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11 <br /> 11 <br /> Preliminary drawings have been made for 11 and 13 lots and <br /> • are included in the addendum of this report. With the exception <br />!eof one front site that would be about 1.4 acres, minimum lot <br /> sizes would be about 1.86 acres. If preliminary drawings <br /> cannot be reworked to make the one 1.4 acre site 1.5 acres, it <br /> is possible that a variance may be needed to develop the one <br /> II smallest site. The problem is not considered to be significant <br /> because the site is large enough to accommodate various lot <br /> configurations with varying sizes. <br /> IIProbable Sale Price of Platted Lots: Included earlier in this <br /> Ireport is a list of recent sales of vacant industrial platted <br /> lots in the City of Elk River. Each sale has been analyzed <br /> II relative to the subject site. Based on past selling prices of <br /> industrial lots and the weighted analysis herein it is <br /> reasonable to conclude that an average price for an average <br /> 11 size lot of 2 . 14 acres in the proposed subject Business Park <br /> would be $83,897 . This price was arrived at after careful <br /> consideration and analysis of recent industrial sales in the <br /> ii City of Elk River. In the following cash flow chart 3% per year <br /> 41 <br /> inflation has been added to each years gross sales. <br /> The average lot size of 2 . 14 acres was arrived at by dividing <br /> 11 27.82 acres by 13 sites. Information provided by the City of <br /> Elk River estimate roadways to need 6. 18 acres leaving 27.82 <br /> acres as salable acreage. <br /> il <br /> 7 <br /> 411 Expenses: There is access to the subject site from Orono <br /> Parkway, however, access roads and interior roads to service <br /> the Business Park will need to be built. The Business Park <br /> will also be fully serviced with city services. The cost of <br /> these improvements have been supplied to us from the City of <br /> Elk River and are included in the addendum of this report. <br /> Additional expenses will include: selling expenses, estimated <br /> to be 5% of gross sales; legal, accounting, and advertising <br /> II expenses estimated to be $1,000 per year; real estate taxes <br /> based on today's taxes and estimated tax from other fully <br /> serviced industrial parks in Elk River; and developer's profit <br /> estimated to be 15%. <br /> Absorption time: To determine five years as the absorption <br /> I time for the projected Business Park we analyzed seven <br /> industrial and commercial parks in Elk River. The parks were <br /> 11 platted from 1972 to 1993 ; three have full city services, four <br /> have private well and septic. 43 or 55% of the 78 total lots <br /> have been sold. Of the total inventory of 78 lots, 35 have <br /> city services. Of the 35 lots available for sale, 8 have city <br /> services. We now know that 77% of the lots with city services <br /> have been sold and only 8 with city services are available as <br /> 11 of this date. <br /> Further, per a conversation with the developer of Meadowvale, a <br /> small commercial park with city services, we know that after <br /> • services were available the park sold out in less then a year. <br /> 28 <br />