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2065 West POSADA
MESA, AZ 85202
Messrs A. A. McCollurn, Chairman
and Keith Faber, President
Greenway Environmental Services, Inc.
644 E. Southern Avenue, Ste. 110
Mesa1 Ari~ona 85204
Gentlemen:
Your company has engaged me to conduct a Review Appraisal on the property known as J.F.K. College in Wahoo, Nebraska, the legal description of which is Lots 1 through 8 inclusive, Kennedy College Subdivision on to the City of Wahoo, Nebraska and the North half of Block 1 and all of Block 2, Dickinson's addition to the City of Wahoo, Saunders County1 Nebraska.
As stated by you, my mission was to review carefully the appraisal dated September 30, 1988 as prepared and submitted by L. W. Hensrud, conduct such independent verification as I deemed appropriate, suggest any modifications to his findings as were indicated and report the results to you.
Research of the County Records reveal that title to the aforedescribed property is vested in Greenway Environmental Services Inc., a Nevada Corporation, that there is a First Deed of Trust in the amount of $500,000 recorded in favor of Thomas J. Widlar, a single man, plus a construction lien placed thereon by the city of Wahoo in the amount of $3,406.12 and that county taxes for the year 1994 in the amount of $5,201.56 plus interest are delinquent.
The demographic data in the Hensrud report remains generally accurate with the exception that modest growth in population amounting to approximately 9-10% has occurred since it was written. However, the following comments, gleaned from local banking and municipal sources should be noted as they have a significant impact on the value of the property if it is converted into the suggested uses. Included in these findings is the fact that Wahoo has an aging population. Farmers retiring create a housing demand as yet unfulfilled. Additionally, because of its small town character, including its virtual crime free environment, Wahoo provides a desireable area for retirees from nearby Lincoln and 0n'aha. The College campus is only 2 blocks from a good general hospital whose professional staff is augmented by weekly visits by specialists from both Lincoln and Omaha. These include Cardiologists, Opthomologists, Orthopedic surgeons as well as others. Furthermore, the new expressway bypassing Wahoo will be directly accessible from the Campus, making commutation time to or from Lincoln and Omaha even shorter. All of this augurs well for converting the existing campus facilities into a complex designed to serve the needs of geriatric housing and care. These facilities should include a nursing home, a congregate living unit and some high density retirement quarters.
The Hensrud report is thorough. Values derived are justified. Rep1acement costs as tabulated in his "Cost Approach" analysis, however, should be increased substantially because of the inflation caused by increased costs of labor and material. Thus, the $2,954,908, if a factor of 5% per year is employed, would increase by $1,034,217 to a total of $3,989,125. No attempt has been made in this review to question the Hensrud findings as they relate to comparable sales. There really aren't any. Therefore, his resultant figure of $2,950,000, which is not adjusted for inflation will be accepted as reasonable. The Income Approach as derived by Hensrud, in view of prevailing costs is considered low. It too, must be revised upward by a factor of at least 25% or $900,000 for a total of $4,500,000. Added together and divided, the final resultant figure equals $3,813,941. This is considered a conservative current value of the property and its improvements.
This reviewer has no present or contemplated interest in the subject property nor is my fee predicated on my findings.
Thank you for permitting me to serve you.
Sincerely,
((signature))
James R. Phipps
REAL ESTATE CONSULTANT
PERSONAL:
. Born: April 29, 1934 Los Angeles, California
. Married: 1957 to Geraldine Johnson. 4 Children, 14 Grandchildren
EDUCATION:
. Woodland High School, Woodland1 California
. Wayland Baptist College, Wayland, Texas
. Southwestern Baptist Theological Seminary, Fort Worth, Texas (Masters begree)
PROFESSIONAL EXPERIENCE:
. General Contractors Licenses, California & Arizona
. General Real-Estate Licenses1 California & Arizona
. Community Developer, California & Arizona
. Designer, Builder Custom Homes, Office Complexes, Industrial Parks & Pacilities
. Designer Builder Major Church Campuses including Dormitories, Classrooms, Chapels & Sancturies.
. President & C.E.O. Desert Rose Industries, Inc. Manufacturer of Modular Rouses. Apartments, Office Buildings, Classrooms, 4-plexes
. President & C.E.O. C. P. Gold, Inc. Real Estate Consulting & Investment
PARTIAL LIST OF CLIENTS
. Concurrent Corporation
. Emerald Financial Services
. Evergreen Resources
. Roethen & Co.
. Canaan Financial
. PASI Corporation
. VIP Realty
. Salt River Project
((signature))
JAMES R. PHIPPS.