Item 6: Ordinance Vacating a Portion of Moss Street

Home Browse Search

ATTACHMENTD Public Works Engineering City of Eugene 99 E. Broadway, Suite 400 M Eugene, Oregon 97401 EMORANDUM (541) 682-5291 (541) 682-5032 FAX Date: August 26, 2011 To: Lisa Gardner, Planning Director Cc: Steve Ochs, Associate Planner From: Russ Royer, Senior Real Property Officer Subject:Moss Street Vacation Assessment In preparation for the upcoming vacation hearing Steve Ochs asked that I prepare and send to your attention a summary of the basis of value for the proposed assessment of the segment of Moss Street right of way between thth 15 Avenue and 17 Avenue which is to be vacated by the City to the U of O. As you may recall there was a basis of value report prepared by a City staff appraiser and also an appraisal prepared by a private appraisal firm (Duncan & Brown) at the request of the University of Oregon. The valuation reports resulted in a number of meetings with City staff, U of O staff, and the appraisers. The participating City and the University staff agreed to recommend the final negotiated assessment of $1,856,000. The initial assessment prepared by City staff concluded a total assessment value of $2,136,000, while the estimate of value by the appraisal firm contracted by the University estimated a value of $1,590,000. Both the City and private appraisers were using the same or similar comparable sales data to estimate the unencumbered market value of the vacation areas. The variance in value tended to result from assumptions of the appraisers and their perception of the immediate demand relative to market supply. The expected market demand resulted in additional discounting of value by the private appraiser. In addition there were utility easements that needed to be reserved on portions of the subject vacation area. The market value of the subject area was discounted to recognize the impact of the reserved easements and the resulting diminution of value to the encumbered areas. The following summarizes the adjustments for market absorption and the impacts of the reserved easement: Total area of right of way to be vacated is approximately 58,729 square feet being about 80 feet wide by 734 feet long. Thus half or about 29,364 sq ft will benefit each side of the street which has 2 different values because of the parcel sizes and resulting market absorption discounts. Both appraisals began from a base unit price of $40 per square foot, before discounting for easements or market absorption. D & B applied a 15% annual discount rate to both parcels to address their estimated market absorption of 1.3 acres per year. This yielded a discounted unencumbered value of $28.75 per sq ft for the larger 13.1 acre parcel on the west side of Moss Street and $37.70 per sq ft for the smaller 2.6 acre parcel on the east side of Moss. It is assumed half of the r/w vacated would benefit the properties on each side of the street, thus $28.75 and $37.70 per sq ft to the respective sides.