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HIGHEST & BEST USE <br /> Highest and best use as defined in The Appraisal of Real Estate, 13th Edition, by the <br /> Appraisal Institute is: "The reasonably probable and legal use of vacant land or an improved <br /> property, that is physically possible, legally permissible, appropriately supported, financially <br /> feasible, and that results in the highest value." Highest and best use is analyzed in two ways, <br /> site as vacant and site as improved. Since the subject is vacant land, only the site as vacant <br /> is analyzed. <br /> Typically there are four criteria in highest and best use analysis: <br /> - Legally permissible use: What uses are allowed by zoning? <br /> - Physically possible use: What uses are physically possible on the site? <br /> - Financially feasible use: Which possible & permissible uses produce a positive return? <br /> - Maximally productive use: Of the financially feasible uses, which use produces the <br /> highest return warranted by the market (the ideal improvements)? <br /> Site as Vacant: "Among all reasonable, alternative uses, the use that yields the highest <br /> present land value, after payments are made for labor, capital and coordination. The use of a <br /> property based on the assumption that the parcel of land is vacant or can be made vacant by <br /> demolishing any improvements."The Dictionary of Real Estate Appraisal 5'h Edition <br /> Parcel 1 <br /> Legally Permissible Uses: The current C-3, Highway Commercial, zoning allows for a <br /> variety of commercial uses including retail, office, service and restaurants. The land use plan <br /> is similar. Minimum site size is 43,560 SF. <br /> Physically Possible Uses: The physical characteristics of the site are not suitable for <br /> development on a standalone basis. The site is landlocked, but has above average <br /> visibility/exposure due to US Highway 10. Given the subject characteristics, it would be <br /> logical to assemble the site with the adjoining parcels to the south. <br /> Financially Feasible Uses: Surrounding uses, market demand and the availability of <br /> financing typically drive financial feasibility. <br /> • Surrounding Uses: The subject is located in a small commercial district that is situated at <br /> the intersection of US Highway 10 and Joplin Street. Surrounding uses include <br /> commercial to the east and west, multi-family residential to the north and county <br /> fairgrounds to the south. The subject has good visibility from US Highway 10. Given the <br /> subject's surroundings and highway exposure, a commercial use would be logical. <br /> Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 31 <br />