Item 11 - Agreement for the Sale of Land from the City and Approve an Appropriation Adjustment

Home Browse Search

The Sales Comparison Approach was used to value the subject property. The Cost Approach and the Income Capitalization Approach were not used in this analysis, because the subject property is vacant. Thus, these approaches are not relevant in this instance. General - Subject Property The subject property is a vacant site located adjacent to a residential neighborhood. The Land Use Element of the General Plan designates the subject property as LR-7, Low Density Residential. The subject is zoned R1, Single Family Residence. Valuation - Subject Property A search for comparable sales was conducted within the City of Santa Ana. Due to the limited number of sales, the search was expanded to include central and north Orange County. The most relevant sales were used to arrive at the value conclusion. Price per square foot was used as the unit of comparison. The indicated range of value of the subject property is $33.80 per square foot to $79.57 per square foot. The indicated value is $40.00 per square foot if independently developable. The subject property is a landlocked site with the only potential user being the adjacent property owners on either side of the property. The subject property is a small, narrow, landlocked parcel. The value of the subject property on a per square foot basis is less than the value of the abutting parcel on a per square foot basis. Properties with limited utility, such as the subject, are often referred to as remnant properties. These properties are most often sold at a discount. The factors that diminish the utility of a parcel may include physical constraints such as unusually small size, irregular configuration, access issues, or heavy encumbrances such as blanket easements, deed restrictions, or covenants. These restrictions limit marketability and value. Historical sales data for remnant properties with diminished utility was collected and reviewed as the basis for estimating the appropriate discount to be applied to the preliminary value estimate. Due to the infrequency of these sales, the data search was expanded to include all of Southern California over an extended period of time. The analysis of remnant properties found that discount rates range from 36% to 97%; however, the predominant discount is above 60%. Discounts of 90% and 97% were applied to the preliminary value estimate of $40.00 per square foot to reflect the diminished utility of the subject property due to its lack of access from a public street, its small size, and its long, narrow shape. $40.00/SF @ 90% discounted value = $4.00/SF x ±4,025 SF = $16,100 $40.00/SF @ 97% discounted value = $1.20/SF x ±4,025 SF = $4,830 rounded to $4,800 Opinion of Value It is the appraiser's opinion that the market value range of the subject property as of the date of value, June 9, 2023, subject to the assumptions and limited conditions stated herein, is: $4,800 to $16,100 City of Santa Ana Date of Value: June 9, 2023 ±4,025-SF Portion of APN 410-071-44 5