Real Estate Consultation June 4 2012 (2).pdfMacaulay & Associates, Ltd.
2927 Colby Avenue, Suite 100
Everett, WA 98201
425-258-2611 Phone
425-252-1210 Facsimile
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Real Estate Consultation° 1 j
June 4, 2012 1VI"OP ,A{ip�V°l' fil✓bpi`
Robert McChesney, Executive Director
Port of Edmonds
336 Admiral Way
Edmonds, WA 98020-7214
Re: 10.6 acres of commercially zoned land known as Harbor Square, located on the southwest corner of
Dayton Street and State Route 104, Edmonds, WA. job No. 12-130-1.
Dear Mr. McChesney:
The purpose of this analysis is to consider the difference in land value between the current bundle of rights
for Harbor Square and assuming the city approves a contract rezone to allow five -story structures.
Investigating land sales around the area and, considering their sizes and intensities of use, I estimate that
this difference, without and with the proposed contract rezone, is $8.50/SF to $15.00/SF for the Harbor
Square tract. Generally speaking, land value without the proposed entitlement is approximately one-third
to one-half lower than "as entitled".
A November 2009 study by the Seattle -based Berk consulting firm considered the redevelopment option
under existing zoning. The land residual value in that report returned a negative number assuming
redevelopment with current zoning, indicating that the highest and best use of the Harbor Square tract as
currently entitled is to hold for future development. This would indicate that land value under current
vesting would be substantively lower than under proposed vesting. In our May 2012 consultation report,
under the assumption that the city allows a higher intensity use, we estimated that a developer would pay
roughly $27 to $34 per square foot, and it is apparent that construction would be feasible without undue
delay.
As further illustration, two land sales along the I-5 corridor are meaningful. The first transaction involves
a 15 -acre tract on the east side of 1-5, just south of 128th Street SE. It sold in May 2010 for $22.00/SF. The
buyer completed the first phase of a medical facility known as Swedish/Mill Creek. Zoning is Urban. Center,
which allows high-intensity mixed use development and maximum building height of 90 feet. By
Mr. Robert McChesney
June 4, 2012
Page 2
Job No. 12-130-1
comparison, a 7.61 -acre site with similar zoning sold in December 2011 for $13.57/SF. It is located on the
south side of 164th Street SW and Larch Way, just east of I-5. The price included entitlements for
construction of a 230 -unit multi -family residential complex in a combination of townhomes and apartments,
and some site improvements were in place at time of sale. The difference in price is roughly approximately
$8.50/SF.
In Everett, for example, the most recent CBD -zoned land sale was $38 per square foot while a commercially
zoned site outside the downtown core sold for $20 per square foot. Both transactions involved the same
buyer. Aside from site size, the two primary reasons for the difference in price are parking requirements
(which are less onerous in the downtown core) and building height limits (65 feet for C-2 zoned land versus
150 feet for CBD -zoned land).
Respectfully submitted,
MACAULAY & ASSOCIATES, LTD.
Paul C. Bird, Senior Associate
WA State Certified - General Appraiser No. 1100902