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SEVERANCE DAMAGES TO THE REMAINDER Severance damage (reduction of market value to the remainder) was considered by the appraiser. Access Changes The proposed project includes the closure of Oxford Avenue NW, which is the subject's street, between TH 10 to the north and 5th Street NW to the south. Due to the closure of Oxford Avenue, the subject's proposed acquisition includes the installation of a new driveway that provides the subject access to 5th Street NW that borders the subject to the south. The new driveway will utilize the Oxford Avenue right of way and will tie into the subject's existing driveway. The proposed driveway to 5th Street NW will provide reasonably convenient and suitable access to the subject property and would have no negative severance damage to the subject's remainder. Garage Severance The alignment of the new driveway will be altered to reflect the boundaries of the existing highway right of way. The existing driveway encroaches onto the highway right of way to provide a direct east/west alignment to Oxford Avenue and the subject's garage. The proposed driveway will have a west-northwest/east-southeast alignment in the after condition. Due to the changes in the driveway alignment that will no longer have the same orientation as the subject's garage, access to the garage is anticipated to be diminished to the point it will no longer be accessible by vehicle. However, the current condition of the garage is extremely poor and has impacted the utility and function of the garage such that it is no longer viable to be used for vehicular storage. This is supported by the appraiser's observations at the time of inspection that indicated the tenant was not using the garage for vehicle parking. The garage offers minimal contributory value to the subject property based on its current condition. Furthermore, the garage is encroaching across existing highway right of way, which eliminates the ability to construct a new garage in the same location. There would not be adequate space to build a new garage in a similar location north of the home within the site boundaries and be compliant with setbacks. Furthermore, repairing the existing garage is not believed to be feasible given the extreme level of deferred maintenance and apparent damage to the integrity of the structure. The appraiser has concluded the only remaining utility of the structure would be for ancillary storage uses, which do not require a specific driveway alignment for access. Due to the poor condition of the structure, which includes large holes in the roof, storage uses are significantly limited as well. The appraiser has concluded that there are no severance damages to the subject's garage structure due to the acquisition of Parcel 229C. Rental Severance The length of the subject's driveway will increase significantly, from an existing length of approximately 50 feet, to a proposed total length of approximately 190 feet, which includes the turnaround area. The property is currently being utilized as a single family rental property. This use is common in the market area and based on reported rental market conditions, appears to be a viable and financially feasible use of the property. The proposed change in driveway length is anticipated to result in an increase in maintenance costs to the property owner (landlord), including snow plowing and other maintenance. These maintenance costs are typically passed on to the tenant based on lease terms in the market area for single family properties. The appraiser has interviewed local market participants as well as other property managers/landlords familiar with single family rentals to determine the appropriate rental impacts, if any, to the subject property based on the proposed driveway changes. Three market participants were interviewed including a local realtor/property manager from Elk River that has extensive experience in the single family rental market. Two additional property manager/landlords with single family rental experience were also interviewed to provide an adequate sampling of data. The property managers suggested that the significant increase in driveway length would likely result in increased maintenance expenses for the rental property. These expenses are often passed onto the tenant; however, rental rates are directly tied to the pass through maintenance costs, which would tend to have a negative effect on the achievable rental rate for the property. S.P. 7102-135RW C.S. 7102 (10=3) 902 Parcel 7102-902-229C Page 45