DRAFT .' . . .. APPRAISAL REPORT CONSERVATION AND PRESERVATION EASEMENT Mar-a-Lago 1100 South Ocean Boulevard Palm Beach, Florida Prepared for Mr. Donald J. Trump 725 Fifth A venue New York, NY 10022 Taxpayer Identification Number: 230-50-5640 '•. Fa ir Market Value as o f April 6, 1995 Subm iss ion Date August 1, 1996 fu Clarion Associates, Inc . 75 East Wacker Drive, Suite 1600 Chicago, IL 60601 Copyright ~ 1996 by Clarion Associates, Inc. An Illinois Corporation I August 1, 1996 Mr. Donald J. Trump 725 Fifth A venue New York, NY 10022 DRAFT Dear Mr. Trump: W e arc pl eased to submit lhe attached appraisal report concerning the fa ir market value of the pre. ervation and conservation easement donated on M ar-a-Lago , 1100 South Ocean Boulevard , Palm Beac h, Florida , as of April 6, J 995, lhe effective date of tbe appraisal. The date of the report is April 12, 1996. The purpose of this appraisal is to estimate for federal income tax purposes the fair market value of the gift of the preservation and conservation easement. When there are no sales of similar easement-encumbered parcels, this requires comparison of the fair market value of the property prior to donation of the easement and the fair market value of it after donation of the easement as well as considera lion of any orfse tting increase in other property owned by the donor. The difference is the value of the easement. This is a qualified appraisal report under the meaning of the Income Tax Regulations and was prepared for your use in connection with the donation. No part of the fee is based ·on a percentage of the appraised value of the property. This report has been researched and written in conformity with the requirements of the Code of Professional Ethics of the Appraisal Institute and the Uniform Standards of Professional Appra isal Prac ti ce of the Appraisal Foundation. The report is subject to a statement of assum ptions and limiting conditions which follows the certification of value . N either the Cl arion Associates, Inc. name nor the material submitted in the report may be included in any prospectus or used in offerings or representations in connection with the sale of real estate, securities, or participation interests to the public, without our written consent. The report, of which this letter is a part, describes in detail the site and methods of appraisal, and conLa ins the pertinent data considered in reaching our value conclusions. As stated in the atcached complete, self-contained appraisal report, our estimate of the fair market value of the preservation and conservation easement as of April 6, 1995 is $5, 750,000 . Transmittal Letter to Mr. Trump August 1, 1996 Page 2 This letter of transmittal must remain attached to the report for this value opinion to be considered valid. Sincerely yours, CLARION ASSOCIATES, INC. by Cheryl A. Inghram, MAI SUMJVJARY OF SIGNIFICANT FACTS AND CONCLUSIONS Property Appraised: Mar-a-Lago, 1100 South Ocean Boulevard, Palm Beach, Florida. Report Date: August 1, 1996 Effective Date of Appraisal: April 6, 1995 Purpose and Intended Use of Appraisal: DRAFT To serve as a qualified appraisal for federal income tax purposes, estimating the fair market value of the property prior to donation of a preservation and conservation easement as of April 6, 1995 and after donation of a preservation and conservation easement on April 6, 1995. Total Site Area: 17.49 acres Area of Easement: 17.49 acres Zoning : R-AA, Large Estate Residential (16.38-acre portion); and R-A, Estate Residential. Dates of Inspection: On three occasions in 1990 and 1991 as well as on August 30, September 1, and September 2, 1995 Permanent Index Nos. : 50-43-43-35-00-002-0390 Conclusions Highest and Best Use Before Conservation Easement: Highest and Best Use After Conservation Easement: Single-family residence; selective removal and sale of interior decorative elements; and subdivision and development of eight additional residences. One single-family residence; protected open space; and subdivision and development of six additional residences. Value Before Conservation Easement: $25 '000' 000 Estimate of Exposure Time: Three and one-half to five years . f Conservation Value Ater Easement: $19,250,000 . Estimate of Exposure T'une·. Four and one-half to seven years. Offsetting Beneft 1 to • Adjacent Property. NIA Value of the Easement: $5,750,000 PHOTOGRAPHS View 0 ar?a-Lago from East View of Mar-a-Lago from West PHOTOGRAPHS View of ?Jim?s House? North View of ?Frank?s House? South PHOTOGRAPHS View of Dormitory the East TABLE OF CONTENTS . . . .. . . . . . . . . . . . . 1 Certificate of Value Assumptions and Limiting Conditions ··DR,· :::..~fl 3 Purpose and Intended Use of the Appraisal Scope of the Assignment Definition of Value 6 Property Rights Appraised 7 Identification of the Property .. . 7 Legal Description 8 Encumbrances 8 . . Sales History of Property 9 Area and Neighborhood Description 9 Site Description . . . . . . . . . . . . Real Estate Taxes and Assessment 18 19 . ··-20 Zoning and Subdivision Description of the Improvements 20 Condition and Functional Qualities 21 The Conservation Easement 22 Highest and Best Use 23 Valuation Appraisal Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 26 26 Valuation Prior to Considering the Easement Cost Approach . . . . . . . Sales Comparison Approach . . . . . . . .. 32 Value Conclusion Prior to Considering the Conservation Easement . . .. .. ... . ... .. . . . Valuation After Considering the Easement Value Conclusion After Considering the Conservation Easement . . . . . . . . . Easement Value Conclusion Statement of Qualifications EXHIBITS Area Map . . . . . Neighborhood Map Plat of Survey Zoning Map Summary Table of Comparable Sales and Listings 45 Fo ll owin g page 9 16 18 20 32 ADDENDA ··, Conservation Easement Declaration of Use Agreement 1 CERTIFICATE OF VALUE WE HEREBY CERTIFY that to the best of our knowledge and belief the following is true ~ and accurate: that we have no present or contemplated future interest in the real estate that is the subject of this appraisal report; ~ that we have no personal interest or bias with respect to the subject report or the parties involved; m~~~ -. ap · isal //A rt"',? that the fee for this assignment is not contingent upon the reporting of a predeterm value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event; a d that no portion of the fee arrangement is based on a percentage of the property's appraised value; that to the best of our knowledge and belief, the statements of fact contained in this appraisal report, upon which the analyses, opinions and conclusions expressed herein are ' based, are true and correct; that this appraisal report sets forth all of the limiting conditions (imposed by the terms of our assignment or by the undersigned) affecting the analyses, opinions and conclusions contained in this report; that our analysis, opinions and conclusions have been developed and that this appraisal . report has been made in conformity with and is subject to the requirements of the Code of Professional Ethics of the Appraisal Institute and the Uniform Standards of Professional · Appraisal Practice of the Appraisal Foundation; that the use of this report is subject to the requirements of the Appraisal Institute including possible review by its duly authorized representatives; that no one other than the undersigned and those acknowledged below prepared the analyses, conclusions and opinions concerning the real estate that are set forth in this appraisal report. Mary Lou Nicholas and Nicholas M. Revill provided significant professional assistance in analyzing the interior decorative elements of the property. Reliance is placed on their work; moreover, the appraiser has thoroughly reviewed their · work. Cheryl A. Inghram inspected the property; · that the Appraisal Institute conducts a continuing education program for its members. As of the date of this report, Cheryl A. Inghram, MAI, has completed requirements of the continuing education program of the Appraisal Institute; 1 3 IN OUR OPINION, the fair market value of the fee simple interest in Mar-a-Lago 1100 South Ocean Boulevard Palm Beach, Florida /1 ~ . '( . A~ ~J ....,~ prio~· to considerin~ the preservation a.nd conser~ati.0:1 easeme~~ described herein, as o . / April 6, 1995, subject to the Assumpt10ns and L1m1tmg Cond1t1ons stated on the followmg · pages, was TWENTY-FIVE MILLION DOLLARS ($25,000,000) IN OUR OPINION, the fair market value of the fee simple interest in the subject property after considerinl! the preservation and conservation easement described herein, as of April • 6, 1995, subject to the Assumptions and Limiting Conditions stated on the following pages; was NlNETEEN M fLLION TWO HUNDRED FIFTY THOUSAND DOLLARS ($19,250,000) IN OUR OPINION, the fair market value of the preservation and conservation easement described herein imposed on the subject property, as of April 6, 1995, subject to the Assumptions and Limiting Conditions stated on the following pages, was FIVE MILLION SEVEN HUNDRED FIFTY THOUSAND DOLLARS ($5, 750,000) Respectfully submitted, CLARION ASSOCIATES, INC. Cheryl A. Inghram, MAI Illinois Certified General Real Estate Appraiser # 153-000569 Tax Identification Number: 329-48-2693 Clarion Associates, Inc. Taxpayer Identification Number: 36-3595037 Submission Date: August 1, 1996 4 This opinion is expressly subject to the following assumptions and limiting conditions: ~~ 1. No responsibility is assumed for matters of a legal nature. It is assumed that title to the property is marketable and the legal description furnished us is correct. The legal description provided herein should be verified by competent legal counsel. 2. The property is treated as though under responsible ownership and competent and efficient management, and free and clear of all liens and encumbrances except as specifically provided herein. 3. The described physical condition of any improvements is based on visual inspection only. It is assumed Lhat there are no hidden or unapparent physical conditions · affecting value. No liability is assumed for the soundness of structural members, equipment or soil conditions, since no engineering tests were made . 4. Improvements, if any, are considered to be within lot lines and in accordance with local zoning and building ordinances as well as all applicable federal, state and local environmental laws and regulations, except as noted herein. Any plats, diagrams or drawings provided are intended solely to facilitate understanding and aid the reader in picturing the property, and are not meant to be used as references in matters of survey, as no survey was made, and no liability is assumed regarding questions of survey. 5. It is assumed that all required private, federal, state, or local licenses, certificates. of occupancy, consents, or other legislative or administrative permissions required have been or can be readily obtained or renewed for any use on which the value estimate in this report is based. 6. Any information received from others is believed to be reliable; however, no warranty is given for its accuracy. 7. The authors will not be required to give further consultation or testimony, or appear in court, by reason of this report with reference to the property described unless previous arrangements have been made to that effect. 8. Disclosure of the contents of this report is governed by the By-Laws and Regulations of the Appraisal Institute and the American Society of Real Estate Counselors. Possession of this report, or a copy thereof, or any part thereof, does not carry with it the right of publication, nor may it be used by anyone but the party for whom it has been prepared without the previous written consent of the / 5 (2 . . appraisers, and in any event only with proper written qualification and entirety. o~/'· >I f;' § ·>t• • 9. Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraiser, or the firm with which the appraiser is connected) will be disseminated to the public through advertising, public relations, • news, sales, or other media without the prior written consent and appro':al of the appraiser. 10. Any value estimates stated herein are based on the purchasing power of the dollar as of the date of this report, except as otherwise specified. 11. This report is intended to be read and used as a whole and not in parts. Separation of any section or page from the main body of the report is expressly forbidden and . will be considered as invalidating the report. 12. Where the property being considered is part of a larger parcel or tract, any values reported relate only to the portion being considered and should not be construed as applying with equal validity to other portions of the larger parcel or tract. Any allocation of value in this report between land and improvements applies only to this report, and must not be used as part of any other appraisal and is invalid if so used. The value reported for any portion appraised plus the value of all other portions may or may not equal the value of the entire parcel or tract considered as an entity. 13 . Any projections of future rents, expenses, net operating income, mortgage debt service, capital outlays, cash flow, inflation, capitalization rates, interest rates or discount rates are intended solely for analytical purposes and are not to be construed as predictions or as representing the thinking of the authors of this report or this office. To the extent that they are used in estimating the value of an interest or interests in real property, they represent only our judgment of the assumptions likely to be used by purchasers and sellers active in the marketplace. We can neither guarantee the accuracy of these judgments and projections nor accept any responsibility for their accuracy. 14. No responsibility is assumed for the accuracy of any descriptions of physical materials and conditions pertaining to the property, or for any damages sustained in connection with actual or potential deficiencies or hazards such as, but not limited to, inadequacies or defects in the structure, design, mechanical equipment or utility services associated with the improvements; air or water pollution; noise; flooding, ·. storms or wind; traffic and other neighborhood hazards; radon gas, asbestos, natural or artificial radiation, or toxic substances of any description, whether on or off the premises . 6 15. The professional fees paid for preparing the appraisal report were not base m whole or in part on the amount of the appraised value of the property, but ra upon a fixed price plus expenses or hourly reimbursement basis. /A Y' 16. The authors have made inquiries to determine if there are any restrictions upon the. use, sale or disposition of the property, and all such restrictions found are described in the appraisal. 17. This report assumes that the donation of an easement on the property qualifies as a· charitable contribution for conservation purposes in accordance with the Internal Revenue Code . / ~ 7 PURPOSE AND INTENDED USE OF THE APPRAISAL The purpose of the appraisal is to estimate for federal income tax purposes the fair market value of the subject property, considered as a whole, before considering a preservation and conservation easement imposed as of April 6, 1995, and after considering the easement imposed as of April 6, 1995. The difference in value is the value of the preservation and : conservation easement imposed on the property as of April 6, 1995. This is a qualified appraisal according to the meaning of the Income Tax Regulations. The property is assumed to be free and clear of all liens, special assessments, and other encumbrances not specifically provided for in this report. ~ SCOPE OF THE ASSIGNMENT The appraisal assignment began with an inspection of the property and review of building ·. and site plans. We analyzed existing land use regulations, neighborhood trends, anticipated public or private improvements in the vicinity, market demand for single-family homes, the physical characteristics of the property and its highest and best use. We inspected comparable sales from the exterior and interviewed local real estate brokers extensively. We reviewed the conservation easement, and then undertook the cost, sales comparison, and income approaches to value. The assignment began in August 1995 and was completed in August of 1996. ·-. DEFINITION OF VALUE Section 1.170-l(c) of the U.S. Income Tax Regulations defines fair market value as follows: The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts. This definition is consistent with the Tenth Edition, 1992, of The Appraisa l of Real Estate, published by the Appraisal Institute, which defines market value by reference to the Dictionary of Renl Esrare Appraisal as follows: 8 The most probable price, as of a specified date, in cash, or in terms e ivalent to cash, or in other precisely revealed terms, for which the specified p pe y rights ~ans should sell after reasonable exposure in a competitive market und all requisite to fair sale, with the buyer and seller each acting prudent , ~~-;JI knowledgeably, and for self interest, and assuming that neither is und d duress. ~ ~ /A 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: / a. buyer and seller are typically motivated; b. both parties are well informed or well advised, and each acting in what he considers his own best interest; c. a reasonable time is allowed for exposure in the open market; d. payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and e. 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 estimate of the market value of the subject property is expressed in terms of cash. ··. PROPERTY RIGHTS APPRAISED The real estate appraised both before and after considering the preservation and conservation easement is a fee simple interest in the land subject only to such leases and encumbrances as may be specifically provided for herein. Fixtures and equipment ordinarily considered part of the real estate such as heating and air conditioning systems, electrical systems, general lighting, and domestic plumbing are included. lDENTTFICATION OF THE PROPERTY 9 square-foot Mediterranean-style villa, sprawled around a 75-foot tower. It occupies a 16.38-acre site located between Lake Worth and South Ocean Boulevard, with an additional · 39,000-40,000 square-foot oceanfront lot, immedately east of South Ocean Boulevard. Also, adjacent to the property to the north, there is a vacant, 8,250 square-foot parcel. The main part of the house has approximately 30,410 square feet of gross living area, not including the basement, and a total area of approximately 37,320 square feet of-covered area (including covered \va!kways, loggias, etc.). The service wing has a gross aboveground enclosed area of approximate ly 12,920 square feet, and a total area of npproximate!y 14,450 square feet of covered area. The main part of the mansion has 33 principal rooms, inclutling 13-1G bedrooms, 14 full and five half-bathrooms. The site is also improved with numerous outbuildings, including two separate small residences, which are typical for an estate of this size. The site is extensively landscaped: and has a nine-hole "pitch and putt" golf course at the west end, as well as a tennis comi and outdoor swimming pool. Mar-a-Lago was created between 1923 and 1927 by Marjorie Merriweather Post and E.F; · Hutton, whose other contributions to local and national life are well known. Mar-a-Lago's architects were Joseph Urban of New York and Marion Sims Wyeth of Palm Beach, both designers of acknowledged importance and quality. The significance of the estate is widely recognized in publications and in its various landmark and historic site designations. In June 1928 the periodical American Architect devoted 12 pages to the recently completed estate. Since then, the house has been widely· • published in books about American, regional and local architecture and has been featured on the television program, "America's Castles." In 1967-72, the Historic American · Buildings Survey documented the estate with 36 pages of text and 111 photographs. The Town of Palm Beach designated Mar-a-Lago as a local landmark on July 11, 1979. Finally, the property was designated a National Historic Landmark on December 30, 1980. National Historic Landmark (NHL) status is reserved for sites of pre-eminent national significance, and NHLs are automatically listed in the National Register of Historic Places. Finally, on April 6, 1995, the National Trust for Historic Preservation accepted a preservation and conservation easement on the property. It has been the longstanding policy of the National Trust to accept easements only on the most significant of national . historic resources. By any well known and objective criteria, Mar-a-Lago, buildings and grounds, qualifies as an important local, regional and national landmark. LEGAL DESCRIPTION - - - -- - - ·r r 10 The legal description for the property is provided in the Addenda. ENCUMBRANCES We have reviewed a title report and deed documentation for the property. There are normal easements for utilities and public roads, none of which affect the property's marketability or developmenl potential. The parcel benefits from an access easement via a tunnel and across adjacent property to the oceanfront lot. According to deed documents, no more than two residences can be constructed on the oceanfront lot. SALES HISTORY OF PROPERTY There have been no sales of the property in the three years prior to valu ation ... The owner, Donald J. Trump, purchased the 16.38-acre portion of the prnperty in December 1985 from the Ma1jorie Merriweather Post Foundation for $8 ,000,000, including furnishings and decorative arts objects estirnMed at $3,000,000. Mrs. Post had owned the property from the 1920s u nti I ber death in 1973, when she willed it to the U.S. government as a retreat . for visiting forei gn dignitaries or a presidential retreat. T11e federal government deemed it too difficult to secu re and returned to the Post Foundation. At the time of purchase by Mr. Trump, the house had been vacant and essentially unoccupied for approximately 12 year~. Subsequent to purchasing the 16.38-acre portion of the property, Mr. Trnmp purchased the oceanfront lot for a reported $2,000 ,000. [Paul: I need lo know the terms and date of Mr. Trump's purchase of the Woodbridge Roac..l property.] AREA AND NEIGITllORIIOOD DESCRIPTION The subject property is located in Palm Beach, Palm Beach County, Florida. Palm Beach County, on the east coast of south Florida, developed as a result of oil, railroad, and real estate entrepreneur Henry Flagler's obsession to transform the swampy 11 and mosquito-infested island of Palm Beach into a tropical resort paradise. l)~ i . Practica~~)._ single-handedly spearheading the development of the east coast of south Florida, he extended the Florida East Coast railway from Jacksonville to Key West, in the process establishing St. Augustine, Daytona, Palm Beach, and Miami as destination resorts. / In Palm Beach, Flagler built the Royal Poinciana (1894) and the Palm Beach Inn (1897) hotels. The Morgans, the Wanamakers, the Astors, and Vanderbilts, the Woolworths and the Kennedys, among others, came for the winter season. In 1901, he built his residence, Whitehall, now the Flagler Museum. It was constructed at a cost of $2.5 million and furnished at a cost of $1.5 million. While developing Palm Beach, Flagler built a workers' community across Lake Worth, in : West Palm Beach, and it became established as a commercial center. Today, West Palm : Beach is a vibrant center for banking, development, and government and is the seat of government for Palm Beach County. After experiencing substantial growth during the past · decade, West Palm Beach is expected to be one of the fastest-growing MSAs in the nation through the remainder of the 1990s. During the 1980s, Palm Beach County was one of the nation's fastest-growing major metropolitan areas, as employment, income, retail sales, and other economic in.dicators reached record highs. The population increased by nearly 290, 000, or nearly 50 % . The · economy added jobs at a rapid rate. Palm Beach County has an estimated 1995 population of 962,802 people, an increase of nearly 12 % over 1990. The county estimates that its winter population increases by 10 % ' countywide, as snowbirds flock to Florida seeking relief from northern winters. The county estimates that the Town of Palm Beach experiences a 32 % population increase in. : season. According to Department of Labor figures, employment in Palm Beach County increased · 3.5% between September 1994 and September 1995, which translated into 13,300 new jobs. Unemployment, however, remains relatively high. Employment for 1994 ran 8.5%', and as of September 1995 it was estimated at 7. 8 %, in comparison to the national average of 5. 7 % for the same month. Job gains were led by the service sector (6,600 jobs) and retail (2,900). Major corporate headquarters located in Palm Beach County include W.R. Grace & Company (Boca Raton), Office Depot (Delray Beach), Levitz Furniture (Boca Raton), and the Scott Paper Company, which recently relocated its headquarters to Boca from Philadelphia. In 1995 the broadcasting company Paxson Communications relocated its headquarters from Clearwater to West Palm Beach. :, : 12 i';£ ~~ Tourism is an important industry in the county. It is estimated that in fiscal year 1 9 - w Palm Beach County attracted nearly 3.85 million visitors, generating nearly $1.9 billion fo r / the local economy. This helps to explain the large proportion of the labor force employed in the service sector--over 36% as compared to the national norm of 28%. The area's numerous golf courses are important tourism amenities (20 of the generally-recognized top 25 southeast Florida golf courses are located in Palm Beach County). Agriculture is also an important component in the County's economic picture. Of all the counties in the United States, Palm Beach County leads the nation in the production of sweet corn. .., Despite a reputation for relative affluence, Palm Beach County's household income is actually only slightly above the national nonn. According to Sales & Marketing Management's 1995 Survey of Buying Power, the local median household income is $38,200, as compared to $37, 100 for the nation. Palm Beach County is readily accessible by air. Palm Beach International Airport was recently remodelled. Passenger traffic increased 10% from 1993 to 1994, to 5.6 million, but fell slightly in 1995 . The airport is served by the major airlines, including U.S. Air, Delta, American Airlines, and United, as well as numerous regional airlines and private aircraft. The Town of Palm Beach, 14 miles long, 1/2 mile wide at its widest point, and 3.93 square miles in area, is located between Lake Worth and the Atlantic Ocean. The Town has a year-round population of 9, 856 but swells to approximately 13, 000 during the winter season . Palm Beach has a reputation as an exclusive--and expensive--island community. To the average visitor, it is not only the impressive size of the seasonal residences, it is the · prices to be found in the shops along famed Worth A \.'.enue that highlight the area's enormous wealth. Shops include Saks Fifth Avenue, Ralph Lauren, Chanel, Ungaro, Krizia, Cartier, Tiffany, Valentino, Pratesi Linens, and numerous high-end antique dealers. A few of the shops close and relocate to the north during Palm Beach's off season. Palm Beach is internationally known for its architectural landmarks designed in the "Palm Beach Style," and the popularizer of the style was the architect Addison Mizner. In 1919, he was commissioned to design El Mirasol for the Stotesbury's, which became the standard by which the great Palm Beach mansions were judged. Mizner completed approximately 45 homes shops and public buildings in Palm Beach from 1918 through 1931, including Via Mizner off of Worth Avenue, an exquisite shopping arcade he designed in 1925. Marion Sims Wyeth, who also had numerous impo11ant residential commissions in Palm Beach and who was selected by Mrs. Post as the original architect for Mar-a-Lago, arrived in town in 1919. Joseph Urban, the interior architect for Mar-a-Lago, and Maurice Fatio also conlributed a significant legacy to the Palm Beach architectural landscape. 1994, plans for Phipps Estates were unveiled. The development, currently underway d • 20-acre site, is planned for 32 homes, ranging in price from $2.5 to $3 .5 million on lo s of from 18,900 to 36,323 square feet. The 1995 Mobil Guide listed 1,816 hotel and motel rooms in Palm Beach, though that number will shrink slightly with the closing of the 134-room Brazilian Court and its conversion to elderly housing. Perhaps the largest and most well-known of the- area's hotels is the Breakers resort, a 567-room landmark facility with private beach and 36-hole golf course. Palm Beach also has numerous resta~rants. Palm Beach enjoys a rich cultural life. In addition to performances at the Henry Kravis Center for the Performing Arts in West Palm Beach, the Greater Palm Beach Symphony , perfo rms at the Royal Poinciana Playhouse. Exhibits, lectu re series and concerts are offered at the Society of the Four Arts in Palm Beach, and the Norton Gallery of Art in West Palm Beach exhibits both its own collecti ons and travelling exhibitions . Private clubs, many with golf courses, are an important feature of Palm Beach life and contribute to the community's characteristic exclusive air. They include the Everglades Club, the Bath and Tennis Club, the Sailfish Club, the Palm Beach Country Club, and the Poinciana Club, as well as Club Mar-a-Lago. SITE DESCRIPTTON Location: 1100 South Ocean Boulevard, Palm Beach. Area: Site of Main Residence: Approximately 16.38 acres total area, according to a site survey prepared May 17, 1995 by Lawson, Noble & Associates, Inc. Woodbridge Road Property : 8,250 s.f., according to the site survey. Oceanfront Lot: The site survey did not specify the area of this lot, but it is generally acknowledged to have 39,00040,000 s.f. (one "Palm Beach acre"). Area will vary due to the water frontage. Shape: Both the main and oceanfront sites are roughly rectangular. The Woodbridge Road property is "L"-shaped. 14 Dimensions: 600 feet north to south (see survey). Oceanfront Lot: roughly 150 feet east to west north to south (see survey). Topography and Floodplain: Soils and Vegetation: . ~nd 350 feet / The site slopes downward from the oceanfront toward the lake. The site is not subject to flooding, but some fill would be required for new construction at the west end of the property. No soil report was provided in connection with this assignn1ent. From our previous work with the property, we are aware that the main residence is anchored to a coral reef, and that the far west portion of the site (location of golf course) is landfill. We are also aware that more intensive development of the site is possible but that drainage will have. to be handled carefully, and certain potential building s\tes at . the west end may require some fill. We understand that the water table is not excessively high. Vegetation consists of native as well as exotic, cultivated species, including buttonwood, gumbo limbo, species of ficus, mastic and cabbage palms, Australian pines, and coconut palms. Shrubs include hibiscus, oleander, seagrape, and bougainvillea among many others. Utilities: All available at the site. Improvements: Extensive (please refer to Description of the Improvements). Access: Via South Ocean Boulevard (State Road AlA) (main entrance) and Southern Boulevard (service entrance). Adjacent Uses: Single-family residential and private club (Bath and Tennis Club). REAL ESTATE TAXES AND ASSESSMENT ~ "~ " ­ would have to be accompanied by a downward adjustment for diminishing functional utility. Therefore, no adjustment has been made. Sale Nos. 1 and 10 have been adjusted upward by $150 per square foot of gross living area plus 10% for soft costs up to the 11,000-square-foot norm. Extra Living Units: It is common in the Palm Beach market to have detached or semidetached guest quarters. On the 8.5-acre site needed to sustain Mar-a-Lago, there is a property manager's cottage that could be renovated as a guest house. Taking into account the condition of the cottage, we have made an upward adjustment of $250,000 to those comparable sales lacking this amenity. Conclusion of Sale: As of the effective date of appraisal, List 1 and List 2 reflected asking prices. We reviewed 27 sales of Palm Beach property, and, on average, sale prices are 15 % less than list prices. Accordingly the two listings have been adjusted downward by 15%. Development Potential: [To be provided once information is received from Town.] Our adjustments are shown in the grid on the following page. After adjustment, the range of values remains rather wide, from $5,761,875 to $15,972,000. Those houses that were not recently renovated (Sale Nos. 2, 6, and 8) and those houses that are significantly smaller than the Palm Beach norm (Sale Nos. 1 and 10) reflect the lowest range of values, required the largest adjustments on both a gross and net basis, and are considered the least comparable to Mar-a-Lago. The sales requiring the least adjustment, Sale Nos. 3, 5, 7, and 9, indicate a fairly tight range of values from $14,478,750 to $15,952,000. The adjusted price of List No. 2 further supports this range of values. Based on these considerations, we estimate the value of Mar-a-Lago on an 8.5-acre site to be $15,200,000. To this must be added the fair market value of the interior decorative elements and the value of the additional subclividable lots. Fair Market Value of Interior Decorative Elements Appended to this appraisal report is an appraisal prepared by Appraisers International, Inc. of the decorative elements that could be removed and sold from Mar-a-Lago prior to the gift of the easement. The total appraised value as of April 6, 1995 is $3,859,200. We have made some adjustments to this total. One item of personal property was inadvertently included (rug, #69A). Certain items cannot be feasibly removed (e.g. ceiling medallion, #85, stone balustrade, #189). Finally, certain items cannot be removed clue to Town landmark designation (e.g. french doors, #69, stone parrots, #194). After making these adjustments, the appraised value of the items totals $2,891,400. / MAR-A-LAGO ADJUSTMEN"T GRID Adjustment Items Sale Price Market Conditions(%} s Time Adjusted S:tlc ?rice Location (%) s Site Size(%) s Ocean Frontage(%} s Design and Appe:t! (%) s Age and Quality of Construction Condition(%) $ Room Count/GLA Functional Utility (%) s Extra Living Un.its Sale 2 Sale 1 $4,500,000 14% $623,250 S5,123,250 Sale 4 Sale3 $4,400,000 14% S600,000 S5,000,000 Sll,000,000 Sale5 S6,300,000 14% 13°/o Sale 6 Sl 1,600,000 13% Sl,500,000 $805,000 Sl,485,000 $12,500,000 S7,1Cl5,000 S13,085,000 Sale7 $4,400,000 12% $525,000 S·l,925,000 Salc9 Sale 8 $12,000,000 3% $400,000 S12,400,000 $4,900,000 O"k so $4,900,000 List 1 Sale 10 Sll,000,000 -3% (S275,000) Sl0,725,000 S3,500,000 List 2 S9,500,000 S13,000,000 -3% ($87,500) 0% 0% so so Sj,412,500 S9,500,000 Sl3,000,000 0% $0 0% 0% 0% 00/o 0% O"/o 0% so so so so so 0% $0 ()<'lo so 0% $0 O"/o so so so +20% Sl,024,650 +20% Sl,000,000 +15% Sl,S75,000 +15% Sl,065750 +So/o S654,250 +20% S985,000 + lOo/o Sl,240,000 +20% S9S0,000 +15% Sl,608,750 +20'\'o S682,500 +20% Sl,900,000 + 10o/o Sl,300,000 -5% ($256,163) 0% -5% (S625,000) 0% ·5% ($654,250) O"lo $0 0% $0 -5% ($245,000) -5% ($536,250) -5% (S170,625) -5% ($475,000) 0% +20o/o S!,024,650 +20% Sl,000,000 +1CJ% Sl,250,000 +10% S71Cl,500 +15% Sl,962,750 +15% S738750 +10% Sl,240,000 +20% $980,000 +20"/o $2,145,000 +20% $682,500 +10% $950,000 +15% Sl,950,000 0% 0% 0% 0% 00/o 0% 0% 0% O"/o 0% 00/o 00/o so so so so so so so so so so so so +5% S256,163 +20% Sl,000,000 0% 00/o so +5% S654,250 $985,000 0% +25% SO Sl,225,000 +5% $536,250 0% so so ()<'lo SO +10% Sl,300,000 S!,025,000 so $0 $0 $0 so $0 so so $905,000 so so 0% 0% 0% 00/o O"/o O"lo so so so so so 00/o $0 00/o so 0% $0 0% so 0% $0 00/o so so so so so $250,000 $250,000 $250,000 $250,000 so $250,000 $250,000 so 0% $0 0% 0% 00/o O"/o 0% 00/o O"/o 0% so so so so so so so so so $8,000,000 $15,000,000 $8,881,250 $15,952,000 $7,883,750 $15,130,000 $8,090,000 $14,478,750 $5,761,875 so so +2~~ so so Development Potential Conclusion of-Sale Adjusted Sale Price S8,197,550 0% -15% ($1,425,000) -15% ($1,950,000) $10,700,000 $15,600,000 Net Adjustments 82% 82% 36% 41% 38% 79% 26% 65% 32% 65% 13% 20% Gross Adjustments 94% 82% 48% 41% 49% 79% 26% 75% 41% 74% 53% 50"/o ,.. L';B 53 Also included in the Addenda is a report prepared by Nicholas Revill Restoration, which estimates the cost of removing and packing the items and cost of repair or replacement where they have been removed. The estimated cost of the work is $485, 000. <:/~)<.. Finally, we must consider any other costs that the seller might incur. It is assumed that an auction of the items would occur at Mar-a-Lago and that after items have been packed for shipment the buyer would bear the shipping cost. The seller, however, will incur a sales cost. As of the effective date of appraisal, Christie's charge to the seller for a··sale of this type was a 10 % commission. Accordingly, the sales commission would amount to $289,140. Accordingly, the fair market value of the decorative elements of Mar-a-Lago as of the date of donation is as follows: Appraised Value Less: Removal and Replacement Costs Less: Sales Commission TOTAL $2,891,400 485,000 289, 140 $2,117,260 This may be rounded to $2, 100,000 and added to the estimated value of Mar-a.-Lago on an 8.5-acre site by the sales comparison approach. Although many of the comparable sales include important interior decorative elements such as painted, beamed ceilings, mantelpieces, and medallions, none are so richly embellished as Mar-a-Lago. In making our adjustments to the Appraisers International estimate of value, we have deducted 47 items amounting to $967,800 in value, or 253 of the total. This amount of embellishment is considered comparable to that included in many of the comparable sales. Further, in our opinion, the sales comparison approach value conclusion remains valid even though we are assuming that these items will be removed from the property. For example, this analysis assumes that the "Thousand-Wing Ceiling" will remain in the living room and that the dining room will remain essentially intact with the exception of the wall murals and fireplace. The signature carved eagle brackets on the upper cloister and stone parrots on the lower cloister would remain. Although it could be argued that a "stripped down" Mara-Lago might lose some of its cachet, it could equally be argued that a somewhat simplified interior might have wider market appeal, both visually and in ease of maintenance. Snbdividahle Land In addition to the site of the main house, the property has excess land that can be subdivided and developed with additional residences. In the cost approach, we undertook a subdivision analysis to estimate land value. For this sales comparison approach, we have adapted the subdivision analysis to exclude the 8.5-acre lot occupied by the main / 54 improvement. Our calculations are shown on the following page. The discounted present value of the eight lots that could be subdivided and sold is $8,279,000. Summary of Sales Comparison Approach Main Residence Plus: decorative elements Plus: excess land value TOTAL $15,200,000 2,100,000 8,279,000 $25,579,000 Accordingly, the value of the subject as of April 6, 1995 by the sales comparison approach is rounded to $25,580,000. Value Conclusion Prior to Considering the Preservation and Conservation Easement The indications of value by the approaches used were as follows: Cost Approach Sales Comparison Approach $23,750,000 $25,580,000 Taking both approaches into consideration, but giving the most weight to the result of the sales comparison approach, we therefore estimate the value of a fee simple interest in the subject property to be $25,000,000 as of April 6, 1995, before considering the preservation and conservation easement. VALUATION AFTER CONSIDERING THE EASEMENT The easement imposed on the property as of April 6, 1995 prohibits the removal of almost all of the interior decorative elements, and eliminates two potential subdividable lots from the property. In addition, the property owner must maintain the property and its historic landscape to standards deemed acceptable by the National Trust for Historic Preservation. Prior to donation of the easement, it was highly likely that the objects would be removed and sold and that the two sites would be subdivided and developed with new residences. The owner had just concluded an astonishingly profitable auction of original furniture from Mar-a-Lago, at prices far beyond market estimates. Demand for building sites in Palm Beach is strong, and the supply is limited. The prestige of Mar-a-Lago makes it highly likely that the lots would be quickly absorbed by the market. MAR-A-LAGO SUBDIVISION ANALYSIS--SALES COMPARISON APPROACH, BEFORE EASEMENT DONATION Year 1 Lots sold Price/Lot Year 2 Year 3 1, 3 4, 6, 7 5, 8, 9 (see table) (see table) (see table) Gross Revenue $6,000,000 $5,600,000 $5,600,000 Less: Development Costs Sales Cost Real Estate Tax Management/Profit $1,000,000 $600,000 $325,000 $1,200,000 $560,000 $175,000 $1,120,000 $560,000 $90,000 $1,120,000 Total Expenses $3,125,000 $1,855,000 $1,770,000 Net Cash Flow $2,875,000 $3,745,000 $3,830,000 Discount Term Present Value 1 $2,566,964 2 $2,985,491 3 $2,726,118 Net Present Value @ 12.00% $8,278,574 $8,279,000 I.ot.s Eri!;;!i:LLQI Direct Ocean Site of Mar-a-Lago Oceanfront Lot Lakcfront Lot Lakefront Loe Interior Lot lncerior Lot Interior Lot Interior Lot $3,250,000 $6,000,000 $2,750,000 $2,000,000 $2,000,000 $1,800,000 $1,800,000 $1,800,000 $1,800,000 Sub~li~id~~I Lot I: Lot 2: Lot 3: Lot4: Lot 5: Lot 6: Lot 7: Lot 8: Lot9: ·- 55 Cost Approach Land Value In the cost approach before the gift of the preservation and conservation easement, we undertook a subdivision analysis to estimate land value. For the cost approach following donation, we have adapted the subdivision analysis to exclude the two lots (lots 2 and 6) that cannot be developed due to the easement agreement. The discounted present value of the eight lots that could be subdivided and sold is $9,305,000. Our calculations are shown on the following page. Building Value In the cost approach prior to the imposition of the easement, we estimated the value of the improvements to be $11, 7 50, 000. Before the easement, we made no deduction for functional or economic obsolescence. After the easement, the improvements have significant functional and economic obsolescence. The owner no longer has the ability to update the interior to reflect contemporary tastes and lifestyles. In the future, the market may not accept a property that cannot be renovated at will, and where any proposed work must be reviewed by the National Trust for Historic Preservation. For these reasons, we believe that it is appropriate to deduct 25 % from the depreciated value of the improvements to reflect functional and economic obsolescence. Undepreciated Reproduction Cost Less: Physical Depreciation Less: Functional and Economic Obsolescence $13, 144, 188 1,394,248 2,937,485 Depreciated Reproduction Cost $ 8,812,455 $ 8,810,000 Rounded ·. Estimated Value by the Cost Approach after Eascm nt Donation To arrive at the current value by the cost approach following easement donation, estimated land value must be added to the estimated improvement value. Therefore, the estimated value of the subject property is as follows: MAR~A-LAGO SUBDIVISION ANALYSIS--COST APPROACH, AFTER EASEMENT DONATION Lots sold Price/Lot Year 1 Year 2 Year 3 1, 2 (see table) 4, 7 (see table) 5, 8, 9 (see table) Gross Revenue $9,250,000 $3,800,000 $5,600,000 Less: Development Costs Sales Cost Real Estate Tax Management/Profit $1,000,000 $925,000 $325,000 $1,850,000 $380,000 $175,000 $760,000 $560,000 $90,000 $1, 120,000 Total Expenses $4, 100,000 $1,315,000 $1,770,000 Net Cash Flow $5,150,000 $2,485,000 $3,830,000 Discount Term Present Value $4,598,214 2 $1,981,027 3 $2,726,118 Net Present Value @ 12.00% $9,305,359 ... $9,305,000 S!ilidivi(IQd Lots .erk~LLQt Lot 1: Direct Ocean Lot 2: Site of Mar-a-Lago $3,250,000 $6,000,000 $2,750,000 $2,000,000 $2,000,000 $1,800,000 $1,800,000 $1,800,000 $1,800,000 Lot 3: Oceanfront Lot Lot4: Lakefront Lot Lot 5: Lot 6: Lot 7: Lot 8: Lot 9: Lakefront Lot Interior Lot Interior Lot Interior Lot Interior Lot v 56 Land Value Plus: Improvements TOTAL L)RAFT $ 9,905,000 8,810,000 $18, 715 ,000 Accordingly, our estimate of the market value of a fee simple interest in the subject property under the cost approach after the preservation and conservation easement on April 6, 1995 is $18,715,000, which we have rounded to $18,720,000. Sal s Comparison Anproach Prior to the donation of the easement, the value of the main residence was estimated to be $15,200,000, the value of the decorative elements to be $2, 100,000 and the excess land value to be $8,279,000. Following easement donation the universe of potential buyers for the property has diminished. Few buyers would be interested in a property that is so highly restricted. Few buyers would be interested in a property that must be maintained-both building and grounds--to the standards of the National Trust for Historic Preservation, an experienced and exacting steward of historic properties. Potential buyers w_ould anticipate that any renovation work required would need to be undertaken according to the standards of the National Trust, which may demand more costly materials and' methods than would typically be used. Were a buyer to consider purchasing Mar-a-Lago after the gift of an easement, that buyer would discount a purchase price to take into account the extra maintenance costs. In our opinion, an appropriatG discount would be 10% of the value of the main residence, or . approximately $1,500,000. A 10% discount is essentially analogous to an expectation at an increase in maintenance and renovation costs of $150,000 per year in perpetuity, assuming a 10% annual yield on alternative investments ($150,000/ .10= $1,500,000). The donation of the easement also impacts the fair market value of the decorative arts elements. No longer can they be removed and sold. Whereas may maintain some of their value to a particular owner in situ, many buyers would prefer to remove some of them, because to some tastes, Mar-a-Lago is simply too opulent for livability. Furthermore, the terms of the easement agreement mandate that they be maintained according to the standards of the National Trust. Accordingly, in our opinion, the residual value of the decorative fixtures that must be maintained in the house following easement donation is $500,000. 57 Finally, there is an effect on land value. For the sales comparison approach following donation, we have adapted the subdivision analysis to exclude the the site of the main residence as well as the two lots (lots 2 and 6) that cannot be developed due to the easement agreement. The discounted present value of the eight lots that could be subdivided and sold is $5,555,000. Our calculations are shown on the following page . . . ,·: "1 Summary of Sales Comparison Approach Main Less: Plus: Plus: Residence Discount for Maintenance decorative elements excess land value TOTAL 1,500,000 500,000 5 ,555,000 $19 '7 55 '000 Accordingly, the value of the subject as of April 6, 1995 by the sales comparison approach is rounded to $19, 750,000. Value Conclusion After Considering the Preservation and Conservation Easement Tax regulations governing charitable gifts of conservation easements require the taxpayer to offset the value of the easement by any corresponding increase in value to the remaining property or other property owned by the taxpayer. In this case, there is no impact on any other property owned by the donor. The indications of value by the approaches used were as follows: Cost Approach Sales Comparison Approach ·. $18, 720,000 $19,750,000 Taking both approaches into consideration, but giving the most weight to the result of the sales comparison approach, we therefore estimate the value of a fee simple interest in the subject property to be $19,250,000 as of April 6, 1995, after considering the preservation and conservation easement. MAR-A-LAGO SUBDIVISION ANALYSIS--SALES COMPARISON APPROACH, AFI'ER EASEMENT DONATION Lots sold Price/Lot Year 1 Year 2 Year 3 (see table) 4, 7 (see table) 5, 8, 9 (see table) Gross Revenue $3,250,000 $3,800,000 $5,600,000 Less: Development Costs Sales Cost Real Estate Tax Management/Profit $1,000,000 $325,000 $325,000 $650,000 $380,000 $175,000 $760,000 $560,000 $90,000 $1,120,000 Expen .~es $2,300,000 $1 ,315,000 $1,770,000 Net Cash Flow $950,000 $2,485,000 $3,830,000 Discount Term Present Value 1 $848,214 2 $1,981,027 3 $2,726,118 Total Net Present Value @ 12.00% $5,555,359 $5,555,000 [,ms ~rii;~lLQl Lot I: Direct Ocean Lot 2: Site of Mar-a -Lago Lot 3: Oceanfront Lot Lot 4: Lakefront Lot Lot 5: Lakefront Lot Lot 6: Interior Lot $3,250,000 $6,000,000 $2,750,000 $2,000,000 $2,000,000 $1,800,000 $1,800,000 $1,800,000 $1,800,000 .S..ulllii~il l i;:tl Lot 7: Interior Lot Lot 8: Interior Lot Lot 9: Interior Lot 58 EASEMENT VALUE CONCLUSION The value of the conservation easement is the difference between the value of the subject property prior to considering donation of the easement and its value after considering the donation, offset by any benefit to the donor. In this case, the value prior to donation was $25,000,000. The value after the donation was $19,250,000 . The difference is $5, 7 50, 000. The value of the conservation easement, imposing all the restrictions and conditions as set out in the easement document contained in the Addenda, as of April 6, 1995 is FIVE lVIILLION SEVEN HUNDRED AND FIFTY THOUSAND DOLLARS ($5, 750,000) EASEMENT VALUATION EXPERffiNCE Clarion Associates, Inc., is one of the most experienced firms in the country in the review, analysis, evaluation, and appraisal of preservation and conservation easements . Clarion consultants have been involved in the evaluation or appraisal of more than 100 conservation and preservation easements for private property owners and government agencies (including the Internal Revenue Service) in about 25 states and 40 cities including Chicago, Minneapolis, St. Louis, Louisville, Cincinnati, Nashville, Memphis, Atlanta, San Antonio, Denver, Los Angeles, Seattle, Cleveland, Omaha, Pittsburgh and Indianapolis. Members of the firm have appeared nationally on easement valuation programs sponsored by such organizations as the Appraisal Institute, the National Trust for Historic Preservation, The Conservation Foundation, Continuing Legal Education in Colorado, Inc., Texas Historical Commission, Arizona Open Land Trust, Historic Nashville, Inc., the Landmarks Preservation Council of Illinois, the Illinois Institute for Continuing Education, the Boston Bar Association, the Chicago Bar Association, and the American Bar Association. In virtually all of our easement valuation work, we are asked to consider the value of the property "before and after" the imposition of the easement. That entails carefully considering the development potential of the property, including the relationship between any restrictions imposed by the easement and other restrictions on use such as zoning restrictions, floodplain regulations, coastal zone management, wildlife and habitat protection, and historic preservation regulations. We have also helped communities and even states establish easement programs. Organizations we have assisted by preparing model easement documents and informational booklets on the easement concept include the Landmarks Preservation Council of Illinois, the Frederick Law Olmsted Society of Riverside, Illinois, the City of Chicago Landmarks Commission, the Trust for Public Land, the Land Trust Exchange, and the City of Lake Forest, Illinois. For the State of South Carolina Department of Parks, Recreation and Tourism and the Heritage Trust Advisory Board, we drafted new state legislation clarifying the legal basis of easements in gross, and prepared a model easement document that could be used to protect natural areas as well as heritage resources. Richard J. Roddewig, CRE, MAI, President of Clarion Associates, Inc., is both a real estate consultant and an appraiser, as well as an attorney, with extensive experience in the valuation of many types of less-than-fee interests, including easements. Mr. Roddewig is a past chairman of the American Bar Association Land Use, Planning and Zoning Committee, and for it published "Preservation Easement Law: An Overview of Recent Developments" in The Urban Lawyer, Winter 1986, Volume 18, No. 1. Mr. Roddewig is also the co-author of Preservati on Easem ents in Illinoi s, published by the Landmarks Preservation Council of Illinois, and co-author of a Handbo k on H istoric Preservation Law, published by the Conservation Foundation and the National Center for Preservation Law which includes his chapter on tax and valuation aspects of easement donations. Mr. Roddewig has written two articles on appraising easements for The ApQraisal Journal. - - •; Easement Valuation Experience Page 60 Together with Cheryl Inghram of Clarion Associates, Inc., he recently co-authored The Conservation Easemenr Handbook published by The Trust for Public Land and The Land Trust Exchange. Gary Papke, Senior Vice President of Clarion Associates, Inc., is a real estate consultant and urban planner experienced in market analysis, feasibility studies and appraisal of large office, retail, residential, industrial and special purpose properties. He has been involved in easement appraisals in Chicago, Los Angeles, Omaha, Memphis and Minneapolis, and an easement assignment for the National Trust for Historic Preservation. Christopher J. Duerksen, Senior Vice President of Clarion Associates, Inc., and Director of its Denver office also has considerable experience with conservation easements. He is the principal author of the Illinois Conservation Rights in Real Property Act, 1975 legislation that clarified the legal basis of easements in gross in Illinois. He also has experience in easement valuations on Colorado and as a board member of Scenic America and as a past Senior Associate at the Conservation Foundation in Washington, D.C. Cheryl Inghram, MAI, Vice President, also has extensive experience with preservation and conservation easements. While on the staff of the Midwest Office of the National Trust for Historic Preservation, Ms. Inghram was responsible for monitoring and enfordng preservation easements held by the National Trust in the midwest. This included an annual inspection of easement protected properties. She also assisted a number of midwestern preservation organizations and local governments in evaluating and establishing easement programs. Ms. Inghram has been involved in the appraisal of more than 25 easements in more than a dozen communities, including a review appraisal of easements affecting 11,000 acres of timber land in New Hampshire. She is the co-author of The Conservation Easement Handbook published by The Land Trust Exchange and the Trust for Public Lands. Bradford J. White, an attorney and real estate analyst, is also a Vice President of Clarion Associates and has worked on easement appraisal assignments in Chicago, Illinois; Nashville, Tennessee; Louisville, Kentucky; Johnstown, Pennsylvania; and Seattle, Washington. In his legal work, Mr. White has conducted a survey of easement recipient organizations on the administration of easement programs. He currently chairs a subcommittee of the Land Use, Planning and Zoning Committee of the Urban, State and . Local Government Law Section of the American Bar Association that often looks at easement valuation issues. ' '. QUALIFICATIONS OF CHERYL A. INGHRAM CLARION ASSOCIATES, INC. PROFESSIONAL HISTORY Present Vice President - Clarion Associates, Inc. - 1988-present Prior Senior Consultant - Pannell Kerr Forster, 1987-1988 Consultant - Shlaes & Co., 1985-1987 Field Representative and various other positions - National Trust for Historic Preservation, 1973-1985 AREAS OF SPECIAL COMPETENCE Analyst and appraiser for the real estate industry specializing in appraisal and market analysis, particularly in assignments involving historic structures and land conservation. Valuation and consulting services involve all major property types including office buildings, shopping centers, residential buildings, retirement housing, hotels, commercial recreational facilities, mixed-use developments and industrial properties. MAJOR PROJECTS Valuation of over 40 historic preservation easement donatio1is in 16 cities and 13 states for private developers and the Internal Revenue Service. Open space easement appraisals in suburban Chicago, New York State, and rural New Hampshire. Appraisal or analysis of specialty shopping centers combining old and new construction in downtown Asheville, North Carolina, Summerville, South Carolina, and Roswell, Georgia. Market and project analysis for an existing downtown office and retail development project in Fort Collins, Colorado. Retail market analysis for a 251-acre, mixed-use development in northwest suburban Chicago. QUALIFICATIONS OF CHERYL A. INGIIllAM Market analysis of proposed 440,000 square foot mixed-use project in downtown Champaign, Illinois . Marketing services for a 20-acre lakefront estate and 32,000 square foot residence on Chicago's North Shore. Appraisal of a television broadcast studio in Chicago, Illinois. Appraisal of retirement apartment complexes in Illinois, Massachusetts and Arizona. Appraisal of a 1, 173-room convention hotel in downtown Chicago. Preparation of a major program and policy study to guide an urban preservation commission in establishing an easement program. Consultation with the City of San Antonio concerning incentives to encourage rehabilitation and reinvestment in the downtown. EDUCATION Northwestern University Master of Management in Finance and Marketing Smith College Bachelor of Arts in American Studies PROFESSIONAL AFFILIATIONS Member, Appraisal Institute (designated MAI, No. 10260) Regional Ethics and Counseling Panel (1994-present) Illinois Certified Real Estate Appraiser (General), License No. 153-000569 through September 30, 1997 Colorado Certified General Appraiser, License No. CG40002965, through December 31, 1998 Affiliate Member, BOMA/Chicago (Building Owners and Managers Association of Chicago) Member, Ely Chapter, Lambda Alpha International QUALIFICATIONS OF CHERYL A. INGHRAM PUBLICATIONS Co-author of the 1987 American Planning Association publication, "Creating Workable Transferable Development Rights Programs. " Co-author of the 1988 publication by the Land Trust Exchange and the Trust for Public Land, The Conservation Easement Handbook. Co-author of 1990 Pl annb1g magazine article, "Detecting the Flaws in Market Analysis." Co-author of forthcoming Appraisal Institute seminar text, "Appraising High-Value and Historic Homes," premiering Fall 1996 OTHER ACTIVITIES Adjunct Lecturer, University of Illinois at Chicago, School of Urban Planning and Policy . (1987) Board Member, Friends of Downtown Chicago. (1987-92) Fund Committee Member, Landmarks Preservation Council of Illinois. (1989-1995) Board and Executive Committee Member, Landmarks Preservation Council of Illinois. (1990-present) Member, Illinois Historic Sites Advisory Council. (19931995) ADDENDA