7/14 Spaceport TorC Visitors Welcome Center LAND appraisal!

5/21/2018 7/14 Spaceport TorC Visitors Welcome Center LAND appraisal!

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BARRETT APPRAISAL SERVICES, LLC

Commercial AppraisalSummary Report

Six Acres of Commercial LandSite of Proposed Spaceport America Welcome Center

Within The New Hot Springs Retail CenterA Commercial Subdivision

Truth or Consequences, Sierra County, New Mexico

July 2014

Prepared for:New Mexico Spaceport Authority901 E. University Ave., Suite 356L

Las Cruces, NM 88001

AndNew Mexico Finance Authority207 Shelby Street, Santa Fe, NM

Prepared byG. Vincent Barrett, Ph.D., MAI

NM Certification 506-G

BAS, LLC


Approximate Area of Commercial Subdivision and Subject Site

Approx HSRC Area

Wal-MartSite

Subject 6 Ac Area


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July 10, 2014

Ms. Christine Anderson, Executive DirectorNM Spaceport Authority901 E. University Ave., Suite 356L

Las Cruces, NM 88001

Letter of Transmittal

RE: Proposed location of Spaceport America Welcome Center a 6 acre Commercial Site located inTruth or Consequences Sierra County, NM

Dear Ms. Anderson:

At your request, Barrett Appraisal Services, LLC has completed an appraisal and arrived at an

estimated market value for the six acre site planned as the future site of the Spaceport America Welcome

Center that is located within the 39.945 platted and approved commercial subdivision, known as the

New Hot Springs Retail Center that is to be located on the SEC of I-25 and Date Street within the City

limits of Truth or Consequences, NM. The property is accessed from Date Street.

The objective of this appraisal is to estimate the current market value of the six acres within the

subdivision. The 39.945 acre site including the six acre subject is currently under the ownership of

Ashbaugh Construction Co. Inc. as recorded in WD Book 102 pg 1659-1660 recorded 17 December

2004 and WD Bk 106 pg 130-134 recorded 20 April 2006 and WD book 94 pages 2659 in the Clerks

Office of Sierra County, NM. The original subdivision involved a total of 65 +- acres, the subjec

subdivision being a remaining portion of that total.

The value determined, in the course of the analysis is based on the existing condition that the

subject commercial subdivision parcels are undeveloped lots as zoned and platted and that the value

represents the current market value of the subdivided six acre site.

The attached complete narrative appraisal report describes the data, methodology and reasoning

used in the analysis. The analysis is subject to the assumptions and limiting conditions detailed in the

report. The assumptions and limiting conditions should be carefully reviewed as they may affect the

conclusions drawn and the final estimate of market value.

The research and analysis indicates the following market value of the subject property.

Effective Date: July 5, 2014

Market Value: $1,244,000


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This is a summary report, which is intended to comply with the reporting requirements set forth

under Standards Rule 2 of the Uniform Standards of Professional Appraisal Practice. As such, it may

only present descriptive discussions of the data, reasoning, and analyses that were used in the appraisal

process to develop the appraisers opinion of value. Where not presented directly in the report, then

supporting documentation concerning the data, reasoning, and analyses is retained in the appraisers file

The depth of discussion contained in this report is specific to the needs of the client and for the intended

use as stated herein. The appraiser is not responsible for unauthorized use of this report.

In preparing the report, the conduct of the appraiser and all research associates has been governed

by the professional standards and code of ethics of the Appraisal Institute and the Appraisal Foundation

My compensation is not contingent upon the reporting of a predetermined value or direction in value tha

favors the cause of the client, the attainment of a loan, the amount of the value estimate, the attainment

of stipulated result or the occurrence of a subsequent event.

The analysis contained in this appraisal may be based upon hypothetical assumptions, and

estimates that are subject to uncertainty and variation. These estimates may be based on data obtained in

interviews with third parties or documents obtained from third parties, and such data may not always be

completely reliable. In addition, the analysis makes assumptions as to the future behavior of consumers

and the general economy, which are highly uncertain by their nature. It may be that some assumptions

will not materialize and that unanticipated events may occur which will cause actual achieved results to

differ from the analysis contained in this report, and these differences may be material. Therefore, while

the analysis was conscientiously prepared on the basis of prudent research of the available data no

warranty can be made of any kind that the projected results will, in fact, be achieved. Additionally,

Barrett Appraisal Services, LLC has not been engaged to evaluate the effectiveness of

management/marketing, and is not responsible for future management/marketing efforts and actions

upon which actual results may depend.

We did not ascertain the legal, engineering, and regulatory requirements that may be applicable

to the property, including zoning certification and other state and local government regulations, permits

and licenses. No effort has been made to determine the possible effect on the property of present ofuture federal, state or local legislation, including any environmental or ecological matters or

interpretations thereof. With respect to market demand analysis, our work did not include analysis of the

potential impact of any unanticipated rise or decline in local or general economic conditions.

It is the opinion of the appraiser, based on the assumptions employed in the investment

parameters for the subject, that the value conclusion represents a market value achievable within 18-24


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months exposure on the open market. No responsibility for any event, condition, or circumstance

affecting the market that may take place subsequent to the last day of our fieldwork, i.e., July 5, 2014.

The appraiser has satisfied all competency requirements of USPAP and the Appraisal Institute

and states that he is qualified to conduct the appraisal assignment. All FIRREA and USPAP research and

reporting guidelines have been meet.

This letter is invalid as an opinion of value if detached from the report, which contains the text,

exhibits, and addenda. Barrett Appraisal Services, LLC appreciates the opportunity to be of service to

you. Should you or any other authorized user of this appraisal have further questions arising from the

report, they will be welcomed.

Barrett Appraisal Services, LLC

G. Vincent Barrett, Ph.D, MAI,NM General Certification 506-G


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TABLE OF CONTENTSNumber Page

TABLE OF CONTENTS ......................................................................................................................... V

EXECUTIVE SUMMARY .................................................................................................................... VI

SECTION I PREFACE ........................................................................................................................... 2

SECTION II INTRODUCTION .......................................................................................................... 18

SECTION III GENERAL AREA ANALYSIS ................................................................................... 26

SECTION IV SITE DATA ................................................................................................................... 42

SECTION V VALUATION ................................................................................................................... 46

SECTION VI CERTIFICATION ......................................................................................................... 61


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EXECUTIVE SUMMARY

Appraisal Assignment: Determine the current market value of 6 acres that are contained within the

existing New Hot Springs Retail Center which is a commercia

subdivision located in Sierra County within the SEC of the intersection of

Date Street and I-25.

Client: Ms. Christine Anderson, Executive DirectorNM Spaceport Authority901 E. University Ave., Suite 356LLas Cruces, NM 88001

AndNew Mexico Mortgage Finance Authority207 Shelby StreetSanta Fe, NM

Intended Use: For the client to use for asset valuation and in the mortgage loan reviewprocess.

Intended User: The intended user of this report is the above client and their assignees

including the NM Finance Authority and no others. This appraisal is not to be

relied upon by any other third parties for any purpose, whatsoever. No third

parties are authorized to rely upon this report for any reason without the

express written consent of the appraiser. A third party being defined as

anyone but the client and assignees. The above client is an experienced userof appraisals and is considered the responsible party for payment of the

appraisal fee.

Ownership Interest: Fee Simple

Appraiser Interest: The appraiser has no current, past or future anticipated interest in the

subject 6 acre site.

Improvements: The subject is within an existing platted, commercial subdivision with

Phases 1through 5. The original size was 65.208 acres and the remaining

unsold acreage is approximately 39.945 acres. Access roads are in with all

utilities to the lots.


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Locational Data: The subject property is located within the City limits of Truth or

Consequences, Sierra County, NM within the SEC of the Intersection of

Date Street and I-25.

Highest & Best Use: The highest and best use analysis indicates that the highest and best use is

to developed as the location of a commercial site.

Zoning: The subject is within the zoning jurisdiction of Truth or Consequences

and is zoned C-1 general commercial.

Valuation Method: The valuation method used is the estimation of per square foot values

using the sales comparison approach leading to the formulation of a

current market value.

Market Value Estimate $1,244.000


Section I

Preface


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SECTION I - PREFACE

The preface to the report contains the various maps and photographs that relate to the property

and its environment. They should be reviewed prior to the reading of this report. They will be

referenced by figure number where appropriate throughout the narrative part of the appraisal. Detailed

maps and other figures are contained in the body of the report where necessary for clarification or

illustrative explanation.

Figure Subject Page1-1 Regional Location 3

1-2 Relative Location 3

1-3 Neighborhood Location 4

1-4 Illustrative Site Plan 5

1-5 Plat Map 6

1-6 Flood Zone 7

1-7 Aerial Photo A 9

1-8 Aerial Photo B 9

1-9 Welcome Center Site Location Map 10

1-10 Site Survey 10

1-11 Photos of Subject Site 11


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FIGURE 1-1 REGIONAL LOCATION MAP

FIGURE 1-2 RELATIVE CITY LOCATION


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FIGURE 1-3 NEIGHBORHOOD MAP


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FIGURE 1-4 ILLUSTRATIVE SITE PLAN OF HSRCWITH SUBJECT INDICATED

Subject Area


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FIGURE 1-5 PLAT MAP

HolidayInn

Spaceport WelcomeCenter 6 Ac


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FIGURE 1-6 FLOOD ZONE MAP PANEL 350073-0005C7/16/1996

Area of Subject


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Moderate to Low Risk Areas

In communities that participate in the NFIP, flood insurance is available to all property owners andrenters in these zones:

ZONE DESCRIPTION

B and X (shaded)

Area of moderate flood hazard, usually the area between the limits of the 100-year and 500-year floods. Are also used to designate base floodplains of lesserhazards, such as areas protected by levees from 100-year flood, or shallowflooding areas with average depths of less than one foot or drainage areas lessthan 1 square mile.

C and X (unshaded)Area of minimal flood hazard, usually depicted on FIRMs as above the 500-yearflood level.

High Risk Areas

In communities that participate in the NFIP, mandatory flood insurance purchase requirementsapply to all of these zones:

ZONE DESCRIPTION

AAreas with a 1% annual chance of flooding and a 26% chance of flooding over the lifeof a 30-year mortgage. Because detailed analyses are not performed for such areas;no depths or base flood elevations are shown within these zones.

AEThe base floodplain where base flood elevations are provided. AE Zones are nowused on new format FIRMs instead of A1-A30 Zones.

A1-30These are known as numbered A Zones (e.g., A7 or A14). This is the base floodplainwhere the FIRM shows a BFE (old format).

AH

Areas with a 1% annual chance of shallow flooding, usually in the form of a pond, withan average depth ranging from 1 to 3 feet. These areas have a 26% chance offlooding over the life of a 30-year mortgage. Base flood elevations derived fromdetailed analyses are shown at selected intervals within these zones.

AO

River or stream flood hazard areas, and areas with a 1% or greater chance of shallowflooding each year, usually in the form of sheet flow, with an average depth rangingfrom 1 to 3 feet. These areas have a 26% chance of flooding over the life of a 30-yearmortgage. Average flood depths derived from detailed analyses are shown withinthese zones.

AR

Areas with a temporarily increased flood risk due to the building or restoration of aflood control system (such as a levee or a dam). Mandatory flood insurance purchaserequirements will apply, but rates will not exceed the rates for unnumbered A zones ifthe structure is built or restored in compliance with Zone AR floodplain managementregulations.

A99Areas with a 1% annual chance of flooding that will be protected by a Federal floodcontrol system where construction has reached specified legal requirements. Nodepths or base flood elevations are shown within these zones.


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FIGURE 1-7 AERIAL PHOTO

FIGURE 1-8AERIAL PHOTO PROPOSED WELCOME CENTER LOCATION

Location of WCBuilding


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FIGURE 1-9WELCOME CENTER LOCATION WITHIN HSRT

FIGURE 1-10SITE SURVEY

Subject


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FIGURE 1-8 PHOTOS OF SUBJECT SITE

1. Entrance Street to Hot Springs Retail Center subdivision from Nth Date Street, i.e., H.R. Ashbaugh Dr

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2. View North from intersection of Buck Greer St and H.R. Ashbaugh Dr.


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3. View East along H.R. Ashbaugh Drive from intersection with Sanford Wilson Dr.

4. View west along proposed entrance rd to welcome center from Sanford Wilson Rd.


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5. View east from between Block 5 and 6 towards Wal-Mart. Note Elevation.

6. View North from proposed welcome center site. Holiday Inn Express in foreground.


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7. Location of proposed welcome center building. Sign to be removed.

8.VIEW SOUTH FROM INTERSECTION OF F.G.AMIN ST AND BUCK GREER ST.


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9.VIEW NORTH FROM WEST LINE OF SUBJECT ALONG I-25

10.VIEW NORTH FROM INTERIOR OF SUBJECT SITE.HOLIDAY INN EXPRESS IN DISTANCE


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11. View south along I-25 from welcome center building site.

12. View North along I-25 from welcome center building site.


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Section II

Introduction


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SECTION II - INTRODUCTION

1. IDENTIFICATION OF THE SUBJECT PROPERTY

The subject of this report is a six acre site located within the 39.945 remaining acres of the New

Hot Springs commercial subdivision. The subject original acreage was 65.208 of which 25.263 acres

have been sold or are under contract to be sold. The County records show that 10 parcels have been

platted into Blocks and lots ranging in size from .45 acres to 2.491 acres. Two of the smaller lots are for

utility and access only. One larger parcel of 8.81 acres has been subdivided into two parcels one of 6

acres which is the subject site and a second parcel of 2.81 acres as well as 26.93 acres that are not yet

subdivided. The general area of the subject is on the east side of Interstate 25 and west of Date Street (I-

25 Business Loop) at exit 79 which is the intersection of I-25 and Date Street in Truth or Consequences,

Sierra County, NM. The following Table 2-1 illustrates the subject lots and parcels. The highlightedBAS # 11 is the original 8.81 acres from which the six acre subject has been subdivided.

TABLE 2-1SUBJECT LOTS &PARCELS

BA # D C A.

1 AC C. 18179 3022077021202 B 1 2 0.45 19,602

2 AC C. 18181 3022077120113 B 3 1A 0.98 42,689

3 AC C. 18182 3022077136101 B 3 2A 0.83 36,155

4 AC C. 18981 3022077160132 B 4 1 0.534 23,2615 AC C. 18987 3022077159119 B 4 2 0.534 23,261

6 AC C. 18988 3022077159105 B 4 3 0.534 23,261

7 AC C. 18989 3022077158092 B 4 4 0.534 23,261

8 AC C. 18990 3022077147068 B 4 5 1.892 82,416

9 . . 18991 3022077121069 B 4 6 2.491 108,508

10 AC C. 18992 3022077085074 B 4 7 0.408 17,772

11 AC C. 16585 3022077144172 2,E4,28,13, 4 8.81 383,764

12 AC C. 18008 3022077100235 28,13, 4 26.93 1,173,071

39.945 1,740,004

2. ZONING

The subject is within the City limits of Truth or Consequences and zoned C-1 Commercial. The

subdivision is encumbered with Covenants, Restrictions and Conditions. The commercial Covenants

Restrictions and Conditions are in place to accommodate appropriate commercial development and to

maximize the commercial developmental values.


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3. LEGAL IDENTIFICATION

The original subject subdivision site contained a total of approximately 65.208 acres and is

legally identified by metes and bounds as contained on the warrantee deed which is contained in the

Addenda. Each remaining lot is identified by the block and lot number within the subdivision as

illustrated above. The subject six acres is platted and recorded as a summary replat of Plat of Parcel 1and Parcel 2 (subject), New Hot Springs Retail Center as recorded 26 September, 2013 in Book 122

Page 1736, Sierra County, NM. The subject tract lies within the Section 28, Township 13 south, Range

4 west, NMPM.

4. HISTORY OF OWNERSHIP

The subject acreage is currently under the ownership of Ashbaugh Construction Co. Inc. as

recorded in WD Book 102 pg 1659-1660 recorded 17 December 2004 and WD Bk 106 pg 130-134

recorded 20 April 2006 and WD book 94 pages 2659 in the Clerks Office of Sierra County, NM.

5. PURPOSE AND SCOPE OF WORK THE APPRAISAL

The purpose of this appraisal is to determine the current market value of a specific six acre site

that is located within the new Hot Springs Retail Center and that is proposed to be purchased and

developed as the site of the future Spaceport Welcome Center in Truth or Consequences, New Mexico

The intent of this appraisal is to determine the current market value of the subject property in its as is

condition, which is unimproved but with some public roads and all trunk utility infrastructure in place

and as subdivided in accordance with the platted and recorded Summary Plat of Parcel 1 and Parcel 2

(subject), New Hot Springs Retail Center as recorded 26 September, 2013 in Book 122 Page 1736

Sierra County, NM.

The scope of work of the appraisal is to analyze the physical, economic and legal dimensions of

the subject parcel and then to conduct an analysis of the supply and demand sides of comparable

properties. One purpose of which is to find those sales of comparable properties that will best reflect the

characteristics of the subject. Those sales chosen, as the most representative will be analyzed and thei

sale prices adjusted so that they reflect the physical, legal and economic conditions of the subject parcel.

6. DEFINITION OF

MARKET

VALUE

Market Value The most probable price which a property should bring in a competitive and open

market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently

knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition i

the consummation of a sale as of a specified date and the passing of title from seller to buyer whereby:

Buyer and Seller are typically motivated.


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Both parties are well informed or well advised, and each acting in what he considers

his own best interest.

A reasonable time is allowed for exposure in the open market.

Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements

comparable thereto; and 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.

Source: Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), FederalRegister, Vol. 55, no. 163 August 22, 1990 Pg. 34228 and 34229

7. PROPERTY RIGHTS APPRAISED

The property right appraised is the market value of the fee simple ownership.

8. EFFECTIVE DATE OF APPRAISAL AND DATE OF REPORT

The effective date of this appraisal is July 5, 2014. The date of the report is July 10, 2014.

9. COMPETENCY TO PERFORM

The appraiser involved in this assignment has past experience in appraising this property type

and in addition is actively engaged in appraisal work in the geographical area of the subject property

All steps necessary to acquire adequate data on this area for similar properties has been taken, resulting

in adequate knowledge of the property type and location to meet the competency requirements of

USPAP (Uniform Standards of Professional Appraisal Practice).

10. EXPOSURE TIME AS DEVELOPEDExposure time is assumed to be 18 to 24 months. Exposure time is the estimated length of time

the property interest being appraised would have been offered on the market prior to the hypothetical

consummation of a sale at market value on the effective date of the appraisal: a retrospective opinion

based on an analysis of past events assuming a competitive and open market.

11. ASSUMPTIONS AND LIMITING CONDITIONS

This appraisal is made subject to the following assumptions and limiting conditions:

It is assumed that all lot release agreements or release clauses have been agreed to by the

developer/owners and any lending institution that may hold a mortgage or have other financing

arrangements regarding the subject property.

The valuation of the subject property is based, in part, on the conceptual specific land

use plan put forth by Ashbaugh Construction Co., Inc. It is further assumed that al


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governmental approvals have been granted to allow such a plan. I reserve the right to

alter the conclusion of the estimated values contained in this report in the event that any

change in the development costs occur or there is a change in the specific land use plan

as to the number of units/lots or acreage or change in any one of the zoned/defined land

uses. The appraiser has examined the available flood maps that are provided by the Federa

Emergency Management Agency (or other data sources) and has noted in the appraisal

report whether the subject site is located in an identified Special Flood Hazard Area

Because the appraiser is not a surveyor, he or she makes no guarantees, express or

implied regarding the determination.

The valuation is based on the approval of the final subdivision development plat as may

be submitted to and approved by the relevant Planning Department prior to recording.

Improvements are assumed to be completed as defined in any structures building

specifications that may be provided, a copy of which may be located in the Addenda of

this report. Improvements are assumed to be designed and constructed using appropriate

market standards.

New Mexico is non-public disclosure State and as such the comparable sales data used in

the analysis are believed to be reasonably correct. Where certain holes in the data cannot

be filled from available documents or confirmed by grantee or grantor then it may be

necessary to extrapolate certain figures. The appraiser makes no guarantees, express or

implied regarding the exactness of the data so obtained. The data so obtained is used

solely to assist the appraiser in forming an opinion of value and more or less weight maybe given to any comparable data.

The appraiser is not a licensed real property inspector. This report should not be relied

upon to disclose any conditions present in the subject property. The appraisal report does

not guarantee that the property is free of defects. A professional property inspection is

recommended, if this is of concern to the client.

No responsibility is assumed for matters that are legal in nature, nor is any opinion of title

rendered. The appraiser is not qualified to conduct a title search or land survey and is not

responsible for flaws in the title or any interests that may exist in the subject that have not

been specifically identified and provided to him.

No survey of the property has been made by the appraiser. No responsibility is assumed in

connection with such matters. Sketches in this report may not be to scale and are included

only to assist the reader in visualizing the property.

Barrett Appraisal Services, LLC is unaware of any cross easements or any covenants

conditions or restrictions impacting the subject property. We assume adequate ingress


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and egress to the property and we assume any reasonable sale of the property would not

be inhibited by any covenants, conditions, or restrictions.

Liens against the property, if any, have been disregarded, and the property is appraised as

though free and clear, under responsible ownership and competent management. Any

rights or interest claimed by any grantees under existing contracts for sale are disregarded Information furnished by others and contained in this report is so noted and is believed to

be reliable, but no responsibility is assumed for its accuracy.

No responsibility is assumed for the accuracy of diagrams, sketches, or maps included in

this report. These are for illustrative purposes only and provided solely for the purpose o

assisting the reader to visualize the subject property being appraised.

It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or

structures which would render it more or less valuable. No responsibility is assumed fo

such conditions or for arranging for engineering studies that may be required to discover

them.

It is assumed that there is full compliance with all applicable federal, state, and loca

environmental regulations and laws unless noncompliance is stated, defined, and

considered in the appraisal report.

It is assumed that all applicable zoning use regulations and restrictions have been

complied with, unless nonconformity has been stated, defined, and considered in the

appraisal report.

It is assumed that all required licenses, certificates of occupancy, consents, or other

legislative or administrative authority from any local, state or national government orprivate entity or organization have been or can be obtained or renewed for any use on

which the value estimate contained in this report is based.

It is assumed that the utilization of the land and improvements is within the boundaries of

the property lines of the property described and that there is no encroachment or trespass

unless noted in the report. Land area calculations derived from recorded documents are

considered correct.

Any distribution of the value in this report between land and improvements applies only

under the stated program of utilization. The separate valuations for land and

improvements must not be used in conjunction with any other appraisal and are invalid if

so used.

The appraisal of any interest less than the whole fee simple estate relates only to the

fractional interest defined. The value of such a fractional interest plus the value of al

other fractional interests may or may not equal the value of the entire fee simple estate

considered as a whole.


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The liability of Barrett Appraisal Services, LLC and employees and affiliated independen

contractors is limited to the client only and to the fee actually received by the appraiser

for this appraisal. Further, there is no accountability, obligation, or liability to any third

party.

The Contract for appraisal, consultation or analytical service is fulfilled, and the total feeis payable upon the completion of the report. The Appraiser or those assisting in the

preparation of the report will not be asked or required to give testimony in court or

hearings because of having made the appraisal, in full or in part, nor engage in pos

appraisal consultation with client or third parties, except under separate and specia

arrangements, and at additional fees. If testimony or deposition is required because o

any subpoena, the client shall be responsible for any additional time, fees, and charges

regardless of the issuing party.

Possession of this report, or a copy thereof, does not carry with it the right of publication

It may not be used for any purpose by any person other than the party to whom it is

addressed without the written consent of the appraiser, and in any event only with proper

written qualification and only in its entirety.

Neither all, nor any part of the contents of this report shall be disseminated to the public

through advertising, public relations, news, sales, or other media without the prior written

consent and approval of the appraiser.

Unless otherwise stated in this report, the existence of hazardous substances, including

without limitation asbestos, polychlorinated biphenyl's, petroleum leakage, or agricultural

chemicals, which may or may not be present on the property, or other environmental

conditions, were not called to the attention of the appraiser, nor did I become aware of

such during my inspection. The appraiser has no knowledge of the existence of such

materials on or in the property unless otherwise stated. The appraiser is not qualified to

test such substances or conditions. The presence of such substances, such as asbestos

urea formaldehyde foam insulation, or other hazardous substances or environmental

conditions, may effect the value of the property. The value estimated is predicted on the

assumption that there is no such condition on or in the property or in such proximity

there-to that it would cause a loss in value. No responsibility is assumed for any such

conditions, nor for any expertise or engineering knowledge required to discover them

The client is urged to retain an expert in this field, if desired.

The Americans with Disabilities Act ("ADA") became effective January 26, 1992. We

have not made a specific compliance survey and analysis of this property, as proposed or

existing, to determine whether or not it is in conformity with the various detailed

requirements of the ADA. It is possible that a compliance survey of the property


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together with a detailed analysis of the requirements of the ADA, could reveal that the

property is not in compliance with one or more of the requirements of the Act. If so, thi

fact could have a negative effect upon the value of the property. Since we have no direc

evidence relating to this issue, we did not consider possible compliance with the

requirements of ADA in estimating the value of the property.

The following Section III presents the general population, economic and real estate marke

conditions impacting the subject site.


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Section III

General Area Analysis


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SECTION III GENERAL AREA ANALYSIS

The general area analysis is provided to the reader so that they may have a clearer understanding

of the socio/ economic environment within which the subject property must operate. Although in somecases much of the analysis may not appear to be linked directly to the subject, there is always an indirec

linkage through the aggregated larger social and economic influences in the community that should be of

interest as well as helpful to the reader.

The subject property is located just north of the downtown commercial business district of Truth

or Consequences, NM in an area locally known as the north business district. The site is in the SEC of

the intersection of North Date Street and I-25. The commercial districts in T or C run the length of Main

Street/Broadway and Date Streets north and south through T or C and for approximately three miles eas

west along Third Street. The City of Truth or Consequences is the County seat and dominant market area

in Sierra County, NM. Truth or Consequences is estimated to have a current population of approximately

8,500.

Sierra County is largely a low density county with approximately 13,500 in population. The

economy depends largely on agriculture and tourism at Elephant Butte Lake State Park three miles east

of Truth or Consequences, which is the largest nearby City. The subject is approximately 80 miles

northeast of the dominant trade area, Las Cruces, which is to the south in Dona Ana County. The City o

Las Cruces forms the principal trade area and provides the economic base of the region. The City of

Truth or Consequences is geographically positioned near the center of Sierra County and is the county

seat. Truth or Consequences is bisected from north to south by I-25. The New Mexico/Texas Border iapproximately 120 miles south of the city. Also located along the eastern portion of Sierra County is the

White Sands Missile Range and Military Reservation.

Elephant Butte is currently one of the newest cities in New Mexico with a year round population

of approximately 1,500. During weekend holidays the population will swell to 100,000 +- with the

visitors to Elephant Butte State Park and Lake. Truth or Consequences has a population o

approximately 8,000. Also located in Sierra County are the small rural communities of Garfield, Derry

Arrey, Hillsboro, Kingston, Las Palomas, Williamsburg, Engle, Cuchillo, Hermosa, Winston, Chloride

Placita and Monticello. Elephant Butte NM, adjoins Truth or Consequences, New Mexico on the

northeast boundary of T or C.

The City of Truth or Consequences is the County seat and dominant market area in Sierra

County, NM. The City is estimated to have a current population of approximately 8,500. The economy

of the County depends largely on agriculture and tourism at Elephant Butte Lake State Park three miles

east of Truth or Consequences. Truth or Consequences was originally named Hot Springs. In 1950

NBC television and radio producer Ralph Edwards requested a name change from Hot Springs to the


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name of his nationally recognized Truth or Consequences radio program. The entire downtown area

of Truth or Consequences is located over a supply of hot mineral water, which is available at the surface

through wells or pools. Temperatures range from 98 to 115 degrees. In the early 1880s, businesses

arose around these mineral hot springs, which were locally considered medicinal for both mental and

physical healing. In addition to the several minerals within these waters, there is a small percentage oradium, which is considered by many as one of the most healing elements known. Even though a smal

percentage, the radium content is reportedly much higher than average.

Elephant Butte has a year round population of approximately 1,500. During weekend holiday

the population will swell to 100,000 +- with the visitors to Elephant Butte State Park and Lake.

Elephant Butte Lake is the largest lake within the State. This reservoir was primarily constructed during

four-year time frame (1912 1916) for irrigation purposes for surrounding farms and ranches. Elephan

Butte Reservoir heads a large network of dams, rivers and irrigation canals built to store and carry water

to approximately 115,000 acres of land, extending 200 miles along the Rio Grande from the reservoir in

Socorro County, through Sierra and Dona Ana Counties in New Mexico, as well as El Paso County

Texas. The project area reportedly extends from 100 miles northwest to 40 miles southeast of the City

of El Paso, with 88,000 acres of land in New Mexico and 67,000 acres in Texas.

In addition to the recreational amenities of Elephant Butte Lake, Caballo Lake State Park also

offers numerous aspects of outdoor recreation, and is located roughly 14 miles south of Truth or

Consequences. The park also hosts a reservoir with its original design capacity of 42,831 acre-feet o

water. It is one of a series of reservoirs created to control the erratic flow of the Rio Grande.

There are 8,880 acres of irrigated farmland and approximately 146 ranches with livestock in

Sierra County. The County has over a million and a half acres of grazing land, which is divided upamong both large ranches and modest spreads. Chile has become the major crop for farmers in Sierra

County. With this increase in crop production, processing plants have been developed in the Rio Grande

Valley near Truth or Consequences.

1. POPULATION

The city of Truth or Consequences is approximately 60% Anglo, 39% Hispanic and 1% other

ethnic groups. The ethnic mix gives the city a rich cultural heritage. Spanish and English are both

spoken as Truth or Consequences is a bilingual community.

At the heart of all demand is population. Sierra County experienced an approximate 33.9%

growth rate between census years 1990 and 2000, New Mexico as a whole experienced a growth rate of

20.1% percent for the same period. Estimated 2000 population for the county was estimated to be

13,270. City population of Truth or Consequences for census year 2000 was 7,289. Located directly

south of T or C is Williamsburg with a 2000 census population of 527. The following Table 3-1


28

indicates the T or C relative ranking in terms of population within the state. Table 3-2 illustrates the

population estimates for Sierra County 1970-2010.

TABLE 3-1 20LARGEST CITIES IN NEW MEXICO

City2000

Population

1990

Population

1980

Population

%Growth

1980-1990

1990/2000Growth

Rate

Albuquerque 448,607 384,736 332,920 15.56% 16.6%

Las Cruces 74,267 62,176 46,999 32.29% 19.4%Santa Fe 62,203 55,859 49,299 13.31% 11.4%

Roswell 45,293 44,654 39,676 12.55% 1.4%

Farmington 37,844 33,997 32,677 4.04% 11.3%Rio Rancho 51,765 32,505 9,985 225.54% 59.3%

Clovis 32,667 30,954 31,194 -0.77% 5.5%

Hobbs 28,657 29,115 29,187 -0.25% -1.6%

Alamogordo 35,582 27,596 24,024 14.87% 28.9%Carlsbad 25,625 24,952 25,496 -2.13% 2.7%

Gallup 20,209 19,154 18,167 5.43% 5.5%

Las Vegas 14,565 14,753 14,322 3.01% -1.3%Deming 14,116 10,970 9,964 10.10% 28.7%

Sunland Park 13,309 8,179 4,313 89.64% 62.7%

Portales 11,131 10,690 9,940 7.55% 4.1%Silver City 10,545 10,683 10,474 2.00% -1.3%

Artesia 10,692 10,610 10,385 2.17% 0.8%

Los Lunas 10,034 6,013 4,369 37.63% 66.9%

Lovington 9,471 9,322 9,727 -4.16% 1.6%

Socorro 8,877 8,159 4,313 89.17% 8.8%Grants 8,806 8,626 11,439 -24.59% 2.1%

Espanola 9,688 8,389 7,296 14.98% 15.5%T or C 7,289 6,221 5,412 14.95% 17.2%

Total 983,953 852,092 736,166 0.15747264 15.5%


29

TABLE 3-2 NMCOUNTYS POPULATION AND HOUSING 1970-2010

Although the population is continuing to slowly expand, the age distribution within the overal

population figures is changing and the median age is increasing. The changing age composition of the

population structure will have an effect on housing and commercial demand, but it is uncertain at this

time what that effect will be. The fastest growing age component of the population is the 45-75 agegroup. This age group historically has not been the prime home purchasing market, but may foster a

need for retirement units.

3. ECONOMY-INCOME AND EMPLOYMENT

Located on I-25 and the edge of Elephant Butte Lake the economy of Truth or Consequences has

historically been tied to tourism, transportation and agriculture. Employment figures for the town o

Truth or Consequences are reported as part of Sierra County. Based upon January 2013 employmen

figures that were released by the New Mexico Department of Labor, nonagricultural employment for the

county has remained stable with current employment of 6,060 persons while unemployment for Sierra

County is approximately 6.3%, which is below the 2012 figure of 7.3%. Statewide New Mexico

unemployment for the period is approximately 7.1%, down from 7.9% for the same period in 2012

Sierra County currently has one of the lowest unemployment rates of any county in New Mexico.

The following Table 3-3 indicates the relative slow rate of employment growth in Sierra County

from 2000 thru 2013.


30

Table 3-3 Annual Average Employment 2000-2013 Sierra County

.

D.

F E

><

F

% C

F

20002013

2013 5,962 5,634 328 5.50% 3.33% 10.82%

2012 5,770 5,408 362 6.27% 1.40%

2011 5,852 5,475 377 6.44% 1.20%

2010 5,923 5,555 368 6.21% 0.50%

2009 5,953 5,641 312 5.24% 0.83%

2008 5,904 5,663 241 4.08% 6.19%

2007 5,560 5,378 182 3.27% 3.02%

2006 5,397 5,162 235 4.35% 0.50%

2005 5,424 5,131 293 5.40% 1.16%

2004 5,362 5,048 314 5.86% 0.62%

2003 5,329 5,031 298 5.59% 0.41%

2002 5,351 5,063 288 5.38% 0.54%2001 5,380 5,126 254 4.72% 1.61%

2000 5,295 5,060 235 4.44%

During the summer months the population within the T or C and Elephant Butte market area

increases dramatically due to the recreational attraction of Elephant Butte Lake. On the primary holidays

such as the 4thof July and Labor days the population will increase to more than 100,000 persons. The

annual attendance approaches 1.8 million.

Although the nature of the economic base of the community tends to protect it somewhat from

down swings in the national economy, there is a cost. Table 3-4 indicates the median income of the 50

US States. New Mexico ranks in the lower 25% but also ranks third among states with the fastest per

capita income growth over the previous five years and first among southwestern states.

The community, as a result of the generally low household income as a whole is price sensitive

This in turn leads to price competition in all sectors of the local economy. The result is a lower than

average cost of living in the community. This lower cost of living including housing, commercia

services and property taxes is seen as an attraction to those planning on moving from other parts of the

country.


31

Table 3-4 Median Incomes U.S. 2010

United States 50,740a ama ,as a ,

r zona ,r ansas ,a orn a ,o ora o ,onnec cu ,e aware ,s r c o o um a ,or a ,eorg a ,awa ,a o ,no s ,

n ana ,owa ,

ansas ,en uc y ,ou s ana ,a ne ,ary an ,

,c gan ,nneso a ,ss ss pp ,ssour ,on ana ,e ras a ,eva a , ,

ew ersey ,

ew ex co ,ew or ,or aro na ,or a o a ,o ,a oma ,

,ennsy van a ,o e s an ,ou aro na ,ou a o a ,ennessee ,

,a ,

,rg n a ,as ng on ,es rg n a ,scons n ,yom ng ,

,

State Median

income

Source: U.S. Bureau of Economic Analysis


32

5. CLIMATE

The climate of Truth or Consequences is semi-arid which provides for very mild winters and hot,

dry summers. Truth or Consequences has an average daily high/low temperature of 74 and 46 degree

and an average rainfall of 12.0 inches annually. Mild climate is a major appealing factor to many retired

citizens of the community and others that may be contemplating moving to the area.6. GOVERNMENT

The governments of Elephant, Truth or Consequences and Sierra County are similar to most

communities in New Mexico. The Cities of Elephant Butte and Truth or Consequences have a mayora

form of government with a City Council. The five member City Council is elected as is the mayor. The

County is run by an elected county commission consisting of three members.

7. UTILITIES

Following is a list of utility suppliers to the residents of Sierra County.Electricity City of T or C/ Sierra Electric Coop

Natural Gas Gas Company of New MexicoWater City of Truth or Consequences/GarfieldWater Assoc./

Lakeshore/National Utility Company/ Rincon WaterSewers City of Truth or Consequences & Elephant ButteTelephone Windstream, VerizonSanitation City of Truth or Consequences

8. HOUSING

Housing is relatively affordable in the community. Housing as compiled from the 2010 Censu

included 8,356 dwelling units. The median value of an existing single family home is approximately

$130,000. Conversations with city personal indicate a reasonably active commercial building marke

with several new projects having been completed during 2005-2013 and several new projects currently

under construction.

9. SCHOOLS

The Truth or Consequences Public School System 2012 enrollment was approaching 2,000

students. The Truth or Consequences School System consists of.

A) One high schoolB) One middle schoolC) Two elementary schools

Also located Truth or Consequences Western New Mexico University distant learning center

which offers several college credit courses per semester. Located within commuting distance in Las

Cruces New Mexico is New Mexico State University.


33

10. TRANSPORTATION

Transportation in and out of Truth or Consequences is good with Interstate 25 (north-south) at its

center. Greyhound Bus Lines provides passenger service to and from Truth or Consequences. The

nearest major commercial air service available to Truth or Consequences is located in El Paso, TX

approximately 120 miles south and Albuquerque approximately 130 miles north. Currently no locapublic transit system is available to Truth or Consequences residents.

11. MEDICAL FACILITIES

Located within the community of Truth or Consequences is Sierra Vista hospital with 43 beds

emergency room and skilled nursing unit. Sierra Vista Hospital provides helicopter ambulance service

to both Las Cruces and Albuquerque hospitals. Also located in the community is the Ben Archer Health

Center, Sierra Health Care Center nursing home with 110 beds and the New Mexico Veterans Home

with 170 beds. The nearest regional hospitals are located in Las Cruces, NM approximately 80 miles

south and Albuquerque which is approximately 140 miles north. Sierra Vista Hospital provides

helicopter ambulance service to both Las Cruces and Albuquerque hospitals.

12. RECREATION

Truth or Consequences municipality provided sports facilities include baseball and softbal

fields, basketball courts, and picnic areas. Located just east of the city is Elephant Butte Lake State Park

with over one million visitors in 2013. Other travel destinations located within a one hour drive of the

city are Caballo Lake and Percha Dam State Parks, Gila National Forest and Bosque Del Apache

National Wildlife Refuge.

13. CHURCHES

Most major denominations are available to serve the religious preferences of the community.

14. MORTGAGE MARKET FACTORS

Located within the city are four banks and one savings bank. The local lending institutions have

sufficient deposits to handle the level and nature of growth predicted for the area. Existing local lender

are considered to be in good financial shape. One reason is the diversified nature of the loca

commercial loan portfolio.

In the Truth or Consequences market area, most business tend to be small and locally owned

These small, locally owned businesses are entrepreneurial responses to the increasing population and its

varied demands. These small businesses do not require a great deal of space. Hence, there are numerousmall commercial buildings for retail and office space. The underlying loans are individually relatively

small and the total is well diversified.

The local mortgage market for residential as well as commercial and other type of loans until

recently has been rather isolated from the volatility in the national and international markets. However

local lenders have been forced, as a result of competition and liquidity requirements, to become more

integrated with secondary market operations. Local lenders are now adept at pooling mortgages fo


34

resale in the secondary markets and using pools of residential and commercial mortgages for the

collateralization of securities sold in the capital markets. As a result of this activity, local interest rate

move with the same volatility as they do in the national and international capital markets.

15. NEW COMMUNITY DEVELOPMENTS

The New Mexico Spaceport America

In 2006 two studies commissioned by the New Mexico Economic Development

Department reported their findings. The reports were similar in their observations and projections. One

of those studies conducted by the Arrowhead Center at New Mexico State University reported that by

the fifth year of operation, the spaceport would sustain close to $1 billion in new revenues creating

approximately $350 million in new payroll and generating over 4,970 new jobs. For Sierra County this

provides dramatic growth potential. Truth or Consequences/Elephant butte is the metropolitan area

closest to the Spaceport and despite the smaller community size, and a reasonably estimate is that 40%

of the holders of new jobs would choose to live in Sierra County because of the nearness to the job site

and recreational amenities available. Based on an estimated total of 4,970 new jobs by 2016 this

percentage would equate to approximately 1,988 new jobs in Sierra County. Given an historic

employment to population ratio of 2.6 this would result in a population increase of 5,168 m/l due to the

Spaceport alone. Forty percent of the new jobs related to building and road construction, i.e., (992) could

similarly add 2,579 additional persons during the 2014/2020 period.Super Wal-Mart

In December 2005 Wal-Mart announced plans to construct a Super Store near Exit 79 on I-25 in

Truth or Consequences. This represented a $30 million, 110,000 square foot facility, constructionproject. The facility is now in operation and has added over 300 new jobs (Est. 780 increase in

population) and significantly increased GRT.Hot Springs Land Development

The Hot Springs Land Development, LLC is expected to bring economic development to New

Mexico and Sierra County through the combined economic strength of Spaceport America support

industries, auto racing, business aviation, national security and associated R & D activities along with

residential development. HSLD has identified a logistical opportunity to create a permanent industria

complex to include shops, garages, parts warehouses and tracks for testing and education to support all

races west of the Mississippi as well as support and supply facilities for the developing Spaceport

America. Currently nearly 7,388 acres, or about 12 square miles bracketing Interstate 25 have been

assembled for the express purpose of the HSLD PUD. The appraiser estimates of employment in the

development will be on the order of 2,500 with a population of 16,000 +_ in the next 25-30 years. The

necessary land swaps and leases between the State, BLM and the County have been completed and

development could be expected to begin in late 2016 to mid 2017.


35

Illustrative Development Plan for HSLD

Sierra Del Rio Resort and other Developments

Sierra Del Rio Resort is being developed on over 1,049 acres of land in Elephant Butte. An 18

hole championship golf course intended by the development company to be the premier golf experience

in New Mexico. Lots range in prices from $47,000 to $250,000. Approximately 120 lots have been

sold. Approximately 75% of the buyers are from out of the area. At the present time approximately a

dozen homes have been started surrounding the operating golf course.

Sierra Vista Hospital Replacement Facility Project

The Hospital Board and community leaders are actively working towards the funding of a new

$28,000,000 hospital facility that will replace the existing facility on a 15 to 20 acre site. Construction

on the new emergency facility and physical is to begin in the second quarter of 2014.

Truth or Consequences Community Golf Course Expansion and other Developments The City of Truth or Consequences is currently planning for the expansion of its nine-

hole community course to 18 holes.

There are several small retail/office centers in the planning process.

An expanding art community is rejuvenating the downtown area of Truth or

Consequences.


36

Lake levels although low are continuing to bring in more recreational visitors and

permanent residents that are attracted to the lake.

The County airport is scheduled for expansion.

New Hot Springs Retail Center the location of Wal-Mart is also the location of a newly

developed Holiday Inn Express. A copper mine is in the process of opening near Hillsboro with an initial investment in

excess of $300,000,000. Operational in late 2015 early 2016.

An alge/biofuel plant is being planned for developed for $250,000,000 over the next

three to four years near Spaceport America.

A new motel is being discussed for construction that is to be leased by Virgin Galactic

for its space clients.

The 6,000 sf Spaceport Welcome Center located in T or C is to begin construction in late

of 2015 within the Hot Springs Retail Center.

Ted Turner recently purchased the Sierra Grande Lodge in anticipation of future

developments.

There is clear evidence that the new developments are having an effect on the market place and

generating effective demand for the subject. The City of Truth of Consequences is a gateway city for the

States $210M Spaceport and Virgin Galactic space tourism operation. Recently the Governor of NM

while in T or C, signed the informed Consent Legislation into Law. This widely anticipated legislation

is already creating opportunities for both commercial and residential expansion in the area as a result of

Spaceport Americas need for supply chain contractors who do not currently have a presence in the area

In addition to this it has been confirmed that the near term construction of two major employers in thearea as outlined above will require housing and support business structures for professional engineers

and high end technical personnel. These companies include the Copper Flat Mine and an alternative Bio

Fuel production plant and refinery in Sierra County. These two companies alone may provide an

additional 250 + high net technical and engineering jobs in Sierra County in the immediate future.

Changing Real Estate Market Demand

The housing demand and supply in Sierra County appeared to be in reasonable balance during the

period 01/01/02 through 01/01/04. However, from 2004 through 2009 the market shifted upward. The

Sierra County Multiple Listing Service (of which this appraiser is a member) indicated total residentia

sales during 1/1/2002-12/31/2006 of 994 out of which 523 were site built, 432 manufactured housing

and 39, one to four family. The median price of all sf site built sales in 2002 was $62,356, by the end of

2008 this figure has risen to $133,505. In 2009 the figure dropped to $130,027 but jumped in 2011 to

$165,000. The following Table 3-5 illustrates the changes in total sales as well as residential sales

Brokers have reported that the drop in single-family sales in 2006-2008 was not due to demand but

rather the lack of supply on the market that was available to sell. However, 2009 also saw a drop in


37

demand which has continued thru 2013. For 2013 the figure was 210 DOM. The year 2013 saw a further

decline in the real estate market sales. The actual number of total sales in 2013 was only 26% of the total

sales in 2006.

Additionally total sales in 2013 of 8,565,370 represent the lowest volume of sales passing

through the MLS since 2002. Any increase in 2014 is generally believed to be tied to the development ofSpaceport America.

TABLE 3-5HOUSING SALES 2002--2013

Year

Total # of

all MLSSales

Total #

ResidentialSales

SF Site

BuiltDwelling

MfgHousing

multifamily

Avg Sale

Price SiteBuilt

% Change inAvg Price

2013 94 74 36 44 0 $124,371 -2.91%

2012 130 96 52 44 0 $128,102 -22.36%

2011 76 40 19 21 0 $165,000 23.57%

2010 87 66 31 35 0 $133,531 2.69%

2009 141 118 60 57 1 $130,027 -2.61%2008 210 162 92 66 4 $133,505 19.91%2007 276 203 114 81 7 $111,334 2.39%2006 400 104 104 103 10 $108,733 -7.74%2005 342 243 135 101 7 $117,860 18.09%

Although it is impossible to determine with a great deal of specificity at this time as to what the

newly developing economic environment in Sierra County will bring in terms of population and income

growth it is speculated that growth will occur at a rate not historically seen in Sierra County. This

impending growth rate can be seen in the surge of real sales in the last few years leading up to 2006. As

the overall local economy slumped in 2007-2013 so did real estate sales. Based on data through

December 2013 real estate sales were nearly 73% below 2006.

TABLE 3-6TOTAL REAL PROPERTY $SALES SIERRA COUNTY 2002-20132013 2012 2011 2010 2009 2008 2007 2006 2005 2004

Residential $6,563,570 $9,306,970 $4,990,619 $7,392,673 $12,337,900 $22,687,287 $21,377,713 $18,045,670 $20,320,780 $12,271,650

Land $953,800 $485,250 $697,300 $944,900 $1,356,500 $3,571,706 $4,628,750 $6,619,148 $3,187,010 $771,040

Comm-Ind $923,000 $1,248,000 $4,168,450 $235,500 $580,000 $1,200,000 $2,811,900 $6,215,552 $2,138,250 $981,500

Multi-Family $125,000 $0 $0 $0 $240,000 $465,000 $376,200 $1,629,000 $366,000 $886,000

Total Sales $8,565,370 $11,040,220 $9,856,369 $8,573,073 $14,514,400 $27,923,993 $29,194,563 $32,509,370 $26,012,040 $14,910,190

% -22.42% 12.01% 14.97% -40.93% -48.02% -4.35% -10.20% 24.98% 74.46% 2.56%

The following Table 3-7 illustrates the deposit base of the Countys banks and provides another

indicator of the communitys economic growth. It can be seen that the total deposit base has fluctuated

over the last ten years from between $80,598,000+- to $121,400,000 +-. Although there are variations

there is a slow but discernible upward growth of approximately 2.83% per year. During the period

6/30/2011 to 6/30/2013 total deposits in local banks increased by a significant 11%.


38

TABLE 3-7 DEPOSITS BY BANK-SIERRA COUNTY,NM6/30/00TO 6/30/13

Deposits/Bank Name

Bank of the

Southwest

(State Nat ional) to

Compass First Savings Citizens Bank Total % Change

Deposits 6/30/2013 $59,608,000 $17,230,000 $25,372,000 $19,200,000 $121,410,000 3.99%

Percentage 49.10% 14.19% 20.90% 15.81% 100.00%

Deposits 6/30/2012 $56,713,000 $20,360,000 $22,297,000 $17,386,000 $116,756,000 6.99%

Percentage 48.57% 17.44% 19.10% 14.89% 100.00%

Deposits 6/30/2011 $51,637,000 $23,539,000 $21,818,000 $12,133,000 $109,127,000 -1.89%

Percentage 47.32% 21.57% 19.99% 11.12% 100.00%

Deposits 6/30/2010 $51,113,000 $25,216,000 $22,567,000 $12,329,000 $111,225,000 15.29%

Percentage 45.95% 22.67% 20.29% 11.08% 100.00%

Deposits 6/30/2009* $42,525,000 $27,500,000 $18,768,000 $7,682,000 $96,475,000 -0.82%

Percentage 44.08% 28.50% 19.45% 7.96% 100.00%

Deposits 6/30/2008 $39,717,000 $38,421,000 $19,136,000 $97,274,000 9.73%

Percentage 40.83% 39.50% 19.67% 100.00%

Deposits 6/30/2007 $39,587,000 $31,249,000 $17,811,000 $88,647,000 -6.62%

Percentage 44.66% 35.25% 20.09% 100.00%

Deposits 6/30/2006 $42,615,000 $33,609,000 $18,705,000 $94,929,000 7.97%

Percentage 44.89% 35.40% 19.70% 100.00%

Deposits 6/30/2005 $39,731,000 $32,565,000 $15,626,000 $87,922,000 4.58%

Percentage 45.19% 37.04% 17.77% 100.00%

Deposits 6/30/2004 $39,288,000 $30,421,000 $14,366,000 $84,075,000 0.90%

Percentage 46.73% 36.18% 17.09% 100.00%

Deposits 6/30/2003 $39,629,000 $29,008,000 $14,685,000 $83,322,000 3.38%

Percentage 47.56% 34.81% 17.62% 100.00%

Deposits 6/30/2002 $38,465,000 $29,035,000 $13,098,000 $80,598,000 -5.29%

Percentage 47.72% 36.02% 16.25% 100.00%

Deposits 6/30/2001 $41,833,000 $30,146,000 $13,117,000 $85,096,000 -1.38%

Percentage 49.16% 35.43% 15.41% 100.00%

Deposits 6/30/2000 $40,849,000 $31,558,000 $13,877,000 $86,284,000

Percentage 47.34% 36.57% 16.08% 100.00%

Average $ $47,946,923 $30,758,231 $19,326,385 $5,286,923 $103,318,462

Average % 46.41% 29.77% 18.71% 5.12% 100.00% 2.83%

It is the appraisers opinion, based on the known developments mentioned above and the curren

expected expansion, as well as a review of Chamber of Commerce inquiries, gross receipts tax, lodgers

tax, utility connections, bank deposits, and other indices, that the historic population annual growth rateseen above will move from current levels up to a reasonable estimate of 3% during the period 2014 to

2020 and 4% from 2020 to 2030. This rate is also less than but consistent with a recent study conducted

by SMPC Architects for the Sierra Vista Hospital Replacement Facility Project. The following Table 3-7

reflects these projections.


39

Table 3-8 1980-2030 Sierra County Pop. Projections at 3% to 4% 2011- 2030

The above Table although general in structure indicates that in Sierra County proper, during the

period 2011 through 2030 annual household formations could increase from 144 in 2011 to 367 in 2030

Each household formation will require an additional dwelling unit of some type to be added to the Sierra

County housing stock. The impact on the subject should be that the subject should maintain its

competitive position within the commercial land market as there does not appear to be any negative

Year Population Total Annual Annual

Projection H ousehold Household P opulation

F ormations F ormations Increase1980 8,454 3,0191981 8,589 3,068 48 135

1982 8,727 3,117 49 137

1983 8,866 3,166 50 1401984 9,008 3,217 51 142

1985 9,152 3,269 51 1441986 9,298 3,321 52 146

1987 9,447 3,374 53 149

1988 9,598 3,428 54 1511989 9,751 3,483 55 153

1990 9,907 3,538 56 1561991 10,003 3,705 35 95

1992 10,099 3,740 36 96

1993 10,196 3,776 36 971994 10,294 3,813 36 98

1995 10,393 3,849 37 991996 10,493 3,886 37 1001997 10,594 3,924 37 101

1998 10,696 3,961 38 1021999 10,799 4,000 38 103

2000 10,903 4,038 38 1042001 11,008 4,077 39 105

2002 11,114 4,116 39 106

2003 11,220 4,156 40 1072004 11,328 4,196 40 108

2005 11,437 4,236 40 1092006 11,547 4,277 41 110

2007 11,658 4,663 44 111

2008 11,771 4,708 45 1122009 11,884 4,754 45 113

2010 11,998 4,799 46 1142011 12,358 4,943 144 360

2012 12,729 5,092 148 371

2013 13,111 5,244 153 382

2014 13,504 5,402 157 393

2015 13,909 5,564 162 405

2016 14,326 5,731 167 417

2017 14,756 5,903 172 430

2018 15,199 6,080 177 443

2019 15,655 6,262 182 456

2020 16,125 6,450 188 470

2021 16,770 6,708 258 645

2022 17,440 6,976 268 6712023 18,138 7,255 279 698

2024 18,863 7,545 290 726

2025 19,618 7,847 302 755

2026 20,403 8,161 314 785

2027 21,219 8,488 326 816

2028 22,068 8,827 340 849

2029 22,950 9,180 353 883

2030 23,868 9,547 367 918

Rate of Growth 1.01599 to 1990

Rate of Growth 1.00962 to 2010

Rate of Growth 1.03 2011--2020

Rate of Growth 1.04 2021-2030

HH Size 2.8 to 1990

HH Size 2.7 to 2006

HH Size 2.5 2007 to 2030


40

external factors within the real estate market that would impact its locational attributes, nor are there any

new development that would impact on its competitive position.

Additionally it should be noted that there is another employment/population scenario that is

based on very likely and known conditions that are scheduled to develop within the next 12-24 months

and that is the final development of the Spaceport and its welcome center in T or C, the ongoingdevelopment of Copper Flat Mine, the initial phases of the Bio Fuel Plant, the new emergency room and

physical plant at Sierra Vista Hospital as well as related developments. Table 3-9 below illustrate the

potential impact on employment and population within the County as these commercial developments

come on line. The associated population projections are based on an historic employment to population

ratio of .42 which is also what it was in the 2010 census. It is unknown if this ratio will hold at the

margin but is likely to be consistent with long run projections. New housing requirements are based on a

household size of 2.75 persons. Bear in mind that the high point in historic employment in the County

was in July of 2010 with an labor force of 6,256 and total employment of 5,885 according to NMD of

Workforce Solutions-Economic Research and Analysis.

TABLE 3-9 SIERRA COUNTY EMPLOYMENT/POPULATION PROJECTIONS 2013--2020/ 2014 2015 2016 2017 2018 2019 2020

C F 50 100 150 50 0 0 0

B F 50 100 150 25 0 0 0

A & 50 100 160 200 250 300 350

10 10 10 10 12 12 12

10 10 10 10 12 12 12

5 5 5 5 5 5 5

E 175 325 485 300 279 329 379

E(D 2000 5408) 5583 5908 6393 6693 6972 7301 7680

A C 1.00% 5.82% 8.21% 4.69% 4.17% 4.72% 5.19%

E (.42 /) 13,293 14,067 15,221 15,936 16,600 17,383 18,286

C 5.82% 8.21% 4.69% 4.17% 4.72% 5.19%

The following Section IV presents details of the subject site.


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Section IV

Site Data


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SECTION IV SITE DATA1. SITE DESCRIPTION

The subject is located in the northern business district of Truth or Consequences in the SEC of

the intersection of Nth Date Street and I-25. The site is generally rectangular with observed elevationvariations of 10 more or less in some areas. The entire property is within the New Hot Springs Retail

Center and adjoins the Super Wal-Mart site on its East and Interstate 25 on its West. To the immediate

North and South are undeveloped parcels. The entire site is within the City limits of Truth or

Consequences. The original HSRTC development is broken into five phases. Phases 1 through 4 are on

the north end of the tract while Phase 5, a 26 +- acre tract, is on the south side of the area and sits

approximately 12 to 15 feet higher in elevation. The north portion of the subdivision is platted and

approved and broken into Blocks and Lots. The subject is on the SWC of the Northern portion.

2. TOPOGRAPHY AND SOILS

The subject in its natural state is made up almost entirely of high mesa desert grazing lands with

sparse vegetation and six to eight inches of rain fall per year. The animal unit grazing allotment i

typically 6 to 7.2 per section (640 acres). The undulating and shifting elevation of the topography of the

site is common to the region and surrounding land uses. The region is generally undulating to steep

slopes with mild rock outcroppings and generally sloping towards the east and south into natural arroyos

that ultimately wind their way to the Rio Grande to the east. The soil is typical for the area and should

pose no problem for future improvements. Discussions with the US Soil Conservation Service indicates

that no comprehensive soil survey of Sierra County has been made.

3. DRAINAGE FEATURES AND FLOOD ZONE

The area drains naturally to the east and south into undeveloped natural drainage areas extending

through natural arroyos to the Rio Grande. However, the developer has equipped the subdivision with a

fully functioning underground storm water system that drains the entire area. The drainage appears to be

adequate and poses no problems to further development. The site is not in a FEMA hazardous flood

zone. See the flood map in the preface.

4. UTILITIES AND ACCESS

The area is within the City limits of Truth or Consequences and is serviced with City power, via

overhead power lines and underground through the subdivision. Power is underground to the lots. Sewer

will be by City sewer. Water is provided by City water. Gas is provided by New Mexico Gas Company.

Current access to the site is via North on Date Street to H.R. Ashbaugh Drive then West to

Sanford Wilson Rd. The site is located on the NWC of H.R. Ashbaugh Dr and Sanford Wilson Road


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The regional access is easily available from I-25 Exit 79 to the immediate north from which the

proposed visitor center building will be imminently visible from I-25 both North and South Bound.

5. SETBACKS AND EASEMENTS

There are no unusual setbacks, easements or encroachments on the deeded acres noted on the platat the County Assessors Office, nor were any observed. However, there are utility easements as well as

covenants and deed restrictions put in place to maintain the quality and architectural styles and values of

the area.

6. SURROUNDING IMPROVEMENTS

The surrounding land uses to the North and East of the subject are all commercial activities

consisting of an existing Wal-Mart, three motels as well as restaurant and auto fueling stations. To the

SE of the site is a high school and public golf course. To the West across I-25 and the immediate south is

vacant land. There are no negative external factors resulting from the immediately surrounding land

uses.

7. PROPERTY TAXES

The following Table 4-1 is a breakdown of the subject propertys assessed and market values for

the subject land as determined by the Sierra County Assessors office for the 2013 tax year. The

subdivided parcels 1 and 2 of the 8.81 acre lot have yet to be assessed separately by the County

Assessors office.

TABLE 4-1SUBJECT PROPERTY FULL AND TAXABLE VALUE 2013

D A. B

A'

F

E

2013

AC C. 18179 B 1 2 0.45 19,602 C $63,939 $21,313 $520

AC C. 18181 B 3 1A 0.98 42,689 C $137,496 $45,832 $1,118

AC C. 18182 B 3 2A 0.83 36,155 C $116,751 $38,917 $949

AC C. 18981 B 4 1 0.534 23,261 C $74,475 $24,825 $606

AC C. 18987 B 4 2 0.534 23,261 94 2659 $74,619 $24,873 $607

AC C. 18988 B 4 3 0.534 23,261 C $74,499 $24,833 $606

AC C. 18989 B 4 4 0.534 23,261 94 2659 $74,400 $24,800 $605

AC C. 18990 B 4 5 1.892 82,416 94 2659 $263,706 $87,902 $2,144

.. 18991 B 4 6 2.491 108,508 94 2659 $347,241 $115,747 $2,823

AC C. 18992 B 4 7 0.408 17,772 94 2659 $28,434 $9,478 $231

AC C. 16585 2,E4,28,13, 4 8.81 383,764 102 1659 $654,555 $218,185 $5,322

AC C. 18008 28,13, 4 26.93 1,173,071 106 130 $411,978 $137,326 $3,350

44.927 1,957,020 $1,910,115 $636,705 $18,881


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These taxes are reasonable and in line with other commercial properties and undeveloped land in

the same area. All the taxes are current.

8. IMPROVEMENT ANALYSIS

Paved access roads have been constructed and power, gas, sewer and water are to each lot lineand immediately available to the larger tracts. A drainage plan is in place and an underground storm

water system is on site.

9. ENVIRONMENTAL CONSIDERATIONS

The appraiser has made a personal inspection of the site and did not uncover any apparent signs

of hazardous materials. Hazardous materials may or may not be present on the site, but the appraiser i

not qualified to detect such substances. The presence of substances such as asbestos, urea formaldehyde

foam insulation, leaking oil or gas tanks, or other potentially hazardous materials may effect the value of

the property. The value estimate is predicted on the assumption that there is no such material on or in

the property that would cause a loss of value. No responsibility is assumed for any such conditions o

for any expertise or engineering knowledge required to discover them. The client is urged to retain an

expert in this field, if desired.

The following Section V discusses the market environment of the subject and its relative position

within the commercial land market within the County and T or C.


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Section V

Valuation


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SECTION V - VALUATION

The following Section V develops the reasoning and methodology utilized in arriving at a

determination of highest and best use and a valuation conclusion for the subject commercial parcel.

1. HIGHEST AND BEST USE

Highest and best use of land is defined as "The reasonably probable and legal use of vacant land

or an improved property which is physically possible, appropriately supported, financially feasible, and

that results in the highest value." (The Appraisal of Real Estate, Tenth Edition, 1992.) In order to

estimate the highest and best use, there are essentially four points of analysis. These are as follows:

I. Physically Possible Use of the Site - What uses are physically possible, given the size,shape, and topography and location of the site?

II. Legally Permissible Uses of the Site - among the physically possible uses, what usesare legally allowed given the zoning, easements, and deed restrictions?

III. Financially Feasible Uses of the Site - among the uses, which are physically possibleand legally permissible? What uses would provide a reasonable residual net return tothe land?

IV. Most Productive Use of the Site - among the financially feasible uses, which usewould result in the greatest net return to the land?

PHYSICALLY POSSIBLE USES

Constraints imposed on the possible use of the property relate to the physical aspects of the site

itself. The size, shape, topography, and physical location influence ultimate development. The physica

aspects of the property would allow a multitude of possible uses. Given the physical location of the

property and its proximity to Date Street and I-25 as well as nearby commercial development, only

commercial uses are physically probable.

LEGALLY PERMISSIBLE USES

The subdivision is zoned C-1 Commercial. Legal restrictions as they apply to the subject are thecommon restrictions of utility easements, public zoning ordinances, and deed restrictions. The subjec

site is an existing platted commercial subdivision. Restrictions prohibit mobile home, industrial

commercial or residential uses. All lots are encumbered with deed restrictions and protective covenants

The main thrust of the restrictions and covenants is to provide a legal framework for the preservation

maintenance, and control of the character of the development. The restrictions and covenants are


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beneficial in protecting the development character and future property values for a commercia

subdivision. The restrictions are assumed to be in conformity with the sites existing zoning and

development plan. The possible permissible uses for the subject tract are retail/commercial. Therefore

the only physically and legally possible use of the site is as a commercial/retail/office development.

FINANCIALLY FEASIBLE USES

The financially feasible uses of the site are restricted to those that are physically possible, legally

permissible and that produce a positive economic return to the land. The most probable financially

feasible use of the site is for commercial development. Of the legally permitted uses that would be likely

users of the site, the most probable one that would have market acceptance at that site and not be

restricted by the current supply of existing similar activities, is a retail/office facility catering to the

traffic on Date Street and Interstate 25. Note worthy is the fact that Wal-Mart and Holiday Inn Express

have already located within the commercial subdivision. Given the reality of the development of

Spaceport America located 35 miles south and the current activities of Virgin Galactic and Space X a

well as the expressed desires of other space related firms locating their businesses at the Spaceport

together with the national and international interest in Spaceport America it highly likely that the

projected number of visitors to the proposed facility would make it a financially feasible use

Additionally studies that have been commissioned by the Spaceport Authority have demonstrated that

the financial feasibility of the Spaceport Welcome Center as proposed on the subject site is positive.

MOST PRODUCTIVE USE OF SITE AS THOUGH VACANT

The most productive use of the site as though vacant is the physically possible, legally

permissible, and financially feasible use that would return the highest net return to the land. The site as

proposed to be developed fits the criteria of highest and best use. The most logical financially feasible

use of the site is as proposed i.e., the future site of the Spaceport America Welcome Center.

2. VALUATION METHODOLOGY

The subject land is valued according to the determined highest and best use, i.e., the future site of

the Spaceport America Welcome Center. Comparable sales analysis is employed in the determination o

the retail market value of the commercial six acre on a sf basis. The analysis uses the average lot sale

contract prices of available recent commercial lot sales within the subject neighborhood both outside and

inside of the subjects commercial subdivision. The average psf retail value serves as the base retail sale

price used to determine the market value of the subject.


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3. COMPARABLE SALES ANALYSIS

The Sales Comparison or Market Approach is based upon the principle of substitution. The

process produces an estimate of value of the property by comparing it with similar properties of the same

type, class, and location that have sold recently or are currently offered for sale in the same or competing

areas. The process of comparison involves judgment concerning their similarities with respect to severafactors such as location, physical condition, terms of sale, and conditions of the subject property. The

comparable sales are compared to the subject property and ranked as equal, superior or inferior to the

subject. Qualitative adjustments are then made to the sale prices for differences between comparables

The value range as indicated by the final adjusted sale price is then correlated into a final indicated value

for the subject property. The common denominator of the dollar sale price per square foot is used as uni

of comparison.

A search of the current commercial land sales in the area turned up several representative

comparables that are appropriate and that are used to assist the appraiser in forming his opinion of value.

The following is a descriptive list of the comparables used in the analysis. The comparable sales that are

used reflect the demand side of the market while the active listings are proxies for the supply side of the

market. Figure 6-1 illustrates the location of the comparables and Table 6-2 demonstrates adjustments to

their prices.

FIGURE 6-1 LAND SALE COMPARABLES LOCATION MAP


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COMPARABLE LAND SALE #1 1920NDATE STREET TOR C

Date of Sale: August 2009 Recording: Sierra CountyGrantor: Neudecker Grantee: Citizens Bank Agent: NASale Price: $750,000/ $14.50 psf//Additional development cost demolition $28,000,Size: 1.187 Ac./ 51,724 SF

Terms: Cash Zoning: C1Location: NWC of Date Street and New School RoadComments: Level site of Dairy Queen and Car wash purchased for land only. Demolition and dirt work

required.Flood zone: XUtilities: Power , Water, Sewer to site.Intended Use: New Citizens bank developmentConfirmed By: Grantee

COMPARABLE LAND SALE #2 CBDAUSTIN STREET

Date of Sale: 8/20/2009 Recording: MLS 20104741Grantor: Grinsted Grantee: NA Agent: Susan LoweSale Price: $96,000/ $12.96 psf//Size: .17 Ac./7,405 SFTerms: Cash Zoning: C1Legal Description: blk 8 lot 27, 28, e2 of lot 29 Palomas HotspringsLocation: Austin between Foch and Daniel. South side of Austin middle of block.Comments: Commercial Small lot level all utilitiesFlood zone: XUtilities: Power , Water, Sewer to site.Intended Use: Parking or commercial developmentConfirmed By: MLS 20104741/ agent

COMPARABLE LAND SALE #3 NWC3RDAND DATE ,TOR C

Listing: 7/2014 Source: Grantor

Grantor: Anderson Grantee: NASale Price: $450,000, $ 10.76 psf Size: .9599Ac./ 41,816 sq. ft.Terms: Cash to Seller Zoning: C-1Legal Description: Lots 11-12 Block 63 La Vista AdditionLocation: East Side of Date Street, Signaled intersectionComments: Level all util

7/14 Spaceport TorC Visitors Welcome Center LAND appraisal!

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