75B - PH - CONDEMNATION 1501 N BRISTOL

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SUMMARY OF THE BASIS FOR JUST COMPENSATION The purpose of the appraisal study is to express an estimate of total just compensation applicable to the proposed partial acquisition of the subject parent property. Just compensation is based on a quantitative measure of market value. Market value is defined in The California Code of Civil Procedure, § 1263.320, as: "(A) The fair market value of the property taken is the highest price on the date of valuation that would be agreed to by a seller, being willing to sell but under no particular or urgent necessity for so doing, nor obliged to sell, and a buyer, being ready, willing, and able to buy but under no particular necessity for so doing, each dealing with the other with full knowledge of all the uses and purposes for which the property is reasonably adaptable and available. (B) The fair market value of property taken, for which there is no relevant market is its value on the date of valuation as determined by any method of valuation that is just and equitable." Additionally, Section 1263.330 provides that the fair market value shall not include an increase or decrease in value attributable to the project for which the property is to be acquired. Accordingly, the subject property has been appraised absent any influence of the proposed freeway interchange improvement project. There are three conventional methods (approaches) which can be utilized to estimate value. They are the Sales Comparison Approach, Cost - Summation Approach, and Income Capitalization Approach. The Sales Comparison Approach has been employed herein to estimate the value of the subject underlying land parcel which will be utilized in the valuation of the proposed take area as well as in the "after" condition analysis. The Sales Comparison Approach and Income Capitalization Approach have been applied to the subject parent property for the purpose of estimating the unencumbered fee simple market value as presently improved with the fast -food restaurant facility. Certain elements of the Cost - Summation Approach have been employed herein for the purpose of estimating the contributory value of existing improvements impacted by the partial acquisition. Value of Parent Property before Taldng: Sales Comparison Approach: The Sales Comparison Approach takes into account properties which have sold in the open market. This approach, whether applied to vacant or improved property, is based on the Principle of Substitution which states, "The maximum value of a property tends to be set by the cost of acquiring an equally desirable substitute property, assuming no costly delay is encountered in making the substitution. " Thus, the Sales Comparison Approach attempts to equate the subject property with sale properties by analyzing and weighing the various elements of comparability. 75B -10