (No Hypothetical Conditions)

The value conclusions are subject to the following extraordinary assumptions (no hypothetical

conditions) that may affect the assignment results. For purposes of the “As Is” valuation, we

assume:



1. No easements are known to exist with regard to the subject site, which would adversely

affect the parcel. It is a specific assumption of this appraisal that there are no easements,

deeds, or restrictions that currently exist on the subject that would adversely impact the

site.

2. All statements of fact used in the report serving as the basis of the appraiser’s analyses,

opinions, and conclusions, are considered to be true and correct to the best of the

appraiser’s knowledge and belief. We shall have no responsibility for legal matters;

questions of survey; legal description; opinion of title; soil or subsoil conditions;

engineering; technical matters, etc. The aforementioned and other relevant issues will be

developed fully in the body of the report to follow.

3. A Phase 1 Environmental Study has not been provided regarding the site. Upon physical

inspection, no evidence of environmental hazards was apparent. The value estimate is

predicated on the assumption that there is no such material on the property. Any such

environmental risk discovered at a later data may require a revised estimate of value


environmental condition. Properties known to have environmental risk may carry a

stigma in the market place which also may or may not affect the value.

4. An exterior inspection of the subject property occurred on July 20, 2018. Additional

property information was obtained via data accessed through the Washington County

Assessor’s Office, the active listing and realtor, and prior appraisal data. I relied upon the

above data and should these representations be amended, or prove to be inaccurate, the

value estimate is subject to revision.

5. The valuation herein is for the real property only. It specifically excludes any FF&E or

business value.

6. A member of Cambridge’s City Hall, and who wishes to remain anonymous, stated that

the building could suffer from some structural issues per “the word on the street.” No

such inspections are known to have been performed and I am making the extraordinary

assumption that no significant structural problems exist (in other words, any issues that

may exist could be reasonably cured). This is not a hypothetical condition as it is not a

known fact.



LOCATION MAP



SUBJECT PHOTOS

Photos Taken: July 20, 2018 by Jess Payne

Building View form Central Blvd. & Superior Street

Easterly View of Central Blvd.



Front of Residential Unit

Rear of Residential Unit



South Side of Residential Unit

South Side of Building



Southerly View of Superior Street

West Side of Building Fronting Superior Street



View of Subject traveling North on Superior Street



INTRODUCTION

Property Identification

The subject is an unoccupied sit down restaurant with an attached residential component

improvement located at 20-40 East Central Blvd in Cambridge, ID. Local access is average via

US Hwy. 95 thru the city of Cambridge.

Purpose and Date of Appraisal

The purpose of this appraisal report is to estimate the “As Is” value of the Fee Simple interest in

the Subject Property. The property was inspected from the exterior on July 20, 2018.

Intended Use and User of the Appraisal

The intended use of the appraisal is to provide an “As Is” value to our client, Franklin Clawson

in the Appraisal Dept of Zions Bank for loan underwriting purposes.

Extent of Data Collection

As part of this assignment, the appraisers made a number of independent investigations and

analyses. The valuation is based upon the findings contained in this report and is subject to all

the assumptions and limiting conditions contained herein.

Scope of the Assignment

This report is an Appraisal which has been prepared in a summarized format per your request. It

is written in accordance with the Code of Professional Ethics and Standards of Professional

Practice set forth by the Appraisal Institute, and the Uniform Standards of Professional Appraisal

Practice (USPAP) as adopted by the Appraisal Foundation. This appraisal report contains

summarized descriptions of the data, reasoning, and analyses used to arrive at the value

conclusion. The information and data analyzed by the appraiser in completing this assignment is

within the appraisal and/or retained in the appraiser’s file.

The Sales Comparison Approach was employed in the following analysis. The Income Approach

was not performed as the property is located in a small rural community where the highest

percentage of buyers are owner operators, versus investor oriented participants. The aged nature

of the improvements, in addition to limited commercial land sales necessitates the exclusion of

the Cost Approach. The exclusion of the two methodologies does not impact the reliability of

this report as the Sales Comparison method is the most applicable approach to value.

Additionally, I have consulted with buyers, sellers, real estate brokers, real estate developers,

appraisers and public officials to confirm the data as it pertains to the subject in this appraisal

assignment.

An exterior inspection of the subject property occurred on July 20, 2018. Additional property

information was obtained via data accessed through the Washington County Assessor’s Office,



the active listing and realtor, and prior appraisal data. I relied upon the above data and should

these representations be amended, or prove to be inaccurate, the value estimate is subject to

revision.

The appraisal assignment was not based on a requested minimum valuation, a specific valuation,

or the approval of a loan.

Legal Description

According to the Washington County Assessor’s Office the subject is comprised of three tax

parcels identified as follows.

Competency Provision

We have the knowledge and experience to complete this appraisal assignment and have

previously appraised similar type of properties.

Property Rights Appraised/Definitions

A Fee Simple interest is defined as:

Possession of a title in fee establishes the interest in property known as the fee simple estate--i.e.,

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.

Definition of Market Value

The following definition of market value as adopted by the Appraisal Foundation in the Uniform

Standards of Professional Appraisal Practice is as follows:

"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 acting in what they consider their 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."

The preceding definition is the definition upon which the appraisal is premised. This definition is

cited and referred in USPAP AO-22, and in 12CFR564.2(g), 12CFR34.42(g) and 55FR34696,

and in The Appraisal of Real Estate, 14th

Edition.

Property History and Current Ownership

The Subject has been owned by the same entity beyond the three year reporting history required

by USPAP. The property is listed for sale by Michael Bergman, Lee & Associates in Boise, ID.

Past reports of the Subject improvement claims upgrades were performed around 2006± and

included the installation of windows, floor cover, bathroom updates, lighting and some demising

of the rooms. According to Mr. Bergman the property has been exposed to the market for nearly

3 years with an initial listing price of $150,000 that has since been reduced to $139,000,

inclusive of all FF&E. There has been minimal activity even with the reduction in price. Market

investigations indicate that if offered on the open market at market price, the Subject, “As Is”

would likely have an exposure and marketing period of approximately 12 to 18± months given

current market conditions and assuming proper pricing and adequate market exposure. This time

period would fall within anticipated ranges established in similar small rural communities. The

actual 3 year marketing history would indicate that it was originally overpriced.

No additional sales are known to have occurred regarding the subject property over the three-

year reporting period required by the USPAP.

FF&E

As noted, the subject apparently includes FF&E associated with the restaurant operation. The

FF&E associated with this property are not considered real property components. According to

Standards Rule 1-2(e) of the Uniform Standards of Professional Practice, the appraiser must

identify and consider the effect on value of any personal property, trade fixtures, or intangible

items that are not real property but are included in the value estimate. This report excludes any

personal property which would be considered real property.

Estimated Exposure Period

Exposure time is an integral part of the appraisal analysis and is based on one or more of the

following:

Statistical information about days on the market;

Information gathered through dates verification; and



Interviews of market participants

The reasonable exposure period is a function of price, time, and use. It is not an isolated

estimate of time alone. Exposure time is different for various types of real estate and under

various market conditions.

Exposure time is the estimated length of time the property would have been offered prior to a

hypothetical market value sale on the effective date of appraisal. It is a retrospective estimate

based on an analysis of recent past events, assuming a competitive and open market. It assumes

not only adequate, sufficient and reasonable marketing effort. Exposure time is therefore

interrelated with appraisal conclusion of value. In consideration of these factors, I analyzed the

following;

Exposure periods of comparable sales revealed during the course of this appraisal, and;

Knowledgeable real estate professionals.

Based on the foregoing analysis, an exposure time of up to 12-18± months is reasonable. This

estimate assumes the subject would have been competitively priced and aggressively promoted

regionally.

Marketing Time

Marketing time is the period a prospective investor would forecast to sell the subject property

immediately after the date of value, at the value estimated. The marketing time is an estimate of

the number of months it required to sell the subject from the date of value, into the future. The

anticipated marketing time is essentially a measure of the perceived level of risk associated with

the marketability, or liquidity, of the subject property. The marketing time estimate is based on

the data used in estimating the reasonable exposure time; in addition to an analysis of the

anticipated changes in market conditions following the date of appraisal. The future price for the

subject (at the end of the marketing time) may or not equal the appraisal estimate. The future

price depends on unpredictable changes in the physical real estate, demographic and economic

trend, real estate markets in general, supply/demand characteristic of the property type, and many

other factors.

Based on the premise that present market conditions are the best indicators of future demand

performance, a prudent investor will forecast that, under the conditions described above, the

subject will require a marketing time of up to 12 to 18± months, be priced appropriately, and

marketed professionally and aggressively.

State Data

Considering the format of this report and assignment scope given the rural nature of Cambridge

no State data has been presented.



WASHINGTON COUNTY OVERVIEW

Washington County was officially created by act of the 9th Territorial Legislature on February

20, 1879. For many years preceding, this section was already contributing to the historical drama

of the “Old West”, and in the decades that followed, Washington County had given much to the

agricultural and economic growth of Idaho William Allison, of the Upper Valley, later named

Salubria, and Thomas Gray of Gray Creek, Indian Valley were of the Ada County lower house

delegation in the legislature and were the fathers of the act creating Washington County.

Since Governor Mason Brayman signed acts creating both this and Cassia Counties on the same

day, it is impossible to tell whether Washington County was the tenth or eleventh county to come

into being in Idaho territory. The new county of Washington then was composed of all that area

now included in both Adams and Washington Counties. This area came from the extreme

northern part of Ada County and the southwestern part of Idaho County.

The act of creation for Washington County also appointed a temporary board of County

Commissioners, consisting of Isaac Spoor of Indian Valley; Nelson Haven, and S.M. Jeffreys of

lower Weiser whose duties were to call an election to decide upon a location for the county seat,

elect a set of county officers, canvas the vote and declare the county seat. Lower Weiser, which

meant this valley from the Weiser Canyon to the Snake River, and Upper Weiser, the valley

known as Salubria. There was no town at either place, but Lower Weiser did have a store,

located beside the old stage road. Through a bit of political maneuvering Lower Weiser was

selected as the county seat by a majority of eleven votes.

During the summer of 1880, nearly all the land in the fertile valley west of Weiser was settled by

immigrants from other state. There was no water for irrigation and nothing but sagebrush greeted

the eye. The people were all poor and believed they could do so in time. In the fall and winter

following their coming, numerous meetings were held. It was decided to form a corporation for

the purpose of constructing the necessary works for diverting water from the Weiser River to

these arid lands. The Articles of Incorporation and by-laws were written up by Judge Frank

Harris. The first subscription was used to employ a surveyor to locate and survey out the rout of

the proposed canal. The second assessment was to buy some equipment. After working out the

amount of the assessment levied, they had constructed about half mile of ditch or one fortieth of

its length as surveyed and had used up twenty-five percent of the company’s capital. Upon

realization of how little they had accomplished and how much must yet be done to bring the

needed water to their lands the incorporators decided the task was beyond their ability. A new

corporation known as the Weiser Water Company took over the assets of the original company.

Weiser grew at a rapid rate beginning in 1881, as it had been assured fact that the railroad was

coming. After all the bridges were built the rails were rapidly laid out to the Weiser River. A

town was laid out at a point about two and a half miles east of the present depot called New

Weiser. This was an enterprise of R.E. Strahorn, a town site prompter, who had founded the

towns of Shoshone and Caldwell. The first freight and passengers arrived in the winter of 1883.



In 1885, the railroad company built its permanent depot where the present depot now stands.

This caused, the demise of the Strahorn’s venture.

Washington County was not without its mining excitements and many of them occurred. There

were Mineral Ruthbery, now called Heath, Seven Devils, Rapid River, and late the Blue Dog, the

latter being a little ways up Monroe Creed. The first mineral location ever made in the territory

afterwards carved into Washington County was the Peacock, now in Adams County in the seven

Devils County.

Washington County is the 27th most populated and ranks 20th in area among Idaho’s 44

counties. Washington County’s population began a slight decline in 1999 as some residents left

seeking jobs in locations with more diversified economies, after the economic slowdown of

2002-2003. The population began growing again, slowly, and land speculators started looking

towards Washington County. As of 2017 Washington County had a total population just over

10,000.

The following provides the reader with the most current demographic information for

Washington County.



Obviously the County is made up of a vast majority of open public and private lands

interspersed with a variety of ranches, farms, and single family primary and recreational

dwellings of varying type. While a buying market exists it is made up of a fairly small

buying pool.



Cambridge has maintained its buildings which cross the decades, and have survived major fires

or been rebuilt after major mishaps. It prides itself on having four buildings on the National

Register which reflect the life of the residents across the decades: the Masonic Hall, the

newspaper office, the present Museum (a former store), and a residence of a wealthy and

influential family. Other older buildings exist but have not been placed on the Register. Last

summer the Oregon- California Trails Association recognized the 1862 wagon trail as a spur of

the Oregon Trail, and marked the route. Like many small communities, Cambridge struggles in

these uncertain times, but the past reflects a history that the residents would like to share.

Above was taken from City Web Site.



NEIGHBORHOOD DATA

General Overview

The Subject Property is located in the northerly sector of Washington County. The general area

of influence is the area of and surrounding the subject. The surrounding elevated hills are

predominately dry grazing and timbered lands with irrigated cropland in the valley floor. General

access is average via two lane paved county roads, and the proximity to small city centers is

distant yet typical for a rural community. Cambridge’s main occupations are cattle ranching and

the timber industries. People in those occupations typically live far from town on homesteads,

but use Cambridge as their cultural and economic center. People within Cambridge primarily

provide a limited number of basic services to tourists passing through on U.S. Route 95, which is

the primary road from Boise to northern Idaho and beyond.

Local Overview

The subject property is located in the northerly sector of Cambridge’s City Limits. The

neighborhood boundaries can be defined as the City of Cambridge and its adjacent outlying

areas. There is limited commercial activity in Cambridge and Washington County, Idaho as a

whole. A variety of commercial uses exist with most of the structures dating back to the early

and mid 1900’s. The subject was one of two sit down cafes/restaurants in town and both have

closed. I did note a small hamburger joint which was open and is just west of the Subject. It has

been in operation a short time. Given the subject’s location along Central Blvd. and siting in the

downtown Central Business District, the building is seen as having a desirable location (by small

rural community standards) for general restaurant, or related users.

https://en.wikipedia.org/wiki/U.S._Route_95

https://en.wikipedia.org/wiki/Boise,_Idaho



US Highway 95 provides primary access to the City of Cambridge and becomes Superior Street

then Central Blvd as it traverses thru town.

The trend for the subject neighborhood has been relatively status quo. There has been little

demand or redevelopment of the central downtown core, however, limited and sporadic

residential development has been completed within the last few years and is largely older houses

in downtown, or recreational oriented units.

The immediate subject neighborhood (2 block CBD) is approximately 80% built-up with the

balance in vacant commercial or residential lots.

SITE DESCRIPTION

Common and Legal Description

According to the Washington County Assessor’s Office the subject is comprised of three tax

parcels identified as the following.

A metes and bounds legal description has not been provided.

Plat







3 tax parcels

showing Giedd

Morris as owner



Size

The total site size is 0.32 acres. The assessor has allocated 2,701 SF to the residential unit,

rendering 11,239 SF to the restaurant.

Configuration

The subject site is rectangular in shape.

Topography

Based upon the physical inspection, the subject site appears to be level, at street grade level with

the surrounding streets.

Environmental Analysis

No Environmental Assessment has been provided regarding the subject site. The existence of

hazardous materials, which may or may not be present on the subject site, was not observed. The

value estimate is predicated on the assumption that there is no such material on the property.

Any such environmental risk discovered at a later date may require a revised estimate of value


environmental condition. Properties known to have environmental risk may carry a stigma in the

marketplace which also may or may not affect the value.

Soil Conditions

No specific soil tests have been provided to the Jess Payne Appraisal Service considering that the

surrounding existing improvements show no signs of atypical settling, nor were any unusual

signs of settling problems noted for any of the surrounding properties. It is assumed that if any

soil or subsoil problems had previously existed, they have subsequently been corrected.

Drainage/Flood Map Classification

Review of the most recent FIRM map applicable to the subject 16087C0358C dated 6/19/2009,

indicates that the site is not located within a flood plain but in a Zone X- which is an area

determined to be outside the floodplain. Flood insurance would not be necessary.



Development Restrictions

No restriction to site maximization is noted from a topographical standpoint.

Utilities and Easements

It appears that the subject has all public utilities available. Quantities are presumably sufficient

for the existing building. No atypical easements noted but I did not have access to a title report

and recommend my client obtain for their review. I reserve the right to alter my report should

adverse conditions be discovered.

Visibility Classification

The subject property is has good visibility from Superior Street and Central Blvd (US Hwy. 95)

which is a primary arterial. The Subject is located at the NE corner of said crossroads.

Access/Proximity

Local access is average via US Hwy. 95 which becomes Superior Street then Central Blvd.

ZONING

The subject property is located within the Cambridge City limits in Washington County and is

currently Zoned C1 – Local Business. This zoning classification is consistent with the property

surrounding the subject. The residential unit is also a permitted use in the C1 zone, per Sandra at

Cambridge’s City Hall. The residential unit could be rebuilt if it were destroyed by fire.

Site



CURRENT USE According the Cambridge City Code, the existing restaurant use is permitted under the current

zoning regulations. The zone is defined as follows:

C1 Local Business Commercial Zone: Definition: The C1 Zone shall include tracts devoted to small clusters of retail and personal

service shops near residential zones, but not including tracts devoted to manufacturing or

wholesaling and shall be designated as C1 Zones.

Permitted Uses: The following uses and no others shall be deemed Class C1 uses and shall be

permitted in all C1 Zones:

All uses permitted in B Residential Zones, and:

Auditoriums and assembly halls.

Automobile parking areas.

Banks and savings institutions.

Medical and dental offices.

Motels and hotels.

Offices.

Personal service shops.

Places serving food or beverages.

Professional offices.

Radio and appliance repair shops.

Restricted retail businesses not of an industrial manufacturing nature.

Studios.

TAXES

According to the Washington County Assessor’s the subject property is identified as the

following tax parcels:



RPC74400100009A

RPC74400100009B

RPC7440010011A

The current assessed value of the subject property totals $43,964 for the land and $135,109 for

the improvements, for an assembled total of $179,073. As will be further discussed, this is

believed to be above current market value as of the effective date of this report.

Assessor’s data for the subject is contained in the addenda of this report for review. As of the

effective date of this report, all taxes were delinquent for the last half of the year, or $1,388.



BUILDING DESCRIPTION

The following description of the improvements is based upon my exterior inspection of the

subject on July 20, 2018, information provided by the Realtor, data from the Washington County

Assessor, and prior available appraisal data regarding the Subject.

The subject is an aged 3,718± sf unoccupied sit down restaurant with a contiguous 1,640± sf

residential unit consisting of 2 bedrooms and 1.5 bathrooms. The aggregate gross square footage

is 5,385 sf, excluding the 576± detached garage. The improvements are on 3 tax parcel lots

totaling 0.32 acres, or 13,939 sf, rendering a land to building ratio of approximately 2.60:1,

which excludes surplus or excess land but meets normal ratios for this market. Offsite restaurant

parking is required. Site improvements include an open grassed/graveled parking area by the

garage and residential unit, minimal landscape that needs maintenance, curbs & gutters, street

lighting.

The restaurant improvement was reportedly built in the 1907, with progressive updates made

over the years (last one reported in 2006), and has previously been operated as an owner-user

facility, but apparently it was lastly rented out for a short non-durable duration. The Realtor

explained that the upper level is for storage only. The residential apartment unit was reportedly

built in 1971.

Restaurant Bldg Sketch Residential Unit Sketch

Space Breakdown Imp. Size (sf)

restaurant 3,718

apartment 1,640

5,358

Garage 576

Size Allocation



PROPERTY TYPE: Fair quality sit down restaurant bldg with an

attached residential component.

CONSTRUCTION: Fair quality, block and wood frame construction.

EFFECTIVE AGE/CONDITION: 50± years/ Fair condition with deferred

maintenance.

REMAINING ECONOMIC LIFE: 25± years, if properly maintained.

FOOTINGS/FOUNDATION: Poured concrete slab.

EXTERIOR WALLS: CMU block with metal siding.

ROOF: Multi-pitched roof with metal covering.

INTERIOR WALLS: Painted, taped & textured wallboard & vinyl and

wood paneling with pine trim accents. Interior

demising walls configured as a restaurant with a

vestibule at the entry that opens with the dining

room, cahier counter and waitress service area.

There is an enclosed additional dining room,

bathrooms, office and storage area. Upper level is

unfinished with uncertain safe access and deemed

storage space only by the Realtor.

CEILINGS: Painted & textured wallboard, and blue pine

paneling. Fluorescent and incandescent lighting

FLOORS/FLOOR COVERINGS: Sealed concrete with commercial grade carpet and

vinyl.

WINDOWS/DOORS: The windows are vinyl or wood frame double pane

fixed or slider type. The doors include a solid &

hollow wood (w/glass). There are metal entry

doors, and hollow wood & wood with glass doors in

the interior.

HEATING/COOLING: Propane forced air in restaurant area. Electric

powered air conditioning. Propane wall furnace and

electric baseboard heating in the apartment area.

ELECTRICAL/LIGHTING: Assumed per building code. Lighting is

incandescent and fluorescent. Fixtures are assumed

of fair quality.

PLUMBING: Assumed per building code. City water & sewer.



EXTERIOR IMPROVEMENTS: Site improvements include an open gravel/yard

parking by the garage, curbs & gutters, street

lighting, signage, and fair landscaping.

ADDITIONAL FEATURES: Reported 2 beds, and 1.5 bathroom adjacent living

unit with carport and a detached 2 car garage.

FF&E: FF&E has been specifically omitted from this

appraisal report and from prior reports would

include kitchen furniture, fixtures, and equipment

(including a walk-in freezer).



HIGHEST AND BEST USE

In common appraisal practice, the concept of highest and best use represents the premise upon

which a value estimate is based:

The reasonably probable and legal use of vacant land or an improved

property, which is physically possible, appropriately supported, financially

feasible, and that results in the highest value.

The determination of highest and best use is the result of the appraiser’s judgment and analytical

skill. The reader is cautioned, however, that the highest and best use of a property is not

necessarily its most likely use. Furthermore, the use determined from analysis represents an

opinion, not always a “fact” to be found.

In practical application, the determination of highest and best use of a property is analyzed, both

as vacant, and as improved, subject to the following four criteria: 1) legally permissible, 2)

physically possible, 3) financially feasible and 4) maximally productive. Following is our

opinion of the highest and best use of the property under analysis.

Highest and Best Use, As Vacant

In analyzing the highest and best use, as vacant, the appraiser analyzes the most likely and

probable use of the site as vacant. In the case of the subject property, the site is currently

improved with a fair restaurant building and in fair assumed condition. The improvement is

Legally Permissible, Physically Possible, Financially Feasible and Maximally Productive.

Consequently, the subject passes the four (4) tests of Highest and Best Use. Therefore, rather

than debate the theoretical, we have concluded that the Highest and Best use of the subject site,

as vacant, is for commercial/retail development when market demand would dictate in the

Cambridge market.

As Improved

Again, the subject consists of a historic, former owner occupied restaurant improvement with an

accessory residential unit attached. The gross building area is 5,358± square feet. The property

is situated on a 0.32± acre assembled site. There is limited commercial activity in Cambridge

and Washington County, Idaho as a whole. The subject was one of two sit down

cafes/restaurants in town and had a reported significant prior operating history. Both restaurants

are now closed which could be a function of other criteria such as health, death, divorce, etc. and

not necessarily tied to demand for restaurant goods. I have not been provided any

operating/income or P&L statements with which to determine the ongoing concern but from

purely past history alone, the local and drive though traffic kept both restaurants functioning for

many years. As is the case with most small communities the income derived is sufficient for

operation but not excessive in terms of profitability. Demographics for the area reflect the small

population and trade area though traffic adds to the consumer base. There is competition for the

restaurant business as a new eatery (hamburger eatery) is now open to the Subjects west in



conjunction with the Country Café in Midvale (9 miles south), and Lakey’s restaurant about 14

miles north also along Hwy 95. Malia, a Realtor in town with Creed Noah sold the Subject many

years ago. She claims that no sit down restaurant currently exists and the closing of the Subject

and Bucky’s was due to mismanagement. Malia believes the town can easily support a well

operated ma/pop restaurant. The regional economy is agricultural driven with limited local

industry. The population is now around 328 which mean the area has not experienced much

change in a rather extended period of time.



The following is a synopsis of the current active and sold market (last 12 month – sold) for the

Cambridge and extended related market area, followed by data for the previous 4 years. As

would be expected the real estate activity is limited for the commercial sector.

below indicates a 4 year history

Below indicates data regarding residential housing for the past 12 months.

Travelers along Hwy 95 make up a rather steady consumer base so demographics are not the

only criteria by which to examine the industry. Given the subject’s location along Central Blvd.

and siting in the downtown Central Business District, the building is seen as having a desirable

location by general restaurant users. Considering the location of the subject (a primary travel

corridor) and continued community desire for restaurant facilities, it appears that there would be

some demand for such a facility in the subject’s immediate market area. The existing

improvement is functional for users that need an established restaurant in the Cambridge CBD

and have the financial backing and experience to operate such a facility.

For these reasons, the current use of the improved parcel is concluded to be maximally

productive, and the Highest and Best Use of the property. Continued maintenance will be

required as will good management, service, and product.



Property Strengths & Weaknesses

Strengths

Size, & Design – The subject’s size, current demising and design is well sized for a local

and pass thru eatery.

Location – the subject enjoys main thorough fare access within Cambridge and from

outlying communities. Its nearest true competition is Midvale to the south. Area

populace and traffic could support a well operated restaurant.

Quality & Condition – the subject reportedly underwent a restoration around 2005-2006.

The restaurant & residential components are assumed to be functional and would be

appealing to a select group due to the essence of a turn of the century historic building.

Weaknesses

Immediate Market – Cambridge consists of less than 350 persons. The subject as a sit

down restaurant is dependent on locals and travelers and good management in order to

remain a viable business.

Deferred maintenance was apparent from my exterior inspection such as peeling paint

and yard maintenance. Roof and interior condition unknown but assumed to be fair based

on its exterior presence and vacancy. See limiting conditions regarding potential

structural concerns.

Most Probable Buyer

The subject property was an owner occupied restaurant that has gone dark. From reports the last

user was a short term tenant that mismanaged the business. Reportedly the restaurant had a long

term successful operation many years ago and could again if proper management were involved.

However, based upon the rural locale, it has limited appeal to a majority of owner users but a

small market of owner-users does exist. If priced properly and given professional marketing a

sale would likely be consummated near 12-18± months.

Due to its configuration, condition and location the subject improvement is viewed as

having primary appeal to an owner occupant.

Conclusions

Active purchasers are likely to be adequately capitalized owner occupants. According to

interviews with area commercial brokers, the majority of smaller, retail sales in rural locations

have included owner occupants with a strong equity position taking advantage of the small town

pricing, and sometimes a distressed market. Cambridge will likely remain as it is in terms of

growth with continued small town stability projected.



VALUATION THEORY

In traditional valuation theory, the three approaches to estimating the value of an asset are the

Cost Approach, the Sales Comparison Approach, and the Income Capitalization Approach.

Cost Approach

The Cost Approach considers the cost to replace the existing improvements, less accrued

depreciation, plus the market value of the land. The Cost Approach is the best means of

estimating reproduction costs. Based upon the subject’s actual age of 111 years, the

subjective application of depreciation; and the limited amount of market data available the

Cost Approach was not used.

Sales Comparison Approach

The Sales Comparison Approach estimates value based on what other purchasers and sellers in

the market have agreed to as price for comparable improved properties. This approach is based

upon the principle of substitution, which states that the limits of prices, rents, and rates tend to be

set by the prevailing prices, rents, and rates of equally desirable substitutes. In conducting the

Sales Comparison Approach, data is gathered on reasonably substitutable properties and

adjustments are made for factors including market conditions, zoning, location, conditions of

sale, etc. The resulting adjusted prices lead to an estimate of the price one might expect to

realize upon sale of the property.

Income Capitalization Approach

The Income Capitalization Approach simulates the reasoning of an investor who views the cash

flows that would result from the anticipated revenue and expense on a property throughout its

lifetime. The net income figure developed in our analysis is the balance of potential income

remaining after vacancy and collection allowances, and operating expenses. This net income is

then capitalized at an appropriate rate to derive an estimate of value. Thus, two key steps are

involved: (1) estimating the net income applicable to the subject based on market rents and (2)

choosing appropriate capitalization rate.

During my market investigation I found no durable or meaningful rural restaurant rent

comparables within the Subject nor extended area. I did find leased investment grade,

restaurant properties within the greater Treasure Valley market. However these leases are

much higher than the trend expected for the Subject and they would offer no validity in the

valuation of the subject as a rural owner occupied type of property. The Subject is not a

typical third party investment property; the likelihood of it being purchased for investment

purposes is extremely low. Consequently, this Approach was not used. Given the two

distinct uses of the Subject (restaurant and residential) a valuation for each component will

be rendered.



SALES COMPARISON APPROACH

It is assumed in this approach that there exists a market for the type of property being appraised,

and that data on recent sales of similar, competitive properties in the market are “arms length”

transactions, indicating a most probable sale price that the subject property would bring as of the

valuation date. Although individual sales often deviate from a situation where both buyer and

seller are knowledgeable market participants, it is assumed that a sufficient number of sales

should tend to reflect investor patterns of prices (and thus values) in that particular market.

The following process is typically undertaken in order to develop an informed opinion of a

property’s value using the Sales Comparison Approach:

Search out sales, listing, or offerings of similar properties.

Confirm the prices as to terms, reason for purchase, and if a bona fide sale.

Compare the sale property’s attributes with those of the property being appraised.

Analyze all the differences as to their probable effect on the sale price.

Form an opinion of the relative value of the property under appraisal as compared

with the sale price of each similar property.

Some of the economic units of comparison which may be utilized in this approach are Overall

Rate (OAR), Gross Annual Income Multipliers (GAIM or GIM), Effective Gross Income

Multipliers (EGIM); and some of the physical units of comparison are price per square foot of

building area, price per unit, price per room, etc.

On the pages that follow, a discussion of the data utilized is presented, leading to a conclusion of

value for the subject property via the Sales Comparison Approach.

Discussion of Market Data

In an effort to provide a reliable indication of the subject’s potential market value, I have had

extensive conversations with marketing agents actively involved with marketing of rural

restaurant improvements presently listed for sale and who were directly involved with

transactions detailed in this report.

The reader will note that all of the Comparable Sales are found in either the Subjects general

market area or competing rural markets.

The following Sales were selected as bracketing the range of potential values for the subject

Restaurant property. Following this section will be an analysis regarding the residential unit.



Summary of Sales

General Data Comp 1 Comp 2 Comp 3

Common Name: The Loft Slims Tavern Vigilantes

Address: 125 W. Idaho Street 65 E. Bridge Street 363 N. Main Street

Weiser, ID Midvale Donnelly, ID

County: Washington, ID Washington, ID Valley

Property Type: Restaurant & Apt Tavern Restaurant

Bldg Size (GBA): 3,834 2,565 3,400

Bldg Size (UA): 3,834 2,565 3,400

Survey Date: (July 18) (July 18) (July 18)

Transaction Information

Grantor: Robert Herrick Downs Fritchley

Grantee: Amber Brown G&BS Crazy Ventures Inc Jeff Selmor

Sale Price : $129,000 $35,000 $200,000

Sale Price/sq. ft. $33.65 $13.65 $58.82

Closing Date: 4/16/2018 1/27/2016 (Jan 15)

Terms: Cash & Owner Carry at Market Cash Cash

Land Size (Acres) : 0.16 0.06 0.17

Land Size (Sq. Ft.) : 6,970 2,940 7,405

LTB Ratio 1.82 1.15 2.18

Financial Indicators

Source of Financial Info: N/A N/A N/A

OAR: N/A N/A N/A

Construction Data

Construction Brick/Flat Roof Wood Frame Wood Frame

Quality: Fair Average/Good Average

Heating/Cooling: GFAU FAU/Wall HVAC

Roof: Asphalt Comp,Gabled Flat, sloped roof

# of Levels: 2 1 1

Interior Finish: Fair-Average Average Average

Utilities: All Available All Available All Available

Condition: Fair Avg to Fair Average

Parking: On & Off Site Off Site Open Pad

Access: Average Average Average-Good

Exposure: Fair Average Average

Assessor's Data

Parcel Number: RPW2650014007A RPM6510007021A RPD0069001023CA

Legal Description:Lot 7-8 Blk 14 Watlingtons Add Pump

ShopW 60' of lot 7 Block 7 Midvale S2 of Lot 23, 24 & 25 Donnelly Township

Year Built: 1928 1908 1983

Comments: Old brick two story building which

contained The Loft Restaurant with

professional kitchen. A section was

demised for a banquet hall and upstairs

was an apartment. There wer 3 bathrooms,

2 laundry rooms, and a large detached

garage. Some parking available on rear of

lot. Loation is near downtown and City

Offices.

Turn key business that included the

inventory and liquor license. Was used as a

tavern with progressive upgrades made

over the years. Overall condition rating

was average to fair. Small town business

which sold at absolute auction. $20,000

was allocated for the license and inventory

and excluded from the sales price reflected

above. Realtor believes it sold well

below its market value though demand was

nominal.

Sale of former Double Eagle Restaurant

with Hwy. 55 access & exposure. Mr.

Jones noted that the total purchase price

was $320,000. with $120K attributed to

the FF&E and liquor license. Demising

(including the bar area) was slightly

changed after purchase. Currently Cougar

Dave's Restaurant.

Assessor/Realtor/OwnerAssessor/RealtorConfirmation: Steve Jones



Summary of Sales

General Data Comp 4 Comp 5

Common Name: Intersection Bar & Grill Double Barrel Deli

Address: 206 Main Street 120 Illinois Avemue

New Meadows, ID Council

County: Valley Adams

Property Type: Restaurant Deli Restaurant

Bldg Size (GBA): 3,600 1,435

Bldg Size (UA): 3,600 1,435

Survey Date: (July 18) (July 18)

Transaction Information

Grantor: Idaho First Bank Miltn Corp Olson Norma G

Grantee: Shanon Fairchild Jeff Sheets

Sale Price : $115,000 $50,000

Sale Price/sq. ft. $31.94 $34.84

Closing Date: (Dec 14) 4/10/2017

Terms: Owner Carry at Market Cash

Land Size (Acres) : 0.18 0.06

Land Size (Sq. Ft.) : 7,800 2,750

LTB Ratio 2.17 1.92

Financial Indicators

Source of Financial Info: N/A N/A

OAR: N/A N/A

Construction Data

Construction Masonry & frame. ConcreteBlk/ Flat Roof

Quality: Fair/Average Fair-Average

Heating/Cooling: HVAC OFA/Wall

Roof: Built Up w/façade Metal/Rolled

# of Levels: 1 1

Interior Finish: Fair/Average Fair/Average

Utilities: All Available All Available

Condition: Average Avg to Fair

Parking: Off Site Off Site

Access: Average Average

Exposure: Average Average

Assessor's Data

Parcel Number: RPM0240022005C A RPC02600020060A

Legal Description:Blk 22, NM Twnst., (Sagebrush BBQ), Tax

#2578 in Lots 5-7

Lot 6, Block 2 Perrill Division of the City

of Council

Year Built: 1982 w/ 2007 Remodel 1920's±

Comments: Distressed, bank held property which had

been vacant for approximately 3 years

prior to the current owner leasing with a

purchase option. Total purchase price of

$170,000 has been adjusted to account for

FF&E, $20K of TI's, 2 adjacent structures

and excess land.

Had been the Longbranch saloon for 40±

years then converted into a deli restaurant.

Structure needed to be updated. Built-ins

(FF&E) were old and dated and of minimal

contribution. Located within a small rural

community.

Realtor/AssessorP & S AgreementConfirmation:



COMPARABLE MAP

Based upon market investigations, the presented sales from various developments in the

subject’s market area have been selected for comparison to the subject. Competition in the

immediate and overall neighborhood should be carefully considered in this analysis. In order to

achieve typical absorption levels, the subject must be competitively priced. The location of the

subject, size of the improvement, surrounding amenities, condition and quality place it within the

range of values as presented in the summary above.

Analysis; Price/sf

The comparables range in unadjusted sales price is from $13.65 sf to $58.82 sf. All of the sales

represent improvements of basically similar utility to the subject, or at least would attract similar

type purchasers. The transactions range in sale dates from December 2014 to April 2018. No

active listings were utilized.



Given the subject’s quality, design, condition and location, I would anticipate its value to trend

towards the mid to lower end of the presented indicators.

Adjustments

A summary of the applied adjustments is presented following. Each of the comparables is

considered similar with regard to most categories. The primary differences relate to conditions

of sale, market conditions and variances in location and physical attributes.

All sales are considered similar in property rights conveyed and financing terms so no

adjustment has been applied.

Conditions of Sale

This adjustment considers the motivations of the buyer and seller.

Comp 2 was sold at an absolute auction and reportedly sold below anticipted market value. I

concur that its price reflects a value below market expectations. As such, it received a positive

20% adjustment which would bring it closer to its actual market value.

Comp 4 was a Bank owned lease option sale of a restaurant and retail/office complex in New

Meadows ID. While being bank owned its sale price reflected current market expectations based

upon my analysis and discussions with area market participants. As such, no adjustments were

applied.

Market Conditions

As noted, overall retail sales activity in the larger metro areas of the Valley has been on a

dramatic upswing. Yet the smaller rural/agric oriented communities like the Subject have

remained fairly stable, or stagnant. The chart below is based on our comparables and they are a

reliable sampling of the larger population of Sales, indicating that adjustments for time are not

supportable for this particular market.

$0.00

$25.00

$50.00

$75.00

$100.00

$125.00

Jun-14 Dec-14 Jul-15 Jan-16 Aug-16 Mar-17 Sep-17 Apr-18 Oct-18

Overa

ll P

rice P

er

Sq

uare

Fo

ot

Date of Sale

Value Over Time



Location

This adjustment reflects any differences attributable to location. The basis for this adjustment is

proximity to major arterials in the area and location within the perceived growth corridor. With

respect to commercial use, those improvements in close proximity to existing developments or

desirable recreational havens are considered superior to those in more remote areas. The quality

and price levels of surrounding residential developments are also considered as an indication of

location quality, as is the overall desirability and aesthetics. The location adjustment

consideration falls under three categories neighborhood, access, and visibility.

Neighborhood: This adjustment reflects any differences attributable to location or appeal of the

site due to neighborhood surrounding land uses. The subject is generally surrounded by

commercial, and aged residential uses in the two± block CBD.

In this case, three of the comparable restaurant type sales are located in larger and superior

neighborhoods than the subject. Comp 1 is located in Weiser, a larger market, and closer to the

metro areas so a downward adjustment was applied. Comp 3 is located in another small town but

it is more recreational with a stronger demand and a downward adjustment was required. Comp 4

is located in a small community but it too has a superior recreational base and adjusted

accordingly. Adjustments for this element range between positives 10% to 20%.

Access: The subject property has average access from neighborhood and County arterials and the

outside community. The restaurant oriented comparables presented all provide reasonable access

for various users and all, excluding Comp 3 are similar in this regard. Sale 3 is located on Hwy

55 in Donnelly, the major arterial connecting Boise to McCall ID. It required a negative 10%

adjustment for access.

Visibility: The subject has average visibility, as it is located along US Hwy. 95 frontage (though

has a different name within the CBD). Only comparables 3 is deemed superior in exposure, and

was adjusted by a negative 10%.

Physical Attributes

The following adjustments were made for differences in effective age/condition, finish quality,

amenities and design/function. The subject consists of an assumed average to fair quality

construction in assumed average to fair condition.

Two Comparables are superior in overall condition as compared with the existing subject

improvement and required 5% to 10% adjustments.

The subject interior reportedly consists of a rustic décor with some upgraded finishes years ago.

All sales had similar interior build outs and finish when compared with the existing subject

improvement other than Comp 3 which was adjusted downward 10%.



All Comparables function as restaurant (or similar) oriented type improvements and to a degree;

all are similar in utility as compared with the subject.

After analysis, no adjustments for LTB Ratios were necessary. In this section I am allocating the

same site size as the County assessor which is 11,240 SF for the restaurant, and 2,701 SF for the

residential section.

Building Size

Following is a graph showing trending in building size and sales price.

With consideration to a larger market sample than is displayed and the assessors data base, no

adjustments were deemed applicable. Even though the chart indicates some trending based on

size the sampling is rather small and further data within my files and discussions with

commercial Brokers, suggest no adjustments would be necessary.

All of the Comparables are considered similar in the remaining categories and required no

further adjustment.

Following are the adjustment considerations.

$0.00

$25.00

$50.00

$75.00

$100.00

$125.00

1,000 2,000 3,000 4,000 5,000

$/S

qu

are

Fo

ot

Square Foot

Size Adjustment Chart



BUILDING SALES ADJUSTMENT GRID

Comp 1 Comp 2 Comp 3 Comp 4 Comp 5

Sale Price/sf $33.65 $13.65 $58.82 $31.94 $34.84

Property Rights Conveyed 0.00% 0.00% 0.00% 0.00% 0.00%

Adjusted Price/sf $33.65 $13.65 $58.82 $31.94 $34.84

Financing Terms 0.00% 0.00% 0.00% 0.00% 0.00%


Conditions of Sale 0.00% 20.00% 0.00% 0.00% 0.00%


Market Conditions (Time) 4/16/2018 1/27/2016 (Jan 15) (Dec 14) 4/10/2017

Aging/months 3 30 42 43 15

0.00% 0.00% 0.00% 0.00% 0.00%


Location

Neighborhood -10.00% 0.00% -20.00% -10.00% 0.00%

Access 0.00% 0.00% -10.00% 0.00% 0.00%

Exposure 0.00% 0.00% -10.00% 0.00% 0.00%

Net Adjustment -10.00% 0.00% -40.00% -10.00% 0.00%


Physical Attributes

Effective Age/Condition 0.00% 0.00% -10.00% -5.00% 0.00%

Finish 0.00% 0.00% -10.00% 0.00% 0.00%

Design/Function 0.00% 0.00% 0.00% 0.00% 0.00%

Land to Building Ratio 0.00% 0.00% 0.00% 0.00% 0.00%

Net Adjustment 0.00% 0.00% -20.00% -5.00% 0.00%


Economic Attributes 0.00% 0.00% 0.00% 0.00% 0.00%


Non-Realty Attributes 0.00% 0.00% 0.00% 0.00% 0.00%


Lump Sum / Other $0.00 $0.00 $0.00 $0.00 $0.00


Building Size (RA) 3,834 2,565 3,400 3,600 1,435

0.00% 0.00% 0.00% 0.00% 0.00%

Subtotal Adjusted Price/sf $30.28 $16.37 $28.24 $27.31 $34.84

Comp 1 Comp 2 Comp 3 Comp 4 Comp 5


Net Adjustments -10% 20% -52% -15% 0%

Gross Adjustment 10% 20% 60% 15% 0%

Mean: $27.41 $16.37 Low $34.84 High

Median: $28.24 Range within one standard deviation of mean:

Standard Deviation: $6.82 $20.59 to $34.23



The adjusted range for the presented comparables is from $16.37 sf to $34.84 sf, with a mean

and median of $27.41 sf and $28.24 sf respectively. Overall, the subject improvement is

believed to be most accurately represented by the mid to lower range.

We have ranked the subject compared to the adjusted comparables in the following table:

In this instance, the comparable sales establish general market parameters and provide a reliable

indication of the market value of the subject's rural restaurant improvement. Secondary

consideration has been given to our conversations with various market participants. The general

consensus was that the subject’s location within the Cambridge market and its corresponding

market size, effectively limited overall commercial potential.

In the final analysis, we have estimated a value indication for the subject restaurant

improvement as follows.

Again, no FF&E has been included. Also, no deductions for stabilization were considered as the

Subject is an owner-user facility and would be purchased as vacant, which would also be

reflected by the comparables. The taxes are in arrears but I assume they will be brought current

prior to a sale.

Comparable # Size (sf) Adjusted Price/sf

Comp 5 1,435 $34.84

Comp 1 3,834 $30.28

Comp 3 3,400 $28.24

Comp 4 3,600 $27.31

Subject 3,718 ~~~

Comp 2 2,565 $16.37

Comparable Ranking

Sales Comparison Summary size price/sf total

Restaurant 3,718 $25.00 $92,950

Building Value By The Sales Comparison Approach $93,000



Residential Analysis

In the next section, I will analyze the market value contribution of the attached residential unit

via the Sales Comparison Approach. I have utilized three SFR comparables within Cambridge.

They are detached units with several variances from the Subject, therefore adjustments will be

applied.

COMPARABLE HOUSE SALES MAP



Following is our adjustment grid for the house, accessory buildings and building site;



Discussion of Adjustments

Obviously differences do exist and adjustments were required. No adjustments were required for

property rights conveyed, financing terms, conditions of sale, etc. No time adjustments were

supportable. Comps 1 and 2 were adjusted downward as they are superior in locale. They are

impacted by being near the CBD but are just off the primary corridor vs. our Subject and Comp

Analysis Grid

Address

City

State

Date

Price

Gross Sq Ft

GBA Unit Price

Transaction Adjustments

Property Rights Fee Simp 0.00% Fee Simp 0.00% Fee Simp 0.00%

Financing Cash 0.00% Cash 0.00% Cash 0.00%

Conditions of Sale Normal 0.00% Normal 0.00% Normal 0.00%

Expenditures After Sale

Adjusted GBA Unit Price

Market Trends Through 7/20/2018 0% 0% 20 0% 5 0% 11

Adjusted GBA Unit Price

Location/Access

% Adjustment

$ Adjustment

Site Size/View

% Adjustment

$ Adjustment

Design/Quality

% Adjustment

$ Adjustment

Year Blt/Condition

% Adjustment

$ Adjustment

Main Level sf

% Adjustment

$ Adjustment

Basement Level sf

% Adjustment

$ Adjustment

FP/Heat-cool/ Utility

% Adjustment

$ Adjustment

Grg/Carport/Outbldg

% Adjustment

$ Adjustment

All Site Amenities

% Adjustment

$ Adjustment

Adjusted Acre Unit Price

Net Adjustments

Gross Adjustment

$17.68 $22.62

$16.52 $32.65

Subject Comp 1 Comp 2 Comp 3

40 E. Central Blvd 165 N. Superior Street 65 W. Hopper Avenue 55 S. Superior Street

Cambridge Cambridge Cambridge Cambridge

Idaho Idaho Idaho Idaho

7/20/2018 11/18/2016 2/20/2018 8/20/2017

$0 $53,000 $47,500 $47,000

1,640 1,109 924 1,096

$0 $47.79 $51.41 $42.88

Fee Simple

Cash or Equiv.

Normal

$0 $0 $0

$47.79 $51.41 $42.88

$47.79 $51.41 $42.88

CBD/Public Near CBD/Public Off CBD/Public CBD/Public

-5.00% -10.00% 0.00%

-$2.39 -$5.14 $0.00

2,701 SF/Street 15,681 SF/Street 7,405 SF/Street 8700 SF/Street

-20.00% -10.00% -10.00%

-$9.56 -$5.14 -$4.29

Attached Fair Detached Fair Detached Fair Detached Fair

-10.00% -10.00% -10.00%

-$4.78 -$5.14 -$4.29

1971/Fair 1948/Avg- 1948/Avg- 1955/Avg-

-10.00% -10.00% -10%

-$4.78 -$5.14 -$4.29

1640 1109 924 1096

10.00% 12.00% 11.00%

$4.78 $6.17 $4.72

0 1109 924 0

-30.00% -30.00% 0.00%

-$14.34 -$15.42 $0.00

See Comments Similar Similar Similar

0.00% 0.00% 0.00%

$0.00 $0.00 $0.00

See Comments None None Similar

2.00% 2.00% 0.00%

$0.96 $1.03 $0.00

$0.00 $0.00 -$1.29

Fair Similar Similar Superior

0.00% 0.00% -3.00%

$17.68 $22.62 $33.45

63.00% 56.00% 22.00%

Mean: $24.58

87.00% 84.00% 44.00%

Low-High

Median: $22.62

Standard Deviation: $8.06 to

Range within one standard deviation of mean:



3. Varying adjustments were made ranging from 5% to 10%. Site sizes and value vary and all

Sales were adjusted downward.

All Comps required downward adjustments for being superior detached units vs. the Subjects

attachment to the restaurant structure negating a standalone status. Most market participants

would make an adjustment for this negative market influence. Adjustments were made for ages

and conditions in addition to square footage variances. Adjustments were applied as pertains to

each Sale. Basement contributions of two Sales were adjusted downward and Comp 1 and 2 were

adjusted for the contribution of the Subjects garage.

Conclusion

In this instance, the adjusted comparable sales establish general market parameters and provide a

very reliable range of indications of market value for the subject house, outbuilding and site.

In the final analysis, with consideration to all factors, I have estimated a contributory value

indication for the residential portion as indicated below.

Comparable # Acres Adjusted Price/Ac

Comp 3 1,096 $33.45

Comp 2 924 $22.62

Subject 1,640 ~~~

Comp 1 1,109 $17.68

Comparable Ranking

Low:

High:

Average:

Reconciled Value/Unit Value:

Subject Size: *

Type of Unit Value:

Total Reconciled Value:

$17.68

Ranges & Reconciled Values

$22.00

1640

square foot

$36,080

$33.45

$24.58



RECONCILIATION

In this instance, the comparable sales presented establish general market parameters and are

considered to provide a reliable indication of market value of the subject improvement on a price

per square foot basis. Rather than form a blended value for the two property types (commercial

& Residential) I elected to analyze the contribution of each property type and usage and

reconcile them into a value for the assembled property unit.

Again, the subject site is located on the north end of the downtown Cambridge area. The location

is viewed as having primary commercial appeal considering its location, and relative ease of

access. Given the characteristics and location of the subject, an estimate lying toward the

middle to lower ends of the indicators is believed applicable for the subject improvement, in

assemblage.

With regard to the subject property, the general consensus was that it was an owner

occupied type of property whose primary appeal was to an end user in need of Cambridge

restaurant/Retail space with a residential component. All participants interviewed

identified the subject as having the current greatest value potential to an owner/user.

In the estimation of market value, emphasis is given to the Sales Comparison Approach. The

reliability of this report is not lacking due to the exclusions of the Cost and Income Approaches

for reasons previously stated.

The property was originally listed near $150,000 and had been on the market 3± years. It has

been reduced to $139,000. According to the Realtor (Michael Bergmann) it may need a further

reduction in order to sell. He would like to see it reduced to $100,000±. Malia Bumgarner, a

long time Realtor in Cambridge at Creed Noah RE believes she could sale the property near its

current listing price. I have concluded to a value which is less than the current listing price given

the long term listing of the Subject with few active purchasers showing interest, and in view of

my findings as presented herein.

Based upon the physical inspection of the Subject Property, the analyses undertaken, the market

and ancillary investigations performed, and subject to the Assumptions and Limiting Conditions

set forth in the report, the Addenda and this Letter of Transmittal, it is my opinion that the

market value of the Fee Simple Estate of the improved subject property “As of the Effective

Date” of July 20, 2018, was:

Please refer to all limiting conditions specified within this report.

Sales Comparison Summary size price/sf total

Restaurant Component 3,718 $25.00 $92,950

Residential Component 1,640 $22.00 $36,080

Building Value By The Sales Comparison Approach $129,030

Rounded Value: $129,000



ADDENDA

1. Engagement Letter

2. Assessor & Property Data

3. Marshall & Swift

4. Insurable Cost Worksheet

5. Environmental Site Inspection

6. Americans With Disabilities Act (ADA) Supplement

7. Professional Qualifications

Date Awarded: July 18, 2018 RIMS No: ZFC-18-000816-01-01SERVICE PROVIDERAppraiser: Jess Payne Appraisal Firm: Jess Payne Appraisal

ServicePhone No: 208-454-2991 Address: 53 N. Plummer Road

Star, ID 83669Email: [email protected] INFORMATIONBorrower's Information: Property Contact(s): Name: Tammy Giedd Tammy Giedd, Borrower

Phone: 208-989-8391Phone No: Not ProvidedProject Name: APN: RPC7440010009A,

RPC7440010009B, RPC7440010011AProperty Type: Retail-Commercial - Restaurant-Sit Down

Building Size: 5625 SF

Property Address: 20 E. Central Blvd. Building Age: 0City: Cambridge Parcel Size(Site Size): 0.32 AcresCounty: WashingtonState: ID Zip: 83610

Property Description/ Construction Type: An existing mixed-use property which include a 3,845-SF restaurant and an adjoining 1,780-SF, 2-bedroom 1.5 bathroom residence. The restaurant and home were constructed in 1907 and 1971, respectively.

Property Comment: The owner reportedly rented out the restaurant, though there is some question as to the tenant's ability to meet rental obligations. The residence is thought to be occupied, and may be rented out.

The property has been listed for sale. A loopnet listing shows a price of $139,000 though references just 2 of the 3 subject parcels.

VALUATION PARAMETERS

Premise Qualifier Interest CommentMarket Value As-Is Fee Simple Real property only.

The property should be valued in fee simple, unless there are paying tenant(s) under documented lease(s) to be provided the appraiser. If the latter conditions, then value the leased fee interest.

Disposition Value As-Is Fee Simple The Zions Bank Disposition Value and

a division of ZB, N.A.

supporting analysis must be set forth in a separate addendum letter that references the appraisal report. The appraisal report should not reference the addendum letter.

RFP COMMENTSBorrower cooperation is not assured. The appraiser should contact ARD if full access is not allowed.

Please quote best turn time in weeks to the nearest half week. Note the account officer's Desired Delivery Date indicated above.Per the engagement letter, please include the Insurable Cost Worksheet (item 13 under Scope of Work), the Environmental Site Inspection Form (item 14), and the Disclaimer Language Insert (see Contract Terms and Agreement).

SCOPE OF WORK

The report or addenda must, at a minimum, include the following (if applicable and available):

1. The burden of proof is on the appraiser to decide before accepting an assignment that the scope of work applied will result in opinions and/or conclusions that are credible. The exclusion of any approach or approaches requires a discussion of why the approach is not an appropriate or reliable valuation model for the property appraised and a statement that the analysis presented results in a credible value conclusion.

2. A signed Certification mirroring the template included in USPAP is required. 3. The date of value(s) and the date of the report must be clearly stated in the report. 4. A separate and detailed Scope of Work section. 5. Photographs of the subject property and comparable properties. 6. Plat map, site plan, floor plans and elevations. 7. Subject property tax Information (including current tax rate and special

assessments). 8. The effective age and remaining economic life. Careful consideration is requested

as the term of our loan must be less than your estimated remaining economic life. Please contact the client/review appraiser if your estimate is less than 30 years.

9. Neighborhood, site, and comparable maps. 10. In addition to the exposure time, a statement of the estimated marketing time for

the subject property.11. Transaction and property details for each rental and sales comparable, including

the confirmation source.12. Adjustment grids showing quantitative adjustments are preferred. All adjustments

must be explained in sufficient detail to allow the reader to understand the appraiser's reasoning, support for the adjustment and to allow the reader to determine the reasonableness of the conclusion.


13. Insurable Cost Worksheet. 14. Environmental Site Inspection Form. 15. At a minimum, the Certification should include the certification language included

in the current edition of USPAP. Additionally, the Client requires the following statement: The Appraisal Assignment was not based on a requested minimum valuation, a specific valuation, or the approval of a loan.

In addition, the Scope of Work items specified for the subject property type must be included, as provided in the Appraisal Standards and Guidelines for Commercial Properties found in the Reference Documents section of RIMS Central.

ADDITIONAL INSTRUCTIONS

Scope of Appraisal: Approach ALLDescription: ALL APPLICABLE APPROACHES TO VALUE

Special Directions: None

Project Purpose: Loan Underwriting

Intended User: Zions First National Bank, a division of ZB, N.A., US Small Business

Award Comments: Please upload electronic copy of report and separate electronic invoice. Do not send a hard copy of the invoice.

CONTRACT TERMS AND GENERAL REQUIREMENTSLoan Officer Contact InformationLoan Officer Name: Matthew BarrettPhone No: 801-844-7704Email: [email protected]

Please address the reports and invoice to: Zions First National Bank, a division of ZB, N.A. - Appraisal DepartmentAttn: Frank ClawsonOne South Main StreetSalt Lake City, UT 84133Phone: 801-844-7334Email: [email protected]

The Environmental Site Inspection Form, available in RIMS, is to be completed by the appraiser as part of this assignment. Zions First National Bank recognizes that the appraiser is not an Environmental Professional. This form makes note of conditions observed during the routine inspection of the property. Upon completion of the Environmental Site Inspection Form, upload this document and any associated


photographs to RIMS. Photographs should be taken of suspicious containers, questionable handling of toxic or chemical substances, or any other potential "red flag" issue. The information in the Environmental Site Inspection Form is vital to our assessment of the collateral. Therefore, we request that these documents be uploaded to RIMS no later than 24 hours after the inspection.

ENCLOSURES: You are responsible to view all documents made available to you in RIMS Central (Should you need additional information beyond what is provided, please contact the account officer directly).

REPORTING REQUIREMENTSThe appraisal and report are to be prepared in conformance with the requirements of the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA); the Interagency Appraisal and Evaluation Guidelines; the ZB, N.A. Appraisal Standards and Guidelines (including scope work) and the Uniform Standards of Professional Practices (USPAP). The appraisal should include an estimate of exposure time as required in Statement 6 (USPAP) and clearly state the Scope of Work and reporting options used under Standard 2-2(USPAP). The determination of Market Value should conform to the definition set forth by the Board of Governors of the Federal Reserve System, in accordance with Title XI of FIRREA. The report should clearly and accurately disclose all assumptions, extraordinary assumptions, hypothetical conditions, and limiting conditions used in the assignment.

CONTRACT TERMS AND AGREEMENTReport Type: Appraisal ReportReport Format: Narrative

Disclaimer Language Insert: You are to insert the following disclaimer language within a text box near your value conclusions in the letter of transmittal and summary of salient facts and conclusions (executive summary): The report is intended for the use of Zions First National Bank and its designees. No copying or distribution of any part of this report is authorized without the Bank's written consent. Bank makes no representation as to the accuracy of any information or conclusion in the report.

Report Delivery Instructions

RIMS Delivery Instructions: Please upload an electronic (PDF) copy of your appraisal report and Appraisal Invoice to the Zions First National Bank RIMS Site at www.rimscentral.com. If a DCF is utilized in the appraisal please upload the Argus File or applicable worksheet file to RIMS. The appraisal invoice must be uploaded as a separate document. Once the completed appraisal has been delivered, it will be reviewed by Zions First National Bank Appraisal Department staff or an outside fee appraiser hired to complete the review. Any and all changes to the appraisal must be completed within THREE (3) business days of notification of appraisal concerns by the review appraiser, unless other arrangements have been arranged. The below noted


penalty clause also applies to the completion of any changes and delivery of the final appraisal report.

VENDOR FIDUCIARY DUTY AND CONFIDENTIALITY RESPONSIBILITYZions First National Bank believes that the privacy and security of our customer's personal information is of the utmost importance. It is also the law. As an unaffiliated third party, we rely on you to help us protect our customer's financial privacy, pursuant to the Sensitive Information Agreement ("SIA") you previously signed with Zions First National Bank. The SIA shall continue to control all privacy matters.

As set forth in that SIA, under current federal law and other laws, including the Gramm-Leach-Bliley Act of 1999, information we provide to you about a borrower or applicant must be handled in a confidential manner. You agree to keep all information we supply you about a borrower or applicant hereunder confidential. You agree not to supply it to third parties without our consent. You agree to take reasonable steps to safeguard all such information and any records, documents, or electronic media or systems that contain it. You agree to use any such information only for the specific purpose and services you are hired to perform hereunder

You agree to notify Zions First National Bank immediately if any confidential information is improperly disclosed or lost by you or those working for you, and to cooperate with Zions First National Bank in investigating such disclosure or loss. Unless otherwise instructed, only the undersigned is entitled to receive the appraisal report. You agree to dispose of any records, documents or electronic media that contain borrower or applicant information in a secure manner (shredding, etc). You will destroy any such records, documents or electronic media on our request unless required to maintain it for your own business purposes or requirements. You will permit us on reasonable notice to review your security procedures, including a visit to your offices.

Only the Zions First National Bank Appraisal Department is entitled to receive the appraisal report or information. Unless approved by Zions First National Bank, do not provide the borrower, loan applicant, property owner, account officer, or any other person with a preliminary or completed appraisal report, or information about the appraisal, or the fact that an appraisal has been ordered.

Referenced Documents (See RIMS Central Reference Documents): Appraisal Standards - Commercial Properties; Insurable Value Worksheet; Commercial Property Screen Form (Hazardous Material Site Observation Report)

Acceptance of Terms

This Appraisal Engagement Contract ("Contract") is between Zions First National Bank (Hereafter known as "Bank", "Us" or "We") and (Appraiser) hereafter known as "You"). Please include a signed copy of this Contract as an addendum to the completed appraisal report. By signing this, you acknowledge that you have read and agreed to the general and special requirements. In addition, you affirm that you are unbiased and


Jess Payne, SRA, CGAJess Payne, SRA, CGA

Phone: (208) 454-2991

Fax: (208) 459-1273

E-Mail: [email protected]

Web Site: www.jesspayneappraisalservice.com

Jess Payne Appraisal ServiceJess Payne Appraisal Service Certified General Appraiser #CGA-108

53. N. Plummer Road, Star, Idaho 83669

General Education & Designations

Bachelor of Science Degree from Walla Walla College, College Place, WA, June 1978

Graduate work for Masters Degree on a scholarship in 1978, Walla Walla College

Appraisal Institute SRA member

Certified General Certification through State of Idaho and Oregon

Appraiser Affiliate of Appraisal Institute

Associate Member of The American Society of Farm Managers and Rural Appraisers

Appraisal Education

(Prior 5 Years Only) Online Thinking Outside the Form, 05/29/2017

USPAP 2016-2017, 05/13/2017

Reviewing Residential Appraisals and Using Fannie Mae Form 2000, 04/30/2017

Online Cool Tools: New Technology for Real Estate Appraisers, 04/28/2017

Online Business Practices and Ethics, 04/26/2017

Heating, Ventilation and Air Conditioning Systems and Green Buildings, 6/12/2015

Online Business Practices & Ethics, 6/11/2015

Online Data Verification Methods, 6/11/2015

7 Hour National USPAP Equivalent Course, 5/21/2015

Improving Appraisal Reports Used for Financing Institutions, 4/1/2015

General Market Analysis, 2/27/2015

ASFRMA Best in Business Ethics for New Members, 2/19/2015

Right of Way—Three Case Studies with Two Approaches to Value, 10/22/2014

Regression Modeling: Why Bad Results Happen to Good Appraiser, 10/1/2014

The Valuation of Bank Branches, 9/17/2014

Fundamentals of Going Concerns, 7/16/2014

Online Advanced Internet Search Strategies, 5/2014

Trial Components, 2014

Advanced Internet Search Strategies, 2014

Golf Course Property Valuation, 2014

USPAP, 2012-2013

American Society of Farm Managers and Rural Appraisers Course -

Highest & Best Use and Appraising Ag Land in Transition, 2012

Fundamentals of Separating Real, Personal Property, and Intangible Business Assets, 2012

USPAP, 2011

*A more comprehensive list can be provided upon request.

Professional Organizations

Member of the Appraisal Institute, SRA designation

Former Member of the Caldwell Chamber of Commerce

Former Member of the Business Advisory Committee (National)

Former AI Chapter Secretary and Education Chairman

Associate Member of The American Society of Farm Managers and Rural Appraisers

Practical Experience

President and Partner of J&J Development, Inc (Real Estate investment and development

company)

Owner/Operator of Jess Payne Appraisal Service, January 1990 to present.

Independent Fee Appraiser with T. Skinner Enterprises, July 1986 through January 1990.

Independent Fee Appraiser 1984 through July 1986, Los Angeles, California

Bank Loan Consultant 1983 through 1985, Wells Fargo Bank, El Monte, California.

Real Estate and Business Sales (Sales, Management and Ownership), 1980 through 1983,

Scottsdale, Arizona

Independent Fee Appraising Consists of the Following Divisions:

Commercial ~Jess Payne & J.T. More Residential ~Shirl Bobst Transitional Land Issues Single Family (all types and prices)

Office and Retail 2-4 Multi family

Industrial New Construction

Subdivisions Residential Acreage

Apartments Townhouses/PUD’s

Litigation

Farm/Ranch

*Commercial and Residential Appraisers are on Staff

Business References:

Tom Dobbin, Chief Appraiser

Farm Service Agency, (Nationally)

9173 West Barnes Drive, Suite B

Boise, ID 83709

(208) 378-5664

Frank Clawson, Manager

Zions First National Bank

One South Main St.

8th Floor

Salt Lake City, UT 84133

(801) 844-7336

Susan R Smith, Farm Loan Specialist

Farm Service Agency

9173 W Barnes Dr., Suite B

Boise, Idaho 83709

(208) 378-5664

Michael Munson, VP Appraisal Manager

Columbia Bank

1301 A Street, Suite 700

PO Box 2156

Tacoma, WA 98401

(253) 305-0615

John Ingle, Senior Review Appraiser

US Bank

111 SW 5th Ave, Suite 580

Portland, OR 97204

(503) 275-6652

Robert Quinton, VP Commercial Loan Officer

Bank of Eastern Oregon

PO Box 10

John Day, OR 97845

(541) 575-1862

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