SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E-3
Rule l3e-3 Transaction Statement
(Pursuant to Section 13(e) of the Securities
Exchange Act of 1934 and Rule 13e-3 Thereunder)
KILLEARN PROPERTIES, INC.
(Name of Issuer)
KILLEARN PROPERTIES, INC.
KILLEARN, INC.
KILLEARN DEVELOPMENT, INC.
J.T. WILLIAMS, JR.
DAVID K. WILLIAMS
JOHN R. WILLIAMS
J.T. WILLIAMS, III
(Name of Persons Filing statement)
COMMON STOCK, PAR VALUE $.10 PER SHARE
(Title of Class of Securities)
494125107
(CUSIP Number of Class of Securities)
David K Williams
Killearn Properties, Inc.
385 Country Club Drive
Stockbridge, Georgia 30281
Tel: (770) 389-2020
Copies to:
Phillip J. Kushner
Greenberg Traurig, P.A.
1221 Brickell Avenue
Miami, Florida 33131
(305) 579-0500
Louis Montello
Montello & Kenny, P.A.
777 Brickell Avenue, Suite 1070
Miami, Florida 33131
(305) 373-3739
(Name, Address and Telephone Number of Persons Authorized to Receive
Notices and Communications on Behalf of Persons Filing Statement)
This statement is filed in connection with (check the appropriate box):
a. [X] The filing of solicitation materials or an information statement
subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the
Securities Exchange Act of 1934.
b. [ ] The filing of registration statement under the Securities Act of 1933.
c. [ ] A tender offer.
d. [ ] None of the above.
Check the following box if the soliciting materials or information statement
referred to in checking box (a) are preliminary copies: [X]
CALCULATION OF FILING FEE
Transaction Value* Amount of Filing Fee
___________________ ________________________
$3,637,034.50 $727.41
*Assumes the purchase of 661,279 shares of Common Stock, par value $.10 per
share, of Killearn Properties, Inc. at $5.50 per share.
[X] Check box if any part of the fee is offset as provided by Rule 0-ll(a)(2)
and identify the filing with which the offsetting fee-was previously
paid. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
Amount Previously Paid: 727.41
Form or Registration No.: Preliminary Proxy Statement on Schedule 14A
Filing Party: Killearn Properties, Inc.
Date Filed: May 12, 1999
INTRODUCTION
This Rule 13e-3 Transaction Statement (this "Statement") relates to the
solicitation of proxies by Killearn Properties, Inc., a Florida corporation
("Killearn"), in connection with a Special Meeting of its shareholders at
which Killearn's shareholders will be asked to consider and vote upon a
proposal to approve the Agreement and Plan of Merger (the "Merger Agreement"),
dated May 10, 1999, among Killearn, Killearn Inc. ("Purchaser"), Killearn
Development, Inc. ("Merger Sub"), a Georgia corporation and wholly-owned
subsidiary of Purchaser, pursuant to which Killearn will be merged with and
into Merger Sub.
The cross reference sheet on the following pages, which is being supplied
pursuant to General Instruction F to Schedule 13E-3, shows the location in the
Preliminary Proxy Statement (the "Proxy Statement") filed by the Issuer with
the Securities and Exchange Commission on the date hereof of the information
required to be included in response to the items of this Statement. The
information set forth in the Proxy Statement which is attached hereto as
Exhibit (d), including all exhibits thereto, is hereby incorporated herein by
reference, and the responses to each Item herein are qualified in their
entirety by the provisions of the Proxy Statement.
CROSS REFERENCE SHEET
(Pursuant to General Instruction F to Schedule 13E-3)
All references are to portions of the Proxy Statement which are
incorporated herein and made a part hereof by reference.
SCHEDULE 13E-3 ITEM
NUMBER AND CAPTION RESPONSE/CAPTION IN PROXY STATEMENT
____________________ __________________________________________
1. Issuer and Class of Security
Subject to the Transaction.
(a).............................."SUMMARY -- The Companies"
(b).............................."SUMMARY -- Record Date; Voting Power;
Quorum"; "SUMMARY -- Market Prices for
Common Stock and Dividends"; and "THE
SPECIAL MEETING -- Record Date; Voting
Power; Quorum"
(c). ............................"SUMMARY -- Market Prices for Common Stock
and Dividends"
(d).............................."SUMMARY -- Market Prices for Common Stock
and Dividends"
(e)..............................*
(f).............................."APPENDIX C - Transactions involving
Killearn's Common Stock effected by the
Purchaser and other Affiliates since May 1,
1997"
2. Identity and Background.
(a) - (d), (g) ..........."SUMMARY -- The Companies" and "CERTAIN
INFORMATION CONCERNING MERGER SUB AND THE
PURCHASER AND OTHER AFFILIATES "
(e) - (f) ..................... *
3. Past Contacts, Transactions
or Negotiations.
(a) (1)........................."APPENDIX C -- Transactions involving
Killearn's Common Stock effected by the
Purchaser and other Affiliates since May 1,
1997"
(2)........................."SUMMARY -- Conflicts of Interest"; "SPECIAL
FACTORS -- Background of the Merger"; and
"SPECIAL FACTORS -- Conflicts of Interest"
(b).............................."SUMMARY -- Conflicts of Interest"; "SPECIAL
FACTORS - Background of the Merger"; and
"SPECIAL FACTORS -- Conflicts of Interest"
4. Terms of the Transaction.
(a).............................."SUMMARY -- The Merger"; "SUMMARY -
Conflicts of Interest"; "SPECIAL FACTORS -
Background of the Merger"; "SPECIAL FACTORS
-- Conflicts of Interest"; and "THE MERGER"
(b).............................."SUMMARY -- The Merger"; "SUMMARY -
Conflicts of Interest"; "SPECIAL FACTORS -
Background of the Merger"; "SPECIAL FACTORS
-- Conflicts of Interest"; and "THE MERGER"
5. Plans or Proposals of the
Issuer or Affiliate.
(a).............................*
(b).............................*
(c)............................."SUMMARY -- The Merger"; "THE MERGER -
Consequences of the Merger" and "CERTAIN
INFORMATION CONCERNING MERGER SUB, THE
PURCHASER AND OTHER AFFILIATES"
(d)............................."SUMMARY -- Financing of the Merger"; "THE
MERGER-- Consequences of the Merger"; and
"THE MERGER -- Financing"
(e)............................."SUMMARY -- The Merger"; and "THE MERGER -
Consequences of the Merger"
(f)............................."SUMMARY -- The Merger"; "THE MERGER -
Consequences of the Merger"; and "THE MERGER
-- Delisting and Deregistration of Common
Stock"
(g)............................."SUMMARY -- The Merger"; "THE MERGER -
Consequences of the Merger"; and "THE MERGER
-- Delisting and Preregistration of Common
Stock"
6. Source and Amount of Funds
Other Consideration.
(a)............................."SUMMARY -- Financing of the Merger" and
"THE MERGER -- Financing"
(b)............................."THE MERGER AGREEMENT -- Fees and Expenses"
and "THE MERGER AGREEMENT -- Estimated Fees
and Expenses of the Merger"
(c) (1)........................"SUMMARY -- Financing of the Merger" and
"THE MERGER -- Financing"
(2)........................"SUMMARY -- Financing of the Merger" and
"THE MERGER -- Financing"
(d).............................*
7. Purpose(s), Alternatives,
Reasons and Effects.
(a)............................."SPECIAL FACTORS -- Background of the
Merger"; "SPECIAL FACTORS -
Recommendations of the Special Committee and
Board of Directors"; and "SPECIAL FACTORS -
Purchaser's Purpose and Reasons for the
Merger"
(b)............................."SPECIAL FACTORS -- Background of the Merger"
and "SPECIAL FACTORS -- Purchaser's Purpose
and Reasons for the Merger"
(c)............................."SPECIAL FACTORS -- Background of the
Merger"; "SPECIAL FACTORS -- Recommendations
of the Special Committee and Board of
Directors"; and "SPECIAL FACTORS -
Purchaser's Purpose and Reasons for the
Merger"
(d)............................."SUMMARY"; "SPECIAL FACTORS - Recommendations
of the Special Committee and Board of
Directors"; "SPECIAL FACTORS - Purchaser's
Purpose and Reasons for the Merger"; "SPECIAL
FACTORS -- Conflicts of Interest"; "THE
MERGER -- Consequences of the Merger"; "THE
MERGER -- Federal Income Tax Consequences";
and "THE MERGER - Accounting Treatment"
8. Fairness of the Transaction.
(a)......................... "Summary - Fairness of the Merger to the
Unaffiliated Shareholders"; "SPECIAL
FACTORS -- Background of the Merger":
"SPECIAL FACTORS - Recommendation of the
Special Committe and Board of Directors";
and "SPECIAL FACTORS--Purchaser's Purpose
and Reason for the Merger"
(b)........................ "Summary - Fairness of the Merger to the
Unaffiliated Shareholders";"SPECIAL FACTORS
--Recommendation of the Special Committe
and Board of Directors";"and "SPECIAL
FACTORS -- Purchaser's Purpose and
Reasons for the Merger"; and "SPECIAL
FACTORS--Opinion of Financial Advisor"
(c)............................."SUMMARY -- Vote Required; Security Ownership
of Management" and "THE SPECIAL MEETING -
Vote Required; Security Ownership of
Management"
(d)............................."SUMMARY - Recommendations of the Board of
Directors and Special Committee" and "SPECIAL
FACTORS -- Recommendations of the Special
Committee and Board of Directors"
(e)............................."SUMMARY - Recommendations of the Board of
Directors and Special Committee" and "SPECIAL
FACTORS -Recommendations of the Special
Committee and Board of Directors"
(f).............................."SPECIAL FACTORS -- Background of the Merger"
9. Reports, Opinions, Appraisals
and Certain Negotiations.
(a).............................."SUMMARY -- Opinion of Financial Advisor" and
"SPECIAL FACTORS -- Opinion of Financial
Advisor"
(b).............................."SUMMARY -- Opinion of Financial Advisor" and
"SPECIAL FACTORS -- Opinion of Financial
Advisor"
(c).............................."SUMMARY -- Opinion of Financial Advisor" and
"SPECIAL FACTORS -- Opinion of Financial
Advisor"
10. Interest in Securities of
the Issuer.
(a)............................."SUMMARY -- Vote Required; Security Ownership
of Management"; "SUMMARY -- Conflicts of
Interest"; "SPECIAL FACTORS -- Conflicts of
Interest"; "THE SPECIAL MEETING -- Vote
Required; Security Ownership of Management";
and "BENEFICIAL OWNERSHIP OF COMMON STOCK"
(b)............................."APPENDIX C - Transactions involving
Killearn's Common Stock effected by Purchaser
and other Affiliates since May 1, 1997"
11. Contracts, Arrangements or
Under-standings with
Respect to the Issuer's
Securities................."SUMMARY -- Vote Required; Security Ownership
of Management"; "SPECIAL FACTORS -
Background of the Merger"; "THE SPECIAL
MEETING -- Vote Required; Security Ownership
of Management "; and "THE MERGER - Financing
- Cancellation of the Indebtedness"
12. Present Intention and
Recommendation of Certain
Persons with Regard to the
Transaction.
(a)............................"SUMMARY -- Vote Required; Security Ownership
of Management"; and "THE SPECIAL MEETING -
Vote Required; Security Ownership
Management "
(b)............................"SUMMARY -- Recommendations of the Board of
Directors and Special Committee" and "SPECIAL
FACTORS -- Recommendations of the Special
Committee and Board of Directors"
13. Other Provisions of the
Transaction.
(a)............................"SUMMARY -- Dissenters' Appraisal Rights and
"THE MERGER -- Dissenters' Appraisal Rights"
(b)............................*
(c)............................*
14. Financial Information.
(a)............................."SUMMARY FINANCIAL INFORMATION" and
"DOCUMENTS INCORPORATED BY REFERENCE"
(b)............................*
15. Persons and Assets Employed
Retained or Utilized.
(a).............................."SUMMARY -- Opinion of Financial Advisor";
"SUMMARY -- Conflicts of Interest"; "SUMMARY
-- Financing of the Merger"; "SPECIAL FACTORS
-- Opinion of Financial Advisor"; "SPECIAL
FACTORS -- Conflicts of Interest"; "THE
SPECIAL MEETING -- Solicitation of Proxies";
"THE MERGER -- Financing"; "THE MERGER
AGREEMENT -- Fees and Expenses"; and "THE
MERGER AGREEMENT -- Estimated Fees and
Expenses of the Merger"
(b).............................*
16. Additional Information......*
* Not applicable or answer is negative
ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.
(a) The information set forth in "SUMMARY -- The Companies" of the Proxy
Statement is incorporated herein by reference.
(b) The information set forth in "SUMMARY -- Record Date; Voting Power;
Quorum"; "SUMMARY -- Market Prices for Common Stock and Dividends"; and "THE
SPECIAL MEETING --Record Date; Voting Power; Quorum" of the Proxy Statement
is incorporated herein by reference.
(c) The information set forth in "SUMMARY -- Market Prices for Common Stock
and Dividends" of the Proxy Statement is incorporated herein by reference.
(d) The information set forth in "SUMMARY -- Market Prices for Common Stock
and Dividends" of the Proxy Statement is incorporated herein by reference.
(e) Not applicable.
(f) The information set forth in "APPENDIX C -- Transactions involving
Killearn's Common Stock effected by Purchaser and other Affiliates since May 1,
1997" of the Proxy Statement is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a) - (d), (g) The information set forth in "SUMMARY -- The Companies"
and "CERTAIN INFORMATION CONCERNING MERGER SUB, PURCHASER AND OTHER AFFILIATES"
of the Proxy Statement is incorporated herein by reference.
(e) - (f) Negative.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.
(a) (1) The information set forth in "APPENDIX C -- Transactions involving
Killearn's Common Stock effected by Purchaser and other Affiliates since May 1,
1997" of the Proxy Statement is incorporated herein by reference.
(2) The information set forth in "SUMMARY -- Conflicts of Interest";
"SPECIAL FACTORS -- Background of the Merger"; and "SPECIAL FACTORS -
Conflicts of Interest" of the Proxy Statement is incorporated herein by
reference.
(b) The information set forth in "SUMMARY -- Conflicts of Interest"; "SPECIAL
FACTORS - Background of the Merger"; and "SPECIAL FACTORS -- Conflicts of
Interest" of the Proxy Statement is incorporated herein by reference.
ITEM 4. TERMS OF THE TRANSACTION.
(a) The information set forth in "SUMMARY -- The Merger"; "SUMMARY --
Conflicts of Interest"; "SPECIAL FACTORS -- Background of the Merger"; "SPECIAL
FACTORS - Conflicts of Interest"; and "THE MERGER" of the Proxy Statement is
incorporated herein by reference.
(b) The information set forth in "SUMMARY -- The Merger"; "SUMMARY --Conflicts
of Interest"; "SPECIAL FACTORS -- Background of the Merger"; "SPECIAL FACTORS
- -- Conflicts of Interest"; and "THE MERGER" of the Proxy Statement is
incorporated herein by reference.
ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE.
(a) Not applicable.
(b) Not applicable.
(c) The information set forth in "SUMMARY -- The Merger"; "THE MERGER --
Consequences of the Merger"; and "CERTAIN INFORMATION CONCERNING MERGER SUB,
THE PURCHASER AND OTHER AFFILIATES" of the Proxy Statement is incorporated
herein by reference.
(d) The information set forth in "SUMMARY -- Financing of the Merger"; "THE --
Consequences of the Merger"; and "THE MERGER -- Financing" of the Proxy
Statement is incorporated herein by reference.
(e) The information set forth in "SUMMARY -- The Merger"; and "THE MERGER --
Consequences of the Merger" of the Proxy Statement is incorporated herein by
reference.
(f) The information set forth in "SUMMARY -- The Merger"; "THE MERGER --
Consequences of the Merger"; and "THE MERGER -- Delisting and Deregistration of
the Common Stock" of the Proxy Statement is incorporated herein by reference.
(g) The information set forth in "SUMMARY -- The Merger"; "THE MERGER --
Consequences of the Merger; and "THE MERGER -- Delisting and Deregistration of
Common Stock" of the Proxy Statement is incorporated herein by reference.
ITEM 6. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in "SUMMARY -- Financing of the Merger"; and
"THE MERGER -- Financing" of the Proxy Statement is incorporated herein by
reference.
(b) The information set forth in "THE MERGER AGREEMENT -- Fees and Expenses"
and "THE MERGER AGREEMENT -- Estimated Fees and Expenses of the Merger" of the
Proxy Statement is incorporated herein by reference.
(c) (1) The information set forth in "SUMMARY -- Financing of the Merger" and
"THE MERGER -- Financing" of the Proxy Statement is incorporated herein by
reference.
(2) The information set forth in "SUMMARY -- Financing of the Merger" and
"THE MERGER -- Financing" of the Proxy Statement is incorporated herein by
reference.
(d) Not applicable.
ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS.
(a) The information set forth in "SPECIAL FACTORS -- Background of the
Merger"; "SPECIAL FACTORS -- Recommendations of the Special Committee and Board
of Directors"; and "SPECIAL FACTORS -- Purchaser's Purpose and Reasons for the
Merger" of the Proxy Statement is incorporated herein by reference.
(b) The information set forth in "SPECIAL FACTORS -- Background of the Merger
and "SPECIAL FACTORS -- Purchaser's Purpose and Reasons for the Merger" of the
Proxy Statement is incorporated herein by reference.
(c) The information set forth in "SPECIAL FACTORS -- Background of the
Merger"; "SPECIAL FACTORS -- Recommendations of the Special Committee and
Board of Directors"; and "SPECIAL FACTORS -- Purchaser's Purpose and Reasons
for the Merger" of the Proxy Statement is incorporated herein by reference.
(d) The information set forth in "SUMMARY"; "SPECIAL FACTORS --
Recommendations of the Special Committee and Board of Directors"; "SPECIAL
FACTORS - Purchaser's Purpose and Reasons for the Merger"; "SPECIAL FACTORS -
Conflicts of Interest"; "THE MERGER -- Consequences of the Merger"; "THE MERGER
- --Federal Income Tax Consequences"; and "THE MERGER -- Accounting Treatment" of
the Proxy Statement is incorporated herein by reference.
ITEM 8. FAIRNESS OF THE TRANSACTION.
(a) The information set forth in "SUMMARY - Fairness of the Merger to the
Unaffiliated Shareholders"; "SPECIAL FACTORS - Background of the
Merger"; Special Committee and Board of Directors"; and "SPECIAL
FACTORS -- Purchaser's Purpose and Reasons for the Merger" of the Proxy
Statement is incorporated herein by reference.
(b) The information set forth in "SUMMARY - Fairness of the Merger to the
Unaffiliated Shareholders"; SPECIAL FACTORS -- Background of the
Merger"; "SPECIAL FACTORS -- Recommendations of the Special Committee and
Board of Directors"; and "SPECIAL FACTORS -- Purchaser's Purpose and Reasons
for the Merger"; and "SPECIAL FACTORS -- Opinion of Financial Advisor" of the
Proxy Statement is incorporated herein by reference.
(c) The information set forth in "SUMMARY -- Vote Required; Security
Ownership of Management" and "THE SPECIAL MEETING -- Vote Required; Security
Ownership of Management" of the Proxy Statement is incorporated herein by
reference.
(d) The information set forth in "SUMMARY -- Recommendations of the Board of
Directors and Special Committee" and "SPECIAL FACTORS -- Recommendations of
the Special Committee and Board of Directors" of the Proxy Statement is
incorporated herein by reference.
(e) The information set forth in "SUMMARY -- Recommendations of the Board of
Directors and Special Committee" and "SPECIAL FACTORS -- Recommendations of
the Special Committee and Board of Directors" of the Proxy Statement is
incorporated herein by reference.
(f) The information set forth in "SPECIAL FACTORS - Background of the Merger"
of the Proxy Statement is incorporated herein by reference.
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.
(a) The information set forth in "SUMMARY -- Opinion of Financial Advisor"
and "SPECIAL FACTORS -- Opinion of Financial Advisor" of the Proxy Statement
is incorporated herein by reference.
(b) The information set forth in "SUMMARY -- Opinion of Financial Advisor"
and "SPECIAL FACTORS -- Opinion of Financial Advisor" of the Proxy Statement
is incorporated herein by reference.
(c) The information set forth in "SUMMARY -- Opinion of Financial Advisor"
and "SPECIAL FACTORS -- Opinion of Financial Advisor" of the Proxy Statement
is incorporated herein by reference.
ITEM 10. INTEREST IN SECURITIES OF THE ISSUER.
(a) The information set forth in "SUMMARY -- Vote Required; Security
Ownership of Management"; "SUMMARY -- Conflicts of Interest"; "SPECIAL
FACTORS -- Conflicts of Interest"; "THE SPECIAL MEETING -- Vote Required;
Security Ownership of Management"; and "BENEFICIAL OWNERSHIP OF COMMON STOCK"
of the Proxy Statement is incorporated herein by reference.
(b) The information set forth "APPENDIX C -- Transactions involving
Killearn's Common Stock effected by Purchaser and other Affiliates since
May 1, 1997" of the Proxy Statement is incorporated herein by reference.
ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE
ISSUER'S SECURITIES.
The information set forth in "SUMMARY -- Vote Required; Security Ownership
of Management"; "SPECIAL FACTORS - Background of the Merger"; and "THE
SPECIAL MEETING -- Vote Required; Security Ownership of Management "and "THE
MERGER - financing - Cancellation of Indebtedness " of the Proxy
Statement is incorporated herein by reference.
ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH REGARD
TO THE TRANSACTION.
(a) The information set forth in "SUMMARY -- Vote Required; Security
Ownership of Management"; and "THE SPECIAL MEETING -- Vote Required; Security
Ownership of Management " of the Proxy Statement is incorporated herein by
reference.
(b) The information set forth in "SUMMARY -- Recommendations of the Board of
Directors and Special Committee" and "SPECIAL FACTORS -- Recommendations of
the Special Committee and Board of Directors" of the Proxy Statement is
incorporated herein by reference.
ITEM 13. OTHER PROVISIONS OF THE TRANSACTION.
(a) The information set forth in "SUMMARY -- Dissenters' Appraisal Rights"
and "THE MERGER -- Dissenters' Appraisal Rights" of the Proxy Statement is
incorporated herein by reference.
(b) Not applicable.
(c) Not applicable.
ITEM 14. FINANCIAL INFORMATION.
(a) The information set forth in "SUMMARY FINANCIAL INFORMATION" and
"DOCUMENTS INCORPORATED BY REFERENCE" of the Proxy Statement is incorporated
herein by reference.
(b) Not applicable.
ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED.
(a) The information set forth in "SUMMARY -- Opinion of Financial
Advisor"; "SUMMARY -- Conflicts of Interest"; "SUMMARY -- Financing of the
Merger"; "SPECIAL FACTORS - Opinion of Financial Advisor"; "SPECIAL FACTORS -
Conflicts of Interest"; "THE SPECIAL MEETING -- Solicitation of Proxies"; "THE
MERGER -- Financing"; "THE MERGER AGREEMENT -- Fees and Expenses"; and "THE
MERGER AGREEMENT -- Estimated Fees and Expenses of the Merger" of the Proxy
Statement is incorporated herein by reference.
(b) Negative.
ITEM 16. ADDITIONAL INFORMATION.
Not applicable.
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Statement is true, complete and correct
June 18, 1999
KILLEARN PROPERTIES, INC.
By: /S/Mallory E. Horne
MALLORY E. HORNE
Chairman of the Board
KILLEARN, INC.
By: /s/ J.T. Williams, Jr.
J.T. WILLIAMS, JR.
President
KILLEARN DEVELOPMENT, INC.
By: /s/ David K. Williams
DAVID K. WILLIAMS
President
/s/ J.T. Williams, Jr.
J.T. Williams, Jr.
/s/ David K. Williams
David K. Williams
/s/ John R. Williams
John R. Williams
/s/ J.T. Williams, III
J.T. Williams, III
INDEX TO EXHIBITS
EXHIBIT
NUMBER
DESCRIPTION
(a) Revolving Line of Credit with American Century Bank.
(b) 1. Opinion of American Express Tax and Business Services Included
as Appendix B to Exhibit (d) hereto.
2. Appraisal of Eagles' Landing I-75 Property dated as of October 1,
1998 prepared by Bob Sorrels & Associates.
3. Appraisal of Windsong Plantation dated as of November 1, 1996
prprared by Bob Sorrels & Associates.
4. Appraisal of Eagles' Landing Phase 6 and 7 dated as of May 7, 1997
prepared by John K. Selfe III.
5. Appraisal of Windsong Phase VI dated as of August 15, 1996
prepared by John K. Selfe III.
6. Appraisal of Parkside Phase III dated as of April 3, 1996 prepared
by John K. Selfe III.
(c) 1. Agreement and Plan of Merger, dated May 10, 1999, among Killearn
Properties, Inc., Killearn Development, Inc., and Killearn, Inc.
included as Appendix A to Exhibit (d) hereto.
2. Promissory Notes of Wimberly Investment Funds, L.P. in favor of
Killearn, Inc., including extensions thereto.
3. Security Agreements between Wimberly Investment Funds, L.P. and
Killearn, Inc.
4. Promissory Notes of Proactive Technologies, Inc. in favor of
various creditors.
5. Pledge Agreements between Proactive Technologies and various
creditors.
6. Agreement to Purchase Promissory Notes of Proactive Technologies,
Inc. by Killearn, Inc. from various creditors.
(d) Preliminary Proxy Statement of Killearn Properties, Inc., as amended.
(e) Not applicable.
(f) Not applicable.
(a) - REVOLING LINE OF CREDIT WITH AMERICAN CENTURY BANK
KILLEARN, INC. AMERICAN CENTURY BANKING CORP.
1570 B ROCK QUARRY ROAD 2750 HIGHWAY 42 NORTH PO BOX 2130
STOCKBRIDGE, GA 30281 STOCKBRIDGE, GA 30281
Borrower's Name and Address Lender's Name and Address
Line of Credit No. 5000667
Date March 24, 1999
Max. Credit Amt. $2,000,000.00
Loan Ref. No. 5000667
You have extended to me a line of credit in the
AMOUNT of TWO MILLION AND NO/100 $2,000,000.00
You will make loans to me from time to time until 4 PM on March 22, 2000.
Although the line of credit expires on that date, I will remain obligated to
perform all my duties under this agreement so long as I owe you any money
advanced according to the terms of this agreement, as evidenced by any note or
note I have signed promising to repay these amounts.
This line of credit is an agreement between you and me. It is not intended
that any third party receive any benefit from this agreement, whether by direct
payment, reliance for future payment or in any other manner. This agreement
is not a letter of credit.
1. AMOUNT: This line of credit is:
X-OBLIGATORY: You may not refuse to make loan to me under this line of
Credit unless one of the following occurs;
a. I have borrowed the maximum amount available to me;
b. This line of credit has expired;
c. I have defaulted on the note (or notes) which show my indebtedness
under this line of credit;
d. I have violated any term of this line of credit or any note or other
agreement entered into in connection with this line of credit:
__ DISCRETIONARY: You may refuse to make a loan to me under this line of
credit once the aggregate outstanding advances equal or exceed ______$ _____.
Subject to the obligatory or discretionary limitations above, this line of
Is:
X OPEN-END (Business or Agricultural only): I may borrow up to the
Maximum amount of principal more than one time.
__ CLOSED-END: I may borrow up to the maximum only one time.
2. PROMISSORY NOTE: I will repay any advances made according to this line of
credit agreement as set out in the promissory note, I signed on March 24, 1999,
or any note(s) I sign at a later time which represent advances under this
agreement. The note(s) set(s) out the terms relating to maturity, interest
rate, repayment and advances. If indicated on the promissory note, the
advances will be made as follows: per customers verbal or written request.
3. RELATED DOCUMENTS: I have signed the following documents in connection
with this line of credit and note(s) entered into in accordance with this line
of credit:
__security agreement dated _____ X DEED TO SECURE DEBT OF EVEN DATE.
__mortgage dated _______________
X guaranty dated MARCH 24, 1999
4. REMEDIES: If I am in default on the note(s) you may:
a. take any action as provided in the related documents;
b. without notice to me, terminate this line of credit,
by selecting any of these remedies you do not give up your right to later
use any other remedy. By deciding not to use any remedy should I default,
you do not waive your right to later consider the event a default, if it
happens again.
5. COSTS AND FEES: If you hire an attorney to enforce this agreement I will
pay your reasonable attorney's fees, where permitted by law. I will also pay
your court costs and costs of collection, where permitted by law.
6. COVENANTS: For as long as this line of credit is in effect or I owe you
money for advances made in accordance with the line of credit, I will do the
following:
a. maintain books and records of my operations relating to the need for this
line of credit.
b. permit you or any of your representatives to inspect and/or copy these
records;
c. provide to you any documentation requested by you which support the reason
for making any advance under this line of credit;
d. permit you to make any advance payable to the seller (or seller and me)
of any items being purchased with that advance;
7. NOTICES: All notices or other correspondence with me should be sent to
my address stated above. The notice or correspondence shall be effective when
deposited in the mail, first class, or delivered to me in person.
8. MISCELLANEOUS: This line of credit may not be changed except by a written
agreement signed by you and me. The law of the state in which you are located
will govern this agreement. Any item of this agreement which is contrary to
applicable law will not be effective, unless the law permits you and me to
agree to such a variation.
FOR THE LENDER SIGNATURES: I AGREE TO THE TERMS OF
THIS LINE OF CREDIT. I HAVE RECEIVED
A COPY ON TODAY'S DATE.
By: /s/ Guy Quinn By: /s/ John R. Williams
GUY QUINN JOHN R WILLIAMS
President Vice President
(b 2.) APPRAISAL OF EAGLE'S LANDING I-75 PROPERTY DATED AS OF OCTOBER 1, 1998
PREPARED BY BOB SORRELS & ASSOCIATES.
PREPARED FOR
HORIZON MORTGAGE LENDING, INC.
APPRAISAL OF
EAGLES LANDING I-75 PROPERTY
AN 88.20 ACRE LAND TRACT
LOCATED ALONG PROPOSED I-75
FRONTAGE ROAD BETWEEN
EAGLES LANDING PARKWAY AND JODECO ROAD
LOCATED IN STOCKBRIDGE, HENRY COUNTY GEORGIA
DATE OF VALUE
OCTOBER 1, 1998
PREPARED BY
BOB SORRELLS AND ASSOCIATES
BOB SORRELLS & ASSOCIATES
REAL ESTATE APPRAISERS & CONSULTING
FEE APPRAISERS VA FHA
RESIDENTAL COMMERCIAL ACREAGE
INDUSTRIAL SPECIAL USE ESTATES
1950 A HWY. 85 N.
J&R PLAZA
JONESBORO, GEORGIA 30236
OCTOBER 18, 1998
Horizon Mortgage Lending, Inc.
245 Country Club Drive
Building 300 - Suite A
Stockbridge, Georgia 30281
Attention: Ms. Diane McKoon
RE: Appraisal of Property
Eagles Landing I-75 Property
88.20 Acre Land Tract/Proposed Frontage Road
District 6 Land Lots 19, 20 and 46
Stockbridge, Henry County, Georgia
Dear Ms. McKoon:
In accordance with your request and authorization, Bob Sorrells and Associates
has prepared a Limited Appraisal presented in a narrative Summary Report of
the current market value of the Fee Simple Estate in the above referenced real
property.
Enclosed is the report containing pertinent data, facts gathered, and analysis
of this information. The analyses, opinions and conclusions were developed
based on, and this report has been prepared in conformance with, our
interpretation of the guidelines and recommendations set forth by the
requirements of the Code of Professional Ethics and Standards of Professional
Practice of the Appraisal Foundation, the Uniform Standards of Professional
Appraisal Practice ("USPAP") of the Appraisal Foundation, and the National
Association of Independent Fee Appraisers (NAIFA).
The subject property consists of approximately 88.20 acres of undeveloped land
in the Eagles Landing planned development, located between the boundaries of
Eagles Landing Parkway to the north and Jodeco Road to the south. Interstate
Highway 75 forms the 'Western boundary and Eagles Landing Golf Course forms
the eastern boundary. Significant to 'the appraisal and future value
estimate is the Georgia Department of Transportation and Henry County
Department of Transportation completion of Octagon Road (ie Frontage Road)
between Country Club Drive and Jodeco Road as planned. Construction is
reported to begin circa May 1999 and completion of construction circa Summer
2000.
The subject 88.20 acres is planned for commercial subdivision and marketing
of the remaining 73.00 acres on completion of Octagon Road. 15.20 acres are
being provided for Octagon Road- right of way and open space. The subject
is zoned C-2 Commercial District, and all public utilities to include
sanitary sewer are available for development needs. Octagon Road length
along the developable portion of the property is approximately 3100 feet.
This 100 foot right of way will open the interior of the tract with 6200 +_
feet of new road frontage (east and west sides combined). The western 27.60
acres of the property will front along the east side of I-75 with 3100 +_
feet thus giving the property excellent exposure and access to the 112,000
car per day traffic count along this major north-south interstate highway.
A total of 15 commercial sites ranging between one to two acres each are
platted along the Octagon / I-75 right of way totaling 27.60 acres. A 15.70
acre tract is currently under contract to the Georgia Power Company for office
development. The remaining 29.70 acres is found along the east side of
Octagon Road, backing to three fairways of the Eagles Landing Golf course.
Thus, the subject property is considered to have excellent marketing and
development characteristics.
Surrounding development in the Eagles Landing market can be described as
rapid, particularly in the area of residential, retail commercial, and office
use. The availability and supply of alternative competing undeveloped
properties is considered limited at this time.
Based on our investigation and analysis, it is our opinion that the Market
Value of the fee simple interest of the subject property, subject to the
Limiting Conditions and Assumptions contained herein, found in the present
"As Is" undeveloped status, as of October 1', 1998 is:
Five Million, Seven Hundred Thirty Thousand Dollars
($5,730,000)
The future or prospective value of the subject property, completed per plans
and specifications as submitted, subject to the Limiting Conditions and
Assumptions contained herein, effective to the estimated date of completion
in the Summer of 2000 is:
Gross Aggregate Retail Market Value
73.00 Acres
Eighteen Million, Four Hundred Thousand Dollars
($18,400,000)
Present Worth Discounted Cash Flow Analysis
73.00 Acres
Ten Million, Two Hundred Thousand Dollars
($10,200,000)
Employment of the appraisers was not conditional upon the appraisers producing
a specific value or a value within a given range. Future employment prospects
are not dependent upon the appraisers producing a specified value. Employment
of the appraisers and payment of the fee is not based upon whether a loan
application is approved or disapproved.
We appreciate the opportunity to be of service on this property. Please let
us know if we can be of further assistance in this or your other real estate
appraisal matters.
Sincerely,
/s/ ROBERT WILSON, IFAS
Robert Wilson, IFAS
Ga. Cert. Gen. No. 1497
Associate Appriaser
/s/ BOB SORRELLS, IFAS
Bob Sorrells, IFAS
Ga. Cert. Gen. No. 1154
Chief Appraiser
LIMITING CONDITIONS AND ASSUMPTIONS
This appraisal is made subject to the following:
1. The appraiser assumes no liability for structural features not visible on
ordinary careful inspection, nor do they assume any responsibility for
sub-surface or foundation conditions.
2. Certain information used in this appraisal has been furnished by others.
The sources and the information are considered to be reliable, but cannot be
guaranteed.
3. It is assumed that the physical characteristics of the property, with
regard to metes and bounds and road frontages, are essentially as depicted
on the plat of the property, attached herewith as an Exhibit.
4. No responsibility is assumed for matters legal in character, nor is any
opinion rendered as to title, which is assumed to be good and marketable.
Normal mortgage loan encumbrances and utility easements are considered to
exist.
5. If the property is under construction or proposed, it has been assumed
that the mortgage banker, in soliciting funds for this project, has furnished
to the user of this report complete plans, specifications, survey and
photographs of the land and improvements.
6. The contents of the appraisal are for limited private use only. If, by
virtue of this report, it becomes necessary to testify in court in support
of the value estimate, an additional fee will be charged. If this report
becomes property of any other party, other than the addressee or the person
who has paid the fee connected herewith, permission must be obtained for
reproduction or additional copies from the original addressee, and additional
fees will be charged for any further consultation, reappraisal, or review
of this property. Any subsequent copies of this report will be furnished
at a cost of $50.00 per copy, plus typing/computer charges, if necessary, plus
a base charge of $50.00.
7. Disclosures of the contents of this appraisal report are governed by the
By-Laws and Regulations of the National Associati6n of Independent Fee
Appraisers.
Neither all nor any part of the contents of this report (especially any
conclusions as to value, the identity of the firm with which he is connected,
or any reference to the National Association of Independent Fee Appraisers or
to the I.F.A.S. designation) shall be disseminated to the public through
advertising media, public relations media, sales media, news media, or any
other public means of communication without prior written consent and
approval of the undersigned.
In estimating the value of the subject property, every effort has been made
to accurately reflect the physical condition of the improvements as of the date
of inspection. However, the undersigned appraiser is not qualified to render
opinions as to the integrity, or capacity, of the structural, mechanical,
electrical, or plumbing systems, nor does he warrant or imply, by virtue of
this report, the condition/capacity of said systems beyond those written
observations included in the body of the appraisal report. Unless otherwise
stated, it is assumed that all systems are in good working order and typical
for the property type in its locale as of the date of inspection It is further
recommended, in conjunction with the appraisal, that "client" obtain at
his/her expense qualified opinion(s) as to the condition or capacity of such
systems.
It is also recommended that the client obtain at his/her expense, qualified
opinions as to the presence, if any, of toxic materials, chemicals,
insulation, radon gas, soil or water contamination or any other contamination
undetectable by normal observations during the appraisers inspection of the
property. Any reported findings contrary to the assumptions or stated
observations included in this report could affect the estimated value of the
property as stated.
The appraisal assignment was not based on a requested minimum valuation, a
specific valuation, or the approval of a loan.
CERTIFICATION AND ACKNOWLEDGMENT
OF PROFESSIONAL PARTICIPATION:
The appraiser hereby certifies:
1. That he does not have any undisclosed interest of the property, the
subject of this report, either past, present or contemplated.
2. That he does not have any personal interest or bias with respect to the
subject matter of this appraisal report or the parties involved.
3. To the best of my knowledge and belief the statements of fact contained
in the appraisal report, upon which the analyses, opinion and conclusions
expressed herein are based, are true and correct.
4. The appraisal report sets forth all of the limiting conditions imposed
by the terms of my assignment, or by the undersigned, affecting the analysis,
opinions, and conclusions contained in the report.
5. This appraisal report has been made in conformity with and is subject to
the requirements of the Code of Professional Ethics and Standards of
Professional Practice of the Appraisal Foundation, the Uniform Standards of
Professional Appraisal Practice ("USPAP") of the Appraisal Foundation, and the
National Association of Independent Fee Appraisers (NAIFA).
6. That the employment and compensation of the appraiser, or his associates,
for rendering the opinions expressed herein, are not contingent upon the
values expressed, nor upon any other factor, other than the preparation and
delivery of this report for the predetermined fee.
7. Robert Wilson, IFAS, did personally inspect the property which is the
subject of this report. Bob Sorrells, IFAS, did not make a personal
inspection of the property, but performed as Chief Appraiser and reviewed the
report on completion.
8. Certain information upon which the opinions of value are based is
gathered, maintained, verified and prepared by a research staff in the employ
of the appraiser. The staff is supervised by the appraiser and is judged by
him to be of competent, professional ability. Acknowledgment is made of their
contribution. Names, professional qualifications, and extent of their
participation can be furnished to the client upon request.
9. The appraisal assignment was not based on a required minimum valuation, a
specific valuation, or the approval of a loan.
10. Recertification:
The National Association of Independent Fee Appraisers has a mandatory program
of continuing education for designated members. Those who meet the standards
of the program are considered to have recertified. I am certified under the
program through December 31st, 1998.
/s/ ROBERT WILSON, IFAS
Robert Wilson, IFAS
Ga. Cert. Gen. No. 1497
Associate Appriaser
/s/ BOB SORRELLS, IFAS
Bob Sorrells, IFAS
Ga. Cert. Gen. No. 1154
Chief Appraiser
TABLE OF CONTENTS
LETTER OF TRANSMITTAL
LIMITING CONDITIONS AND ASSUMPTIONS
CERTIFICATION AND ACKNOWLEDGMEN
OF PROFESSIONAL PARTICIPATION
LAND APPRAISAL REPORT 1
SUMMARY OF SALIENT FACTS AND CONCLUSIONS 2
IDENTIFICATION OF THE PROPERTY 4
LEGAL DESCRIPTION 5
PURPOSE AND DATE OF APPRAISAL 5
FUNCTION OF APPRAISAL 5
PROPERTY RIGHT APPRAISED 5
APPRAISAL DEFINITIONS 6
THREE YEAR HISTORY OF PROPERTY 7
SCOPE OF THE APPRAISALS 8
ANTICIPATED MARKETING PERIOD 9
COMPETENCY OF APPRAISERS 10
METROPOLITAN ATLANTA OVERVIEW 11
HENRY COUNTY OVERVIEW 13
NEIGHBORHOOD OVERVIEW 17
GENERAL DESCRIPTION AND ANALYSIS OF THE PROPERTY 19
ASSESSMENT AND REAL ESTATE TAXES 24
ZONING DISTRICT 24
SUBJECT PHOTOGRAPHS 25
HIGHEST AND BEST USE 27
THE APPRAISAL PROCESS 30
APPRAISAL METHODOLOGY 31
SALES COMPARISON APPROACH 33
SUMMARY OF LAND SALES (Acreage) 36
SUMMARY MARKET ANALYSIS (Acreage) 50
I-75 FRONTAGE SITE SALES 50
I-75 INTERIOR SITE SALES 51
INCOME APPROACH: DEVELOPERS ANALYSIS 53
SUMMARY ABSORPTION STUDY 55
I-75 FRONTAGE SITES 55
I-75 INTERIOR SITES 56
DISCOUNTED SELLOUT ANALYSIS 58
CONCLUSION OF VALUE 60
ADDENDA SECTION 61
APPRAISER QUALIFICATIONS
LAND APPRAISAL REPORT
OWNERSHIP: Killearn Properties of Ga. Inc.
ADDRESS: 600 Country Club Drive
CITY/STATE: Stockbridge, Georgia 30281
PHONE: (770) 389-2020
CLIENT: Horizon Mortgage Lending, Inc.
STREET ADDRESS: 245 Country Club Drive-300 A
CITY/STATE: Stockbridge, Georgia 30281
PHONE: (770) 474-6044
PROPERTY INFORMATION: Eagles Landing I-75 Property
STREET ADDRESS: Octagon Road (Proposed)
CITY/STATE: Stockbridge, Georgia 30281
COUNTY: Henry
DISTRICT 6th
LAND LOTS: 19, 20, 46
AERO MAP NUMBER: 440-L-03
ATLANTA SMA: 0520
STATE/COUNTY CODE: 13151
CENSUS TRACT NO.: 701.03
TAX ASSESSMENT MAP: 52-01-25.20
FEMA MAP PANEL: 130468 0070B (11-2-83)
AD VALOREM TAX VALUE: $702,000 (FMV 1998)
File No. H106OCN
SUMMARY OF SALIENT FACTS AND CONCLUSIONS
IDENTIFICATION OF PROPERTY: Eagles Landing I-75 Property
LOCATION: East side I-75 between Eagles
Landing Parkway and Jodeco Road
Stockbridge, Henry County, Ga.
LAND SIZE: 88.20 Acres+ -
AND USE: Undeveloped
ROAD FRONTAGE: 3100 Feet E/S I-75
3100 Feet Proposed octagon Road
TRAFFIC COUNT: 112,004 cars per day/I-75
ZONING DISTRICT: C-2 Commercial District
Henry County Zoning Authority
PUBLIC UTILITIES: All public utilities available
TOPOGRAPHY: Slope to rolling with evidence
of creek/flood plain soils
along Pates Creek/tributaries
IMPROVEMENTS: 3100' Octagon Road (Proposed)
DATE OF VALUE ESTIMATE: October 1, 1998
HIGHEST AND BEST USE: Planned Unit Development
(office Commercial)
INTEREST APPRAISED: Fee Simple Estate
SITE DATA:
Georgia Power Site 15.70 Acres
Golf Course Office Site 4.00 Acres
Interior Octagon Road Sites 25.70 Acres
I-75 / Octagon Road Sites 27.60 Acres
Road Right of Way/Open Land 15.20 Acres
SUMMARY OF VALUE INDICATIONS:
As Is Undeveloped 88.20 Acres $5,733,000
Projected Retail Market Value
Georgia Power Site 15.70 Acres $1,570,000
Golf Course Office Site 4.00 Acres $ 800,000
Interior Octagon Road Sites 25.70 Acres $7,067,500
I-75 / Octagon Road Sites 27.60.Acres $8,970,000
Right of Way / Open Land 15.20 Acres $ 0
Eagles Landing I-75 Property 88.20 Acres $18,407,500
Called $18,400,000
Present Worth Discounted Cash Flow Analysis
Eagles Landing I-75 Property 88.20 Acres $10,200,000
ESTIMATED MARKET VALUE:
As Is-Undeveloped Acreage $ 5,733,000
As Proposed-Completed Octagon Road Project $10,200,000
IDENTIFICATION OF THE PROPERTY
Eagles Landing is situated approximately 20 radial miles southeast of
Atlanta's central downtown business district, and 10 miles southeast of
Hartsfield International Airport. The planned development uses within Eagles
Landing include single family residential, commercial and industrial of
surrounding properties.
The subject property consists of approximately 88.20 acres of undeveloped land
in the Eagles Landing planned development, located between the boundaries of
Eagles Landing Parkway to the north and Jodeco Road to the south. Interstate
Highway 75 forms the western boundary and Eagles Landing Golf Course forms the
eastern boundary. Significant to the appraisal and future value estimate is
the Georgia Department of Transportation and Henry County Department of
Transportation completion of Octagon Road (ie Frontage Road) between Country
Club Drive and Jodeco Road as planned. Construction is reported to begin
circa May 1999 and completion of construction circa Summer 2000.
The subject 88.20 acres is planned for commercial subdivision and marketing of
the remaining 73.00 acres on completion of Octagon Road. 15.20 acres are
being provided for Octagon Road right of way and open space. The subject is
zoned C-2 Commercial District, and all public utilities to include sanitary
sewer are available for development needs. Octagon Road length along the
developable portion of the property is approximately 3100 feet. This 100
foot right of way will open the interior of the tract with 6200 + feet of new
road frontage (east and west sides combined). The western 27.60 acres of the
property will front along the east side of I-75 with 3100 + feet thus giving
the property excellent exposure and access to the 112,000 car per day traffic
count along this major north-south interstate highway.
A total of 15 commercial sites ranging between one to two acres each are
platted along the Octagon / I-75 right of way totaling 27.60 acres. A 15.70
acre tract is currently under contract to the Georgia Power Company far office
development. The remaining 29.70 acres is found along the east side of
Octagon Road, backing to three fairways of the Eagles Landing Golf course.
LEGAL DESCRIPTION
An,abbreviated legal description is provided as following. A formal legal
description and boundary survey was not provided during assignment.
Appraisal has relied on preliminary plat from Moore, Bass, & Bibler,
Stockbridge; and Henrv County tax plats. The subject property is located in
Land District 6, Land Lots 19, 20, and 46. The subject is identified further
as part of tax map legal 52-1-25.20
PURPOSE AND DATE OF APPRAISAL
The purpose of the appraisal has been to estimate the Market Value of the
property identified as an 888.20 acre land tract in it's present "As Is"
status; and "As Proposed or the Future Value on completion of the proposed
I-75 frontage road, Octagon Road. The value estimate expressed herein
considers October 1, 1998 as the effective date of value which is the initial
date of the property inspection. The Future or Proposed Market Value is
projected to the estimated date of road construction completion, Summer 2000.
FUNCTION OF APPRAISAL
The function of this appraisal is for internal decision making and mortgage
loan underwriting.
PROPERTY RIGHT APPRAISED
The property right appraised is the fee simple ownership. Fee simple is an
absolute fee, which is an inheritable estate and a fee without limitations to
any particular class of heirs or restrictions, but subject to the limitations
of eminent domain, escheat, police power and taxation.
APPRAISAL DEFINITIONS
Market value may be defined as follows:
"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 is the consummation
of a sale as of a specified date and .passing of title from seller to buyer
under conditions whereby:
1) Buyer and seller are typically motivated.
2) Both parties are well informed, or well advised and
each acting in what he considers his own best
interest.
3) A reasonable time is allowed for exposure in the
open market.
4) Payment is made in terms of cash in U.S. dollars or
in terms of financial arrangements comparable
thereto.
5) 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.
The source of the foregoing definitions was the "Income Property. Appraising
Textbook" published by the National Association of Independent Fee Appraisers.
Fee Simple ownership may be defined as an absolute ownership unencumbered by
any other interest or estate subject only to the four powers of government."
The four governmental powers include eminent domain, escheat, police power and
taxation.
Leased Fee Estate (Interest) is defined as "an ownership interest held by a
landlord with the right of use and occupancy conveyed by lease to others;
the rights of lessor or the leased fee owner and leased fee are specified by
contract terms contained within the lease."
Fee Simple Title (Interest) is defined as "a title that signifies ownership
of all rights in a parcel of real property subject only to the limitations of
the four powers of government."
As-Is Value is defined as the actual physical, legal, economic, and political
status of the property on the effective date of valuation.
Fair Value is defined as "the cash price that might reasonably be anticipated
in a current sale under all conditions requisite to a fair sale. A fair
sale means that buyer and seller are each acting prudently and knowledgeably,
and under no necessity to buy or sell_ i.e., other than in a forced or
liquidation sale. The appraiser should estimate the cash price that might be
received upon exposure to the open market for a reasonable time, considering
the property type and local market conditions. When a current sale is
unlikely i.e., when it is unlikely that the sale can be completed within 12
months-the appraiser must discount all cash flows generated by the property to
obtain the estimate of fair value. These cash flows include, but are not
limited
to, those arising from ownership, development, operation, and the sale of the
property. The discount applied shall reflect the appraiser's judgement of
what a prudent, knowledgeable purchaser under no necessity to buy would be
willing to pay to purchase the property in a current sale. Whenever the
appraiser believes that more than one year is necessary for a fair sale of the
property, the appraisal shall state and justify the estimated time and state
the annual discount rate applied.
THREE YEAR HISTORY OF PROPERTY
The present owner (s) of record is shown as Killearn Properties Inc. of
Georgia, formerly known as Atlanta Tech Center Inc. Killearn Property was
owner of record for a period of time exceeding three years. The last known
recorded deed is shown as Deed Book and Page 1271-142 thru 144 on the property
record card, With a date indicating February 20, 1996. Other corporate name
ownership is known prior to this date, transferred internally. The property
which consists of 88.20 +/- undeveloped acres is part of initial Eagles Landing
planned development.
No other sale or transfer of the subject property within the last three years
is known nor indicated in available public records.
SCOPE OF THE APPRAISAL
This appraisal is intended to comply with the Uniform Standards of the
Professional Appraisal Practice promulgated by the Appraisal Standards Board
of the Appraisal Foundation and the Guide Notes to the Standards of
Professional Appraisal Practice adopted by the National Association of
Independent Fee Appraisers. The standards contain binding requirements and
specific guidelines that deal with procedures to be followed in developing an
appraisal, analysis, or opinion. These uniform standards set the requirements
to communicate the appraisers analysis, opinion, and conclusions in a manner
that will be meaningful and not misleading in the marketplace.
A narrative summary appraisal report on the subject property has been prepared.
The subject property data such as land size, location, utilities and zoning
are considered and presented in this report. Market data, including sales of
similar undeveloped commercial tracts have been identified, researched,
analyzed, and if applicable, presented in the report ., The data has been
used to estimate the highest and best use of the subject property and to
estimate the market value found as is. Market analysis was performed to
include projecting absorption rates of the proposed future commercial building
site acreage; and to estimate the retail market value of the individual tracts.
The appraisers lack the knowledge and experience with respect to the detection
and measurement of hazardous substances. Therefore, this assignment does not
cover the presence or absence of such substances as discussed in the Limiting
Conditions and Assumptions section. However, any visual or obviously known
hazardous substances affecting the property will be reported.
The documentation necessary to support our estimate of value is contained in
this appraisal report; and retained in the appraisal office data base.
ANTICIPATED MARKETING PERIOD
The subject property consists of approximately 88.20 acres of undeveloped land
in the Eagles Landing planned development. The property lies just south of
Eagles Landing Parkway at Interstate Highway 75 at Exit 73; and just south of
the incorporated city limits of Stockbridge. The property is described as
undeveloped acreage zoned commercial C-2 that allows for a wide range of
development use. The property has all public utilities available, adequate
road frontage for access in it's present configuration, and is visible to
interstate highway traffic reported at 112,000 cars per day
at this location.
The commercial and industrial market, as well as residential land market in
Henry County remains very active with numerous signs of current development
taking place. The subject tract is considered within this market, and as such
is considered desirable to a number of prospective purchasers requiring
either development land or land for speculative investment holding.
In order to estimate a normal marketing period necessary to expose the
property to achieve a fair sale, several assumptions are employed. These
include (a) the property should be priced at a reasonable markup over
market value as typically employed by sellers of similar type properties.
Overpricing the property will prolong the marketing period; (b) the property
should be actively exposed and aggressively marketed to potential purchasers
through normal marketing channels used by sellers of similar type properties;
(c) the sale should be consummated under the terms and conditions of the
definition of market value required by governmental regulations set forth in
the Purpose, Function, and Date of Appraisal section which preceded this
section. Using these prerequisites, a marketing period of approximately one
to two years should be appropriate for marketing the subject tract, As Is, if
the property is competitively priced and aggressively and professionally
marketed. On completion of the proposed frontage road, Octagon Road,
subdivision and marketing of the tract into smaller commercial user sites
would require an extended period of time in appraisers opinion. The result
of our absorption analysis estimates a four year or less marketing period.
INSERT MAP-SUBJECT
COMPETENCY OF APPRAISERS
With reference to qualifications of appraisers in the Addendum and a Bob
Sorrells and Associates resume on file with the client, Bob Sorrells, IFAS and
Robert Wilson, IFAS both have had previous appraisal experience with this type
Of property and are local appraisers very familiar with immediate market area.
Each appraiser holds a state appraiser license as Certified General Real
Estate Appraiser, No. 1154 and No. 1497 respectively.
We have performed numerous undeveloped acreage appraisals, both large and
small commercial tracts, in Henry, Clayton, Fayette, Coweta, Spalding, and
South Fulton Counties for various lending institutions to include Wachovia,
SouthTrust, Southern Crescent Bank, Tara State Bank, Bank of Coweta,
Griffin Federal, Fayette County Bank, First Citizens Bank, Newnan Savings
Bank, Bank of Newnan, Bank of Spalding County, First State Bank, developers,
governmental agencies, among others.
METROPOLITAN ATLANTA OVERVIEW
Relative to the appraisal of any form of real estate, the underlying
demographic and economic forces of the surrounding community should be
thoroughly considered as they affect the property being appraised. Potential
demand for real estate is a product of the growth and stability of its
environs. For this basic reason, a brief synopsis of the Atlanta metro-
politan area including Atlanta as an individual entity, is deemed an integral
part of this analysis. A location map is included within this section.
Atlanta is located in the northwestern portion of Georgia and is the state's
capital and largest city. In 1960, the Atlanta region became the first
metropolitan area in the Southeast to reach a population level of 1.0 million.
The Atlanta region (nine-county area) has experienced a rapid growth in
population in recent years, increasing 37% between 1960 and 1970, 26% between
1970 and 1980, and 31% between 1980 and 1990. The current population is
estimated to be approximately 2.847 million and is growing at an estimated
annual rate of 2.7%. Atlanta is currently ranked as the eighth largest MSA in
the nation in size of population according to Sales & Marketing Management's
1995 Survey of Buying Power Demographics USA.
The Atlanta Metropolitan Region has played, and will continue to play a major
role in the continued growth of Georgia and Southeastern United States. It
should continue to represent the major employment hub for the "Sunbelt" region.
The growth is supported by the steady increase in population, the number of
construction starts from residential and commercial structures, the
diversification of the work force, and the constant efforts to improve the
regional transportation system. Atlanta is already the center for federal
government operations in the Southeast and home of the southeast regional
offices of the Federal Reserve Bank, the Resolution Trust Corporation (RTC),
the Federal Deposit Insurance Corporation (FDIC), and the Office of Thrift
Supervision (OTS). In addition, about 450 of Fortune's 500 largest industrial
firms have operations in the Atlanta region, and fourteen corporations,
including Coca Cola, Delta, Gold Kist Fuqua, Georgia Pacific, National
Services Industries, Royal Crown, Home Depot, and Oxford Industries, are
Headquartered here. Hartsfield Atlanta International Airport has played a
major role in the city's growth as an international city as well as a national
convention center. Atlanta, once an aging city with serious economic
problems, emerged as one of the most dynamic metropolitan areas of the 1980's.
The foundation of the area's rejuvenation was established during the 1970's
with the construction of Hartsfield International Airport. The facility,
which remains a model for other airports throughout the nation and offers
direct access to most U.S. markets, has made the area particularly attractive
to businesses with national operations. The airport, along with the
construction of a number of world-class hotels, have made the Atlanta area
one of the nation's top convention centers as well. With the addition of
new, high-quality office properties, Atlanta continues 'to attract large
corporations.
In recent years the Atlanta area has been experiencing an expansion in the
economy, setforth by the announcement of the 1996 Summer Olympics. Major
relocations by companies like UPS and Holiday Inn Corporation, coupled with
the recently held 1996 Summer Olympics should set the pace for economic
well being within the near future.
The subject is situated approximately twenty radial miles south of the Atlanta
Central Business District.
INSERT LOCATION MAP OF SUBJECT
HENRY COUNTY OVERVIEW
Location
North Henry County is located approximately 12 radial miles southeast of the
Atlanta Central Business District. The county encompasses 331 square miles
and is one of the eighteen counties which make up the Atlanta Metropolitan
Statistical Area. Neighboring counties include Clayton, DeKalb, Rockdale,
Newton, Butts and Spalding. A location map is provided within this section.
Municipalities
There are four municipalities in Henry County. They are Hampton, Locust
Grove, McDonough (the county seat), and Stockbridge.
Population
The 1970 population for the county was 23,724 persons. It increased to
36,309 persons in 1980 according to the U.S. Bureau of Census. This indicates
a 53% growth rate for the decade. The results of the 1990 census showed a
population of 58,741 for a growth rate of 62% for the most recent decade. The
1992 county population has been estimated at 63,900 by ARC. The following
chart illustrates the county and municipality populations for 1970, 1980, and
1990:
1970 1980 1990
Henry County 23,724 36,309 58,741
McDonough 2,675 2,778 2,929
Stockbridge 1,561 2,103 3,359
Hampton 1,551 2,059 2,694
Locust Grove 642 1,479 1,681
Employment
Henry County employment has been dominated by the manufacturing and
wholesale/retail trade industries since 1970. Major employers within Henry
County are NEC Home Electronics (TV & Computers), Snapper Power Equipment
(farm and garden machinery), Ford Motor Company (southeastern parts warehouse)
Dowling Textile Manufacturing (women's outerwear), and Southern States, Inc.
(electric distributing equipment). Other nearby, major employers of Henry
County residents include Danrik Ltd., Delta Airlines, Inc., International,
Georgia Purchasing, J.C. Penney Company, Inc., Hercules, Inc., Mobile Oil
Corporation, Lithonia Lighting, and Dundee Mills, Inc. These employers are
located in neighboring counties which include Clayton, Newton, Rockdale, and
Spalding. Approximately 60% of Henry County's labor force commutes to
employers outside the county. Snapper Power Equipment recently made the
decision to close its two out of state manufacturing plants and move them to
its headquarters in McDonough. Modifications to the local plant have recently
been completed. In conjunction with this decision, they have leased a new,
nearby-228,400 square foot warehouse to handle warehouse and distribution
activities. Also recently completed in McDonough is a new 600,000 square
foot facility which houses Ford Motor Company's south-eastern parts
distribution division. The facility is located in Liberty Industrial Park.
The Nestle Corporation is currently constructing a warehouse and distribution
center at the intersection of I-75 and Georgia Highway 155. The B K Group
recently opened a facility in Technology Point at Eagle's landing.
The labor force for Henry County as of December, 1994 was 32,899 persons. The
unemployment rate for Henry County in December was 5.1% in comparison with
5.4% for metropolitan Atlanta, 5.8% for the State of Georgia, and 7.3% for the
United States.
Income
There are approximately 21,900 households in Henry County. The per capita
income in Henry County in 1996 was $17,341 which ranked eighth in the Atlanta
Metropolitan Statistical Area.
Economic and Development Trends
Until recently the southern counties of the Atlanta Metropolitan Area have
been viewed as a stagnant, slow- growing area. Even though, in the past,
development within the southern area cannot be compared to the development and
growth occurring in the northern counties (such as Gwinnett and Cobb) of the
Atlanta MSA, steady growth has occurred. Past demographic and employment
trends and recent, current, and future commercial, residential, and industrial
growth give the area a positive outlook.
In early to mid 1980's, Atlanta's southern counties began to increasingly
attract the attention of northside, regional, national, and international
developers and investors. The area is now referred to as the "Southern
Crescent". Geographically, the Southern Crescent extends from Rockdale
County to the east, to Coweta County on the west, Clayton, Henry and Fayette
counties in the middle, and Spalding County to the South. Clayton, Fayette,
and Henry counties constitute the heart of the Crescent. This area roughly
forms the shape of a quarter-moon, lies south of I-285, and is anchored on
the north by Atlanta's Hartsfield International Airport. The airport is the
major economic stimulus in the area.
Surrounding the subject, an important development which is influencing growth
in Henry County, as well as facilitating the changing image of the southern
counties in the Atlanta region, is Eagle's Landing. Eagle's Landing, formerly
Atlanta Tech Center, is a 3,000 acre mixed use development of Florida-based
Killearn Properties. It is located in the northeast and southeast quadrants of
the I-75 and Hudson Bridge Road interchange and extends east to Georgia Highway
42.
Eagles's Landing includes an 18-hole golf course, designed by Tom Fazio, which
was named Best New Course in Georgia several years ago. Overlooking the 18th
hole is the Eagle's Landing Country Club. This is a 51,000 square foot
facility in the "Southern Traditional" style which has five dining rooms and
can accommodate functions for up to 300 people. Other features of the country
club include health club facilities, a swimming pool, tennis courts, and a
7,000 square foot tennis pro shop and observation deck. A sixty room hotel has
recently been completed on the grounds.
There are several subdivision developments surrounding the golf course as well
as peripheral locations within Eagles Landing. Golf front homes are
continuing to be built with values exceeding $500,000. The median price of
homes is above $200,000. Windsong, located on the north side of Eagles
Landing Parkway, is mid-level priced with home sales in the middle $100,000
and up. Entry level pricing is found at Parkside at Eagles Landing in the
lower $100,000 range.
The developers of Eagle's Landing donated a site on Tunis Road to the Henry
County Board of Education for a school.
Eagle's Landing High School opened in 1990 and reflects the high quality of
construction found elsewhere in the development. A junior high has also been
included within the campus area, and a private school, Windsong Academy, has
also recently opened .
Office development within the Eagle Landing area includes Eagle's Point which
is a traditional style brick project of two and three-story buildings.
Killearn Properties is developing Eagle's Landing Corporate Center business
park which will stretch along the #1 fairway of the golf course. Henry
General Hospital is located in Eagle's Landing and has recently been expanded
with additional expansion now planned. Henry General Hospital is a full-
service, 124-bed facility with approximately 300 doctors on staff.
Adjacent to the hospital is the 14-acre Eagle's Spring Center which is
primarily devoted to medical and professional office space. Crescent Pines
Psychiatrist Hospital opened in 1992. One third (about 1,000 acres) of
Eagle's Landing is designated as light industrial-distribution. Existing
enterprises include U S A Box, BellSouth Services Materials Distribution
(supply), BellSouth Services Material Disposition (salvage), Carbonic Industries
,Ply Mart, and Disco, Inc.. Group VI Corporation is developing
Phase I of a 400 acre industrial park known as Technology Pointe. The first
building containing 40,000 square feet, and occupied by B K Group, a cosmetics
manufacturing firm, opened in 1992.
There are numerous other industrial centers either proposed or currently under
development throughout Henry County. These include Bethlehem Park, Greenwood
Industrial Park, Hampton Industrial Park, Henry Industrial Park, Industrial
Parkway District, Liberty Park for Commerce and Industry, McDonough Industrial
Center, and Racetrack Road Industrial District. The more substantial
developments have located in Eagle's Landing, Liberty Park for Commerce and
Industry, Greenwood Industrial Park, and Technology Pointe. The completion of
Interstate Highway 675 in the fall of 1987 contributed to the growth in
current and proposed development for Henry County. Interstate Highway 675 is
currently a nine and one-half mile highway which originates immediately south
of Georgia Highway 138 along Interstate Highway 75 and intersects with the
southeastern portion of Interstate Highway 285. I-675 was constructed to
alleviate the increasing traffic into the Atlanta Central Business District.
INSERT A NEIGHBORHOOD MAP SHOWING SUBJECT
Currently there is only a moderate amount of development along Interstate
Highway 675. The majority of development is located at its interchange with
Highway 138/Stockbridge Road. However, there are numerous proposed
developments for this stretch of interstate highway. In the coming years this
area should experience increasing growth in population as well as a variety of
development uses.
Conclusions
Henry County is experiencing the majority of its growth within the Stockbridge
and McDonough areas. These two areas are well located near Interstate Highway
675, Interstate Highway 75, and numerous U.S. and Georgia highways. The
county's strong infrastructure of utilities and road systems will continue to
improve and can readily support the expanding industrial, residential, and
retail/commercial sectors in the immediate future. The county's government is
using foresight in its planning to properly ensure that the infrastructure
will be adequate to permit continued growth.
The county is well located near major employment centers as well as the
Atlanta Hartsfield International Airport and the regional Southlake Mall. The
population and income levels should continue to increase. Unemployment should
continue to be low due to the increasing development in all sectors in and
around the county. Henry County should continue to prosper and should
contribute to and benefit from the economic success of the Southern Crescent.
NEIGHBORHOOD OVERVIEW
The subject property and it's neighborhood are located in the southern section
of the metropolitan Atlanta area in the suburban community known as
Stockbridge, in Henry County, approximately 10 miles southeast of Hartsfield
Atlanta International Airport and approximately 20 miles south of the Atlanta
Central Business District.
The neighborhood surrounding the subject has to be defined and analyzed in
terms of the most probable use of the property. As will be supported in the
Highest and Best Use, the most probable use of the subject tract, as improved,
is considered to be a planned unit development, or multiple type development
use. Within this context, the neighborhood can generally be' defined as the
immediate area of similar prevailing commercial, industrial, and single family
residential type land uses. Neighborhood boundaries have been delineated
based primarily upon transitions in dominant development characteristics and
physical features such as transportation arteries.
The immediate neighborhood is generally defined as that area west to Highway
42 at the end of Eagles Landing Parkway, to the east end of Hudson Bridge Road
at it's intersection with Highway 351 aka Jodeco Road. Commercially, this
location draws primarily residential property owners from Lake Spivey (4.0
miles west) to Eagles Landing and it's surrounding subdivisions. Development
within the surrounding area is predominantly single family residential,
balanced with expanding commercial, industrial, and apartment uses. Along
Hudson Bridge Road (west) and Eagles Landing Parkway (east) the neighborhood
is found mixed use with commercial, industrial, and multi-family. The subject
is found near both medical office development in close proximity to Henry
General Hospital to the east, and strip commercial development along Hudson
Bridge Road, Eagles Landing Parkway, Rock Quarry Road, and Highway 42.
Along the Eagles Landing thoroughfare, other commercial uses found include
banks, daycare, veterinary clinic, professional offices, medical offices,
motels, convenience stores, industrial parks, office parks, and free standing
restaurants. As mentioned, Henry General Hospital and Eagles Landing form the
focal point of the neighborhood. Thus the subject is found in a very desirable
multiple use, expanding and demographically appealing neighborhood.
Considering the development of the surrounding properties, and convenient
access to transportation, employment, recreation centers, shopping and school
properties, the subject is considered to have a viable multiple use appeal
and marketability.
GENERAL DESCRIPTION AND ANALYSIS OF THE PROPERTY
Location
The subject is consists of a relatively large land tract located within the
Eagles's Landing planned development. The general location is placed between
the boundaries of Eagles Landing Parkway and Country Club Drive (north) ,
Interstate Highway 75 (west), Jodeco Road (south)-, and the No. 2, 3, and
4 Fairways of Eagles Landing Golf Course. The property lies immediately south
of Eagles Landing Parkway at Interstate Highway 75 at Exit 73; and just south
of incorporated city limits of Stockbridge. This location is placed near the
southern city limits of Stockbridge, and approximately 18 radial miles south
of Atlanta's Central Business District and 10 radial miles southeast of
Hartsfield International Airport.
Land Area
The subject tract contains a total of approximately 88.20 acres. Subject site
plan and general boundary survey is enclosed on following pages.
On completion of the proposed frontage road (Octagon Road) ,the required right
of way (100 foot width) and common/open land areas will consume 15.20 acres.
This includes the undevelopable creek bottom and flood prone lands.
The development land has a reported total of 73.00 acres. This is divided
into several land categories for descriptive and marketing purposes as
following:
Georgia Power Site 15.70 Acres
Golf Course Office Site 4.00 Acres
Interior Octagon Road Sites 25.70 Acres
I-75 / Octagon Road Sites27.60 Acres
Development Land Total 73.00 Acres
Area Streets
Eagles Landing Parkway is presently a two lane asphalt paved 200 foot wide
right of way that begins at the eastern corner of I-75 and travels
approximately 1.60 miles east to it's intersection with Highway 42. Formerly
known as Hudson Bridge Road, a small section near the interstate is divided
four lane. At Highway 42 and to the east, the right of way of Eagles Landing
Parkway has recently been extended further as an 80+ acre tract continues to
develop with a traffic signal at the intersection. Plans are in progress to
Widen the existing lanes as well as the bridge over I-75.
Highway 42 which is located one mile to the east has a variable right of way,
and is also presently a two lane asphalt paved right of way. This state
highway joins the city of Stockbridge, about 2.0 miles north; with the city of
McDonough found about 4.0 miles to the south. Traffic count is 10,002 cars
per day on Highway 42 at Eagles Landing Parkway.
Country Club Drive is located near the I-75 exit at Eagles Landing Parkway and
provides direct access to the subject. This road curves and extends easterly
and loops back to Eagles Landing Parkway east of the subject. This road
provides the primary access to Eagles Landing subdivision, Country Club, Golf
Course, and Corporate Center Business Park in the subject neighborhood.
Rock Quarry Road is described as a 80 foot right of way, two lane asphalt
paved. Rock Quarry Road terminates at Eagles Landing Parkway to it's south
near the subject; becoming Country Club Drive south of the traffic signal
controlled intersection. Rock Quarry Road proceeds north from the subject
several miles into the center of Stockbridge, terminating at the south side of
Highway 138/42 or North Henry Boulevard.
Octagon Road is the proposed subject frontage road that will be constructed by
Georgia and Henry County Department of Transportation through the Summer of
2000. On completion this road will provide 3100 feet of frontage on both
sides of it's right of way, through the subject 88.20 acres. The 100 foot
right of way terminates south of the subject at it's intersection with Jodeco
Road, I-75 Exit 72.
Traffic Counts
The 1997 Department of Transportation traffic counts for I-75 along the
subject's west boundary are reported as 112,004 cars per day; with 13,172 cars
per day along Eagles Landing Parkway.
Access, Visibility and Functional Utility
Access to the subject is presently limited to the southern side of Country
Club Drive, and adjoining Killearn property. Primary access will be from the
completed Octagon Road. This 100 foot right of way will open the interior of
the tract with 6200 + -feet of new road frontage (east and west sides
combined). The western 27.60 acres of the property will front along the east
side of I-75 with 3100 + - feet thus giving the property excellent exposure
and access to the 112,000 car per day traffic count along this major north-
south interstate highway.
The functional utility of the site excellent. The land is of sufficient size
to allow for a number of planned uses. In appraisers opinion, the utility of
the tract is limited only by topographic considerations.
Topography and Drainage
The subject tract is found as essentially undeveloped acreage with a variable
topography ranging from sloping and hilly to level and creek bottom. overall
drainage is assumed adequate for development purposes. Considering the
topographic survey of the property, the development potential of the land
appears average, with individual site grading required.
Flood Zone
According to the Henry County Georgia FEMA Map (130468-0070 B) which is
provided in this report,101-the source of abutting flood plain is found
along the banks of Pates Creek that form the northern boundary line of the
property. A precise acre amount in flood plain has not been provided to date,
but is included in the 15.20 acres of open and road right of way. Fema panels
are used to determine appropriate flood insurance rates in a given area for
participation in the federal flood
Area Streets
Eagles Landing Parkway is presently a two lane asphalt paved 200 foot right of
way that begins at the eastern corner of I-75 and travels approximately 1.60
miles east to it's intersection with Highway 42. Formerly known as Hudson
Bridge Road, a small section near the interstate is divided four lane. At
Highway 42 and to the east, the right of way of Eagles Landing Parkway has
recently been extended further as an 80+ acre tract continues to develop with
a traffic signal at the intersection. Plans are in progress to widen
the existing lanes as well as the bridge over I-75.
Highway 42 which is located one mile to the east has a variable right of
way, and is also presently a two lane asphalt paved right of way. This state
highway joins the city of Stockbridge, about 2.0 miles north; with the city of
McDonough found about 4.0 miles to the south. Traffic count is 10,002 cars
per day on Highway 42 at Eagles Landing Parkway.
Country Club Drive is located near the I-75 exit at Eagles
Landing Parkway and provides direct access to the subject.
This road curves and extends easterly and loops back to
Eagles Landing Parkway east of the subject.This road
provides the primary access to Eagles Landing Subdivision,
Country Club, Golf Course, and Corporate Center Business Park
in the subject neighborhood.
Rock Quarry Road is described as a 80 foot right of way, two lane asphalt
paved. Rock Quarry Road terminates at Eagles Landing Parkway to it's south
near the subject; becoming Country Club Drive south of the traffic signal
controlled intersection. Rock Quarry Road proceeds north from the subject
several miles into the center of Stockbridge, terminating at the south side of
Highway 138/42 or North Henry Boulevard.
Octagon Road is the proposed subject frontage road that will be constructed
by Georgia and Henry County Department of transportation through the Summer of
2000. On completion this road will provide 3100 feet of frontage on both
sides of it's right of way, through the subject 88.20 acres. The 100 foot
right of way terminates south of the subject at it's intersection with Jodeco
Road, I-75 Exit 72.
Traffic Counts
The 1997 Department of Transportation traffic counts for I-75 along the
subject's west boundary are reported as 112,004 cars per day; with 13,172 cars
per day along Eagles Landing Parkway.
Access, visibility and Functional Utility
Access to the subject is presently limited to the southern side of Country
Club Drive, and adjoining Killearn property. Primary access will be from the
completed Octagon Road. This 100 foot right of way will open the interior of
the tract with 6200 + -feet of new road frontage (east and west sides
combined). The western 27.60 acres of the property will front along the east
side of I-75 with 3100 + feet thus giving the property excellent exposure and
access to the 112,000 car per day traffic count along this major north -south
interstate highway.
The functional utility of the site excellent. The land is of sufficient size
to allow for a number of planned uses. In appraisers opinion, the utility of
the tract is limited only by topographic considerations.
Topography and Drainage
The subject tract is found as essentially undeveloped acreage with a variable
topography ranging from sloping and hilly to level and creek bottom. Overall
drainage is assumed adequate for development purposes. Considering the
topographic survey of the property, the development potential of the land
appears average, with individual site grading required.
Flood Zone
According to the Henry County Georgia FEMA Map (130468-0070B) which is
provided in this report, the source of abutting flood plain is found along the
banks of Pates Creek that form the northern boundary line of the property.
A precise acre amount in flood plain has not been provided to date, but is
included in the 15.20 acres of open and road right of way. Fema panels are
used to determine appropriate flood insurance rates in a given area for
participation in the federal flood insurance program. The latest panel is
dated November 2, 1983.
Utilities
Utilities and services are available to the site, including water and sanitary
sewer by Henry County, natural gas by Atlanta Gas Light Company, electricity
by Georgia Power Company, and telephone by Southern Bell. These utilities are
presently at or in close proximity to- the subject tract and it's boundary
lines.
Easements or Restrictions
No significant or apparent adverse encroachments, or adverse title conditions
were observed or are known to exist. A title report was not made available
for our review, and the final value estimate of this report assumes marketable
conditions exist.
Environmental Conditions
Our physical inspection of the subject property did not reveal any obvious
significant risks due to earthquake, tornadoes, hurricane, geological risk
area, asbestos, or any other physical conditions which may adversely affect the
value of the property. No detrimental environmental surface or sub-surface
soil conditions are known or impact study made or implied in this appraisal.
Property with flood plain soils are typically subject to certain county,
state, and federal level use and development restrictions. Recommend client
seek advisement on these issues with parties qualified to determine
development potential with respect to these conditions. See Limiting
Conditions section of this report.
Adjoining Land Uses
The subject property is joined by the Corporate Center Business Park
development found to the north, Eagles Landing Golf Course to the east, I-75
right of way to the west, and undeveloped acreage to the south.
The Henry General Hospital complex and nearby Eagles Landing Country Club and
Golf Course have been the focal point of development to date. Each has spun
off significant development of desirable residential subdivisions,
medical/professional offices and parks, as well spot and strip retail use
development in the immediate neighborhood.
Development Plan
On completion of Octagon Road, the subject will be divided into two road
frontage tracts. The eastern tract contains a total of 45.40 acres. At this
time, Georgia Power Company has contracted for the purchase of a single
building site containing 15.70 acres of the eastern tract. The 29.70 acres
remaining have approximately 2350 feet of Octagon Road frontage. 4.00 acres
joining the south side of the Georgia Power tract are estimated for upper end
office use with golf course view and frontage. The remaining 25.70 acres are
classified for interior commercial sites.
The western tract contains 27.60 acres and has been planned for subdivision
into fifteen 1.0 to 2.0 acre I-75 frontage sites. Given the Eagles Landing
location and 112,000 car per day interstate traffic exposure, each is
considered a prime commercial building site. Examples of this type building
site is anticipated to be representative of the Mt. Zion Parkway commercial
district located to the north at I-75 Exit 75A; essentially developed with
national chain restaurants and motels.
ASSESSMENT AND REAL ESTATE TAXES
The current owner of record is Killearn Properties of Georgia Inc. The tax
records were researched and reviewed for the subject tract. Current taxes are
based on the 1998 mileage rate of 0.03604. The subject tax plat parcel number
is indicated as 52-1-25.2 and a copy is enclosed in this section. Current tax
records indicate a land area of 70.25 acres for the subject property, below
the area indicated on the preliminary survey. The county tax appraisal is
reported as $702,000 with a 40% assessment of $280,800. Annual taxes based
on this information are estimated-at $10,120.00. No assessment change is
anticipated until sales of smaller individual sites are closed.
ZONING DISTRICT
The subject property is found within the zoning district of Henry County. The
subject is classified within the C-2 General Commercial District, and has
recently been rezoned from a former residential classification of PD Planned
Development with a R-2 single Family type use. The advent of the frontage
road apparently allowed for a change in the highest and best use decision for
this property.
This particular district provides an protects a wide range of retail, office,
service and wholesale establishments, and includes all those uses found in C-1.
The proposed use of the subject for planned commercial development is permitted
within this district. A summary of this zoning code is found below:,
FRONT YARD SETBACK: 50'
SIDE YARD SETBACK: 0' [30' if corner]
REAR YARD SETBACK: 20'
MINIMUM LOT AREA: 0.229 Acre
MINIMUM LOT WIDTH:100'
MAXIMUM HEIGHT: 35'
INSERT MAP-SITE DATA (OFFICE, COMMERCIAL, ROADS/OPEN SPACE)
INSERT FLOOD PLAIN MAP
INSERT TAX PLAT MAP
INSERT MAP-VIEW TOWARD SUBJECT FROM COUNTRY CLUB DRIVE, VIEW NORTH FROM JODECO
ROAD AREA ALONG I75 FRONTAGE PROPERTY
INSERT MAP-VEIW TO EAST ALONG COUNTRY CLUB DRIVE NEAR SUBJECT PROPERTY, VIEW
TO NORTH ALONG COUNTRY CLUB DRIVE TOWARD EAGLES LANDING PARKWAY AND ROCK
QUARRY ROAD
INSERT MAP LOCATING SUBJECT
HIGHEST AND BEST USE
Highest and Best Use is defined as:
The reasonable 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 four criteria is the
highest and best use must meet are legal permissibility, physical possibility,
financial feasibility, and maximum profitability.
Source: The Dictionary of Real Estate Appraisal, AIREA,2nd. Edition,ge 149.
Implied in the definition is that the determination of highest and best use
takes into account the contribution specific use to the community and
community development goals as well as the benefits of that use to individual
property owners. Hence, in certain situations of the highest and best use of
land may be for parks, greenbelts, preservation, conservation, wildlife
habitats, and the like.
The highest and best use decision is made on four distinct levels of analysis.
First, all those uses deemed physically possible are selected and gleaned to
arrive at those uses which are legally permissible, generally determined by
zoning regulations and/or deed restrictions. From among the legally
permissible, those found to be feasible, i.e., capable of generating the
greatest income stream are selected as the highest and best use. The
procedural sequence can be outlined as follows:
1. Possible Use (Physical). What uses are physically possible on the subject
site or in the subject improvements, given the physical characteristics
revealed by property analysis?*
2. Permissible Use (Legal). , What uses are permitted under existing zoning
and other land use regulations and controls and under existing deed
restrictions, for the subject property?*
3. Feasible Use (Appropriate Use). Among legally permitted and physically
possible uses for the subject property, which are appropriate given the
characteristics revealed by market, neighborhood and property analysis? What
uses produce any net return to the owner or a positive net present value?*
4. Highest and Best Use. Among appropriate or feasible uses for the subject
property, which use will produce the highest present value?*
Highest and Best Use must be analyzed and determined as if the property is
vacant and available to be put to the highest and best use, and as improved.
The reason for analyzing the highest and best use of the subject as if vacant
is to define the criteria for selection of the comparable sales to be used in
the valuation of the site because the sales utilized must have a highest and
best use consistent with the subject. It is also used to form the basis for
determining potential obsolescence if the highest and best use of the site as
vacant is different from the highest and best use as improved.
In determining the highest and best use of the subject site, the above tests
were applied to the subject.
Located off the south side of Eagles Landing Parkway and Country Club Drive,
along the east side of Interstate Highway 75 within the Eagles Landing market
area, the property is considered to have good visibility and accessibility.
This characteristic will be significantly enhanced with the completion of the
frontage road along I-75. The 88.20 acre functional shape, suitable
topography, and size and availability of all public utilities, allow the
property to be developed for a number of commercial uses. Therefore, the
site provides f or a physical adaptable use.
The subject property is a relatively large tract, found within the General
Commercial C-2 District. A proposed use that would include a number of
planned commercial as well as office type uses would be legal and conforming
as zoned.
The subject neighborhood has historically experienced Strong growth levels and
a proposed use that would include a variety of commercial uses at this
location should have good market acceptance. Given it's location in this
commercially developing area, a number of proposed commercial uses are
thought to be financially viable and there is no other known use that would
provide a greater net return to the property.
Therefore, a planned unit commercial and office use is considered a feasible
use of the property.
Based on the above considerations and after a physical inspection of the
property, it is our opinion that the highest and best use of the subject
property is for planned unit commercial and office type uses.
THE APPRAISAL PROCESS
Purpose of Section
The methodology of appraisal process is critical in the valuation of real
property. The development of an estimate of a real property's market value
requires a methodology whereby the assignment is defined, the property is
described, and the required data are identified, researched, categorized
and analyzed. Estimates of value are then developed through systematic
adjustment and capitalization processes under each of the three traditional
approaches. These estimates are then reconciled, and a final estimate of
value is rendered. These three approaches are as follows:
1. Cost Approach
2. Sales Comparison (Market) Approach
3. Income (Capitalization) Analysis
The theory, reasoning and application of these approaches have been refined
over the years. The appraiser believes that the Real Estate Terminology
handbook, revised edition, edited by Byrl N. Boyce and published for the
American Appraisal Institute and the Society of Real Estate Appraisers in 1981
by the Ballenger Publishing Company, is the best source for the definitions
and bases of application. The three definitions are presented here.
Cost Approach: That approach in appraisal analysis which is based on the
proposition that the informed purchaser would pay no more than the cost of
producing a substitute property with the same utility as the subject
property. It is particularly applicable when the property being appraised
involves relatively new improvements which represent the highest and best use
of the land or when relatively unique or specialized improvements are located
on the site and for which there exists no comparable properties on the market.
Sales Comparison (Market, Approach): That approach in appraisal analysis which
is based on the proposition that an informed purchaser would pay no more for a
property than the cost to him of acquiring an existing property with the same
utility. This approach is applicable when an active market provides sufficient
quantities of reliable data which can be certified from authoritative sources.
The direct sales comparison approach is relatively unreliable in an inactive
Market or in estimating the value of properties for which no real comparable
sales data are available. It is also questionable when sales data cannot be
verified with the principals to the transactions.
Income Capitalization Approach: That procedure in appraisal analysis which
converts anticipated benefits (dollar income or amenities) to be derived from
the ownership of property into a value estimate. The income approach is
widely applied in appraising income- producing properties. Anticipated future
income and/or reversions are discounted to a present worth figure through the
capitalization process.
APPRAISAL METHODOLOGY
The valuation process is employed to develop a supportable estimate of the
Market Value of the property appraised. It involves analyses of the property
by utilizing specific appraisal procedures which typically include the
application of one or more of the traditional appraisal approaches referenced
above. One or more of these approaches is used in all estimations of value,
depending on the type of property, the function of the appraisal, and the
quality and quantity of data available for analysis.
In this appraisal assignment, the Sales Comparison Approach will be used to
estimate the Market Value of the underlying land. The Sales Comparison
Approach is properly utilized when an adequate number of similar properties
have been recently sold, or are currently available for sale in the subject
market. The indication of value by this approach results from comparison of
these transactions with adjustments made to the sales or asking price for
various dissimilar elements or features which, in the appraisers opinion,
would influence the value of the property. This approach is used to estimate
the value of the subject found "As Is" a single large acreage tract with 88.20
acres; and to estimate the market value of the "As Proposed smaller user
sites.
The Income Approach is initiated by estimating the economic value for the
subject smaller user sites, in the Sales Comparison Approach. The sale of the
individual user sites over the term or holding period is capitalized into a
present worth by an appropriate capitalization technique. Deductions holding
costs are made that are comprised of marketing/closing costs, and
contingencies such as taxes, as well as a deduction for entrepreneur profit
and overhead to the potential investor in the property. The net proceeds
from the sale of the lots are then discounted by an appropriate rate over the
estimated term or absorption of the lots into the market.
The Cost Approach is not used, as it is not typically applicable to the
valuation of undeveloped property. The subject property is benefiting by the
tremendous significance of the State and County constructed and. maintained
octagon Road. All building sites have direct access to the right of
way and only minor costs to the property owner are anticipated at this
time. Future costs of marketing and other costs associated with the sale and
subdivision of the land are reconciled in the Income Approach or Developers
Analysis section of the report.
SALES COMPARISON APPROACH
The sales Comparison Approach, also. called the Market Approach, is the most
widely used of all valuation methods, particularly in the valuation of
unimproved or undeveloped land. The approach is based on the assumption that
property is worth what it will sell for in the absence of undue duress, if a
reasonable time is given to find a buyer. In this approach, market value is
estimated by comparing the subject to similar properties that have sold
recently or for which offers to purchase have been made, as well as active
listings in the market area. A major premise of the Sales Comparison Approach
is that the market value of a property is directly related the prices of
comparable properties.
Through comprehensive interviews of numerous buyers, sellers, and other real
estate investors, our research has indicated that more often than not,
investors will review the price per unit of comparison of nearby comparable
sales, but do not attempt to quantify adjustments for differences in
properties. Typically, investors or buyers will look at directly competitive
properties that have sold and make generalized assumptions based on location,
size, curb appeal, and topography; but this analysis is only used to test the
reasonableness of their other approaches to value. More recently, however,
the Sales Comparison Approach has been emphasized in purchase decisions. We
have used the Sales Comparison Approach to derive a price per acre estimate of
value.
The elements of comparison are the characteristics of properties and
transactions that cause the prices paid for real estate to vary. The
appraiser considers and compares all differences between the comparable
properties and the subject property that could affect value. Adjustments for
dissimilarities are made to the price of each sale to make the comparable
equal to the subject on the date of the appraisal.
There are several common elements of comparison that should always be
considered in a sales comparison analysis. Each is described as follows:
Real Property Rights Conveyed: A transaction price is always predicated
upon the real property interest conveyed. Many types of real estate,
particularly income-producing property, are sold subject to existing leases.
The revenue generating potential of a property is often fixed or limited by the
terms of existing leases. In the valuation process, adjustments must be
made to any limitations which may inhibit the property's ability to generate a
level of net operating income constrained only by market events. As vacant,
loped land, or under developed land, the property right is typically a fee
simple transfer of title, not subject to a lease.
Financing Terms., The transaction price of one property may differ from that
of an identical property due to different financing arrangements. Estimates
of market value are generally based upon an all cash basis or subject to
financing terms typically available in the market. Calculations for a
typical financing vary depending upon the type of financing arrangement and
the market perception of the effect on value. These adjustments are commonly
referred to as "cash equivalency. This adjustment is made prior to
additional analysis of the sale.
Conditions of Sale: These adjustments usually reflect the motivations of the
buyer and the seller. When non-market conditions of sales are detected in a
transaction, e.g. distressed sale, related parties, or foreclosure, the sale
an be used as a comparable only after extensive investigation. The
motivations of the sale must be thoroughly researched before an adjustment is
made.
Date of Sale: Market conditions generally change over time, but the date of
an appraisal is a specific time. Therefore, past sales must be examined in
light of the direction of change between the sale date of the comparable and
the valuation date of the subject property. This adjustment reflects changes
in value and is often called a "time adjustment".
Location: An adjustment may be required when the locational characteristics
of a comparable property are different from those of the subject. Adjustments
for location are usually expressed as percentages that reflect the increase or
decrease in value attributable to the property's location or neighborhood.
Physical Characteristics: If the physical characteristics of a comparable
property and the subject differ in any way, each of these dissimilarities may
require comparison and adjustment to equal the attributes of the subject.
Physical divergences may include size and shape of property, zoning/use,
availability of utilities, topography, access and visibility.
Comparable Sales Data
(Undeveloped Commercial Acreage Tracts)
In applying the Sales Comparison Approach, numerous land sales were identified
and investigated. A total of eight transactions involving nearby area
properties considered sufficiently comparable in some respect to the subject
are used in this analysis. For the purposes of comparison, the transactions
were analyzed in terms of price per acre.
Analysis and Interpretation of Market Data
A summary of the data used is presented on the following pages, and
explanations of each transaction follow. A map illustrating the locations of
the sales with respect to the subject is also included within this section.
Summary of Land Sales
(following page)
SUMMARY OF LAND SALES
SALE NO. DIST/LL ACRES $/AC DATE
1 6-019 6.48 $100,309 6/98
2 6-012 7.00 $121,428 5/96
3 6-014 7.65 $135,006 7/98
4 6-020 15.70 $100,000 9/98
5 6-111 34.97 $ 65,770 9/98
6 12-058 60.40 $ 49,027 5/97
7 7-243 91.16 $ 62,293 8/98
8 12-039 142.39 $ 29,705 7/98
TOTAL LAND SALES: Eight
MARKET AREA: Henry County - I/75 Corridor
TOTAL ACRES SOLD: 365.75 Acres
TOTAL SALES VOLUME: $19,273,076
RANGE IN SIZE: 6.48 Acres to 142.39 Acres
RANGE IN COST PER ACRE: $29,705 to $135,006
MEAN-AVERAGE COST PER ACRE: $52,695/Acre
MEDIAN-MID POINT COST PER ACRE: $82,885/Acre
LAND SALE NO. 1
LOCATION: Corporate Center Drive
District 6, Land Lot 019
Henry County, Georgia
SIZE: 6.48 Acres (282,269 SF)
SALES PRICE: $650,000
SALES PRICE/UNIT: $100,309/Acre ($2.30/SF)
DATE OF SALE: June 25, 1998
GRANTOR: Henry County Land Partners
GRANTEE: Eagle 75 Office Park
DEED BOOK/PAGE: 2934-114
ZONING: C-2 Commercial
UTILITIES: All Available
MAP REF: N/A
COMMENTS: This property is located along the
eastern side of Corporate Center
Drive within the Corporate Center
Business Park. Partially fronts
along fairway of golf course. Will
be developed with multiple building
office complex after purchase. Land
was cleared and rough graded at sale
date, minor amount of flood plain
included along southern boundary.
This property is to develop with
multiple office facility. Situated
less than 1/4 mile NE of subject.
LAND SALE NO. 2
LOCATION: Rock Quarry Road
District 6, Land Lot 012
Henry County, Georgia
SIZE: 7.00 Acres,(304,920 SF)
SALES PRICE: $850,000
2.78/SF)
SALES PRICE/UNIT: $121,428/Acre ($
DATE OF SALE: May 22, 1996
GRANTOR: Ameri Care Development Inc.
GRANTEE: Henco Assisted Living I LP
DEED BOOK/PAGE: 2317-169
ZONING: C-2 Commercial
UTILITIES: All Available
MAP REF: 032-01-028 (Part)
COMMENTS: This property is located between I-
75, and the west side of Rock Quarry
Road. In area of rolling
topography, with good access to
Henry General Hospital and
surrounding emerging commercial and
office development. Developed with
assisted living facility. Located
1/2 mile north of subject.
LAND SALE NO. 3
LOCATION: Eagles Landing Parkway
District 6, Land Lot 014
Henry County, Georgia
SIZE: 7.65 Acres (333,234 SF)
SALES PRICE: $1,032,800
SALES PRICE/UNIT: $135,006/Acre ($3.10/SF)
DATE OF SALE: July 31, 1998
GRANTOR: Twenty Seven Ltd, LP
GRANTEE: Dexter Crotts
DEED BOOK/PAGE: 2991-230
ZONING: C-2 Commercial
UTILITIES: All Available
MAP REF: 51-1-9.41
COMMENTS: This property is located along the
northern side of Eagles Landing
Parkway (4371) between Medical
Boulevard and Country Club Drive.
Undeveloped and natural woodland
ground cover, sharply sloping to
north, no flood plain noted. To
develop with retail use. Situated
1/2 mile NE of subject.
LAND SALE NO. 4
LOCATION: Proposed Frontage Road
District 6, Land Lot 020
Henry County, Georgia
SIZE: 15.7 Acres (683,892 SF)
SALES PRICE: $1,570,000
SALES PRICE/UNIT: $100,000/Acre ($2.29/SF)
DATE OF SALE: September 28, 1998 (Under Contract)
GRANTOR: Killearn Properties, Inc.
GRANTEE: Holder Properties, Inc.
DEED BOOK/PAGE: N/A
ZONING: C-2 Commercial
UTILITIES: All Available
MAP REF: N/A
COMMENTS: This transaction is a sale under
contract for Georgia Power Company
office complex. Pre-development
price and will be developed after
construction f Octagon Road.
Remains as natural woodland
property, no flood plain noted.
Additional $20,000 per acre to be
paid by purchaser f or site grading
to seller during development phase.
LAND SALE NO. 5
LOCATION: Jonesboro Road
District 6, Land Lot 111
Henry County, Georgia
SIZE: 34.97 Acres (1,523,293 SF)
SALES PRICE: $2,300,000
SALES PRICE/UNIT: $65,770/Acre ($1.51/SF)
DATE OF SALE: September 9, 1998
GRANTOR: Petro Stopping Centers, LP
GRANTEE: Triple Horseshoe Holdings, LLC
DEED BOOK/PAGE: 3017-007
ZONING: C-3 Commercial
UTILITIES: All Available
MAP REF: 54-1-25
COMMENTS: This property is located at the
southwest intersection of Jonesboro
Road and I-75 (Exit 71).
Undeveloped acreage tract purchased
for short term holding for future
commercial development. Discussion
with party to sale indicated this
intersection is targeted for major
commercial development to include
major retailers as Home Depot,
Target, and Wal-Mart. Other lands
presently being assembled with this
tract. Jonesboro Road is currently
four under widening program to four
lanes; from 1000 feet west of
intersection to downtown McDonough.
Situated 2+ miles south of subject.
LAND SALE NO. 8
LOCATION: Highway 138 / I-675 Davidson Pkwy
District 12, Land Lots 39,40,57,58
Henry County, Georgia
SIZE: 142.399 Acres (6,202,900 SF)
SALES PRICE: $4,230,000
SALES PRICE/UNIT: $29,705/Acre ($O.68/SF)
DATE OF SALE: July 15, 1998
GRANTOR: GAMA Development, LLC
GRANTEE: Triple Horseshoe Holdings, LLC
DEED BOOK/PAGE: 2957-222
ZONING: C-2, C-3, M-1
UTILITIES: All Available
MAP REF: 54-1-25
COMMENTS: This property is located at the
southeast intersection of Highway
138 and I-675 / I-75 in the City of
Stockbridge. Primary access is via
Davidson Parkway to Highway 138 with
development plan indicating exit to
Highway 42 to east. Predominate
zoning is industrial, developer
indicated city would permit most
commercial and industrial uses on
application. Undeveloped woodland
and open land at purchase, some
flood plain indicated toward
southern end along Reeves Creek and
tributaries. Development in
progress with through road.
Situated 2 miles north of subject.
LAND SALE NO. 7
LOCATION: Highway 155
District 7, Land Lot 243
Henry County, Georgia
SIZE: 91.166 Acres (3,971,190 SF)
SALES PRICE: $5,679,000
SALES PRICE/UNIT: $62,293/Acre ($1.43/SF)
DATE OF SALE: August 12, 1998
GRANTOR: Robert Pattillo Properties, Inc.
GRANTEE: First Industrial LP
DEED BOOK/PAGE: 2990-145
ZONING: M-1 Industrial, C-2 Commercial
UTILITIES: All Available
MAP REF: 467-F-02
COMMENTS: This property is located 1. 50 miles
south of I-75 at Exit 69, along the
east side of Highway 155 just below
Liberty Park. Undeveloped acreage,
level to rolling, no significant
flood plain noted. Joins Southern
Railway on east boundary. Immediate
area is developing with large
warehouse and distribution centers,
as well as number of SFR residential
subdivisions along west side of
Highway 155. Situated 6+ miles
south of subject.
LAND SALE NO. 6
LOCATION: Highway 138/Speer Road/I-75
District 12, Land Lot 058
Henry County, Georgia
SIZE: 60.401 Acres (2,631,067 SF)
SALES PRICE: $2,961,276
SALES PRICE/UNIT: $49,027/Acre ($1.13/SF)
DATE OF SALE: May 20, 1997
GRANTOR: Sid Kresses, etal
GRANTEE: SunTrust Service Corporation
DEED BOOK/PAGE: 2581-170 > 298
ZONING: C-3 commercial
UTILITIES: All Available
MAP REF: 12-3-85 (former 12 and 13)
COMMENTS: This property is located at the
southwest intersection of Highway
138, Speer Road, and I-75 (Exit 75).
Undeveloped acreage tract purchased
for development of campus type
office. Large office facility
recently completed. Parties to this
sale was family held estate;
additional land fronting along
Highway 138 was acquired separately
providing highway access increasing
net cost per acre. Property
topography was described as
relatively hilly and sloping
woodland, with some low creek areas.
Situated 2+ miles northwest of
subject.
LAND SALE NO. 7
LOCATION: Highway 155
District 7, Land Lot 243
Henry County, Georgia
SIZE: 91.166 Acres (3,971,190 SF)
SALES PRICE: $5,679,000
SALES PRICE/UNIT: $62,293/Acre ($1.43/SF)
DATE OF SALE: August 12, 1998
GRANTOR: Robert Pattillo Properties, Inc.
GRANTEE: First Industrial LP
DEED BOOK/PAGE: 2990-145
ZONING: M-1 Industrial, C-2 Commercial
UTILITIES: All Available
MAP REF: 467-F-02
COMMENTS: This property is located 1. 50 miles
south of I-75 at Exit 69, along the
east side of Highway 155 just below
Liberty Park. Undeveloped acreage,
level to rolling, no significant
flood plain noted. Joins Southern
Railway on east boundary. Immediate
area is developing with large
warehouse and distribution centers,
as well as number of SFR residential
subdivisions along west side of
Highway 155. Situated 6+ miles
south of subject.
LAND SALE NO. a
LOCATION: Highway 138 / I-675 Davidson Pkwy
District 12, Land Lots 39,40,57,58
Henry County, Georgia
SIZE: 142.399 Acres (6,202,900 SF)
SALES PRICE: $4,230,000
SALES PRICE/UNIT: $29,705/Acre ($0.68/SF)
DATE OF SALE: July 15, 1998
GRANTOR: GAMA Development, LLC
GRANTEE: Triple Horseshoe Holdings, LLC
DEED BOOK/PAGE: 2957-222
ZONING: C-2, C-3, M-1
UTILITIES: All Available
MAP REF: 54-1-25
COMMENTS: This property is located at the
southeast intersection of Highway
138 and I-675 / I-75 in the City of
Stockbridge. Primary access is via
Davidson Parkway to Highway 138 with
development plan indicating exit to
Highway 42 to east. Predominate
zoning is industrial, developer
indicated city would permit most
commercial and industrial uses on
application. Undeveloped woodland
and open land at purchase, some
flood plain indicated toward
southern end along Rv4-zves Creek and
tributaries. Development in
progress with through road.
Situated 2 miles north of subject.
Analysis and Interpretation of Market Data
(Undeveloped Commercial Acreage Tracts)
Evaluation of the units of comparison is-largely based on the principle of
substitution and influenced by the forces of supply and demand as well
other economic externalties. Variances between the comparable properties
and the subject are attributable to the previously described elements of
comparison.
The referenced land sales are summarized as following:
SALE NO. DIST/LL ACRES $/ACRE DATE
1 6-019 6.48 $100,309 6/98
2 6-012 7.00 $121,428 5/96
3 6-014 7.65 $135,006 7/98
4 6-020 15.70 $100,000 9/98
5 6-111 34.97 $ 65,770 9/98
6 12-058 60.40 $ 49,027 5/97
7 7-243 91.16 $ 62,293 8/98
8 12-039 142.39 $ 29,705 7/98
Analysis
Sales No. 1 thru No. 4 were identified from the subject's immediate Eagles
Landing market area and would be the most similar for locational
characteristics and market influences The subject is considerably larger in
size than the four comparable land sales, and each would typically be adjusted
downward for the size differential. Sales of large tracts zoned commercial
are relatively infrequent, particularly in the immediate Eagles Landing market
as it becomes increasing built out. An additional comparable 'ft noted at
this point, though not profiled. It is a larger tract with approximately
34 acres situated at the eastern end of Eagles Landing Parkway and Highway 42.
The broker, Rucker Realty indicated an offer had been placed at $63,000 for
the tract. The property is undeveloped, with a multiple RM and C-2 zoning
classification in a area of mixed use development.
This is a relatively large tract for the market area, and provides some
undocumented indication of the market direction. The location is considered
inferior to the subject and would indicate some upward adjustment.
Also noted was the sale of 26.03 acres of apartment zoned land adjacent to the
subject, between I-75 and Rock Quarry Road, presently being cleared and
developed for 224 units. The RM zoned land sold for $1,200,000 or $46,099
per acre or $5357 per unit. In addition, the developer had agreed to provide
some additional contiguous land to the county for a public park area, but
presently there remains some disagreement from the county park department in
accepting land for the counties perpetual maintenance. The cost of providing
the additional land is unknown, but would have an upward cost effect on the
net purchase acre price of the developable land area.
Thus, from Sales No. 1 thru No. 4; a per acre value above $60,000 is indicated,
but likely below $100,000 per acre; the bench mark for smaller, similar
located commercial sites.
Sales No. 5 thru No. 8 were identified as recent transactions from the
competing market area contiguous and situated along the I-75 corridor; both
north and south of the subject. These sales were found generally more in line
with the larger size of the subject; ranging from 34.97 acres to 142.39 acres.
The price per acre is appreciably less for the larger tracts; indicated
between $29,705 per acre to $65,770 per acre.
Sale No. 5 is a very recent transaction, located at the southwest intersection
of Jonesboro Road and I-75 (Exit 71). Undeveloped acreage tract purchased for
short term holding for future commercial development. Discussion with party to
sale indicated this intersection is targeted for major commercial
development to include major retailers as Home Depot, Target, and Wal-Mart and
Jonesboro Road is currently under widening program to four lanes. Somewhat
smaller than the subject, the present location is considered inferior,
particularly from the lack of appreciable ancillary development. Some
moderate amount of upward adjustment is contemplated to this sale.
Sale No. 6 is a recent transaction of a relatively large the southwest
commercial tract located at intersection of Highway 138, 'Speer Road, and
I-75 (Exit 75).Undeveloped acreage tract purchased for development of campus
type office with a large office facility recently completed. Property
topography was described as relatively hilly and sloping woodland, with some
low creek areas. Considering the obscure location of this tract without the
benefit of the Highway 138 access purchased separately, an upward adjustment
is made to the subject.
Sale No. 7 shares a very similar size to the subject with 91+ acres in the
transaction. This tract is situated south of an industrial developing
location, six- miles south of the subject and 1.50 miles south of I-75 at Exit
69, along the east side of Highway 155 just below Liberty Park. Lacks any
I-75 visibility, although access to I-75 is good. The $62,293 per acre sale
price requires upward adjustment appeal and location.
Sale no. 8.is a significantly large acreage tract situated at the southeast
intersection of Highway 138 and I-675 / I-75 in the City of Stockbridge.
Primary access is via Davidson Parkway to Highway 138 with development plan
indicating exit to Highway 42 to east. Predominate zoning is industrial,
developer indicated city would permit most commercial and industrial uses on
application. Undeveloped woodland and open land at purchase, some flood plain
indicated toward southern end along Reeves Creek and tributaries. Development
in progress with through road. This tract sets the lower limit of the market
range at $29,705 per acre. Upward adjustment is considered for size,
location, appeal and access.
A group of notable listings not profiled were identified that aided in
providing additional market data. The most similar to the subject was
identified as Tract One situated north, and adjacent to the Lowes Building
Supply facility at Highway 138 and I-75; located just north of the subject.
This tract contains 48.0 acres with extensive frontage along the west
side of Mt. Zion Road, and the east side of I-75. Owned by a foreign
investment company, the tract is undeveloped, mostly level to sloping, zoned
commercial with all utilities available. The property is currently priced at
$165,000 per acre.
The CarMax site found across I-75 from the above has sold, with 20.22 acres at
$123,639/acre in February 1997.
conclusion
In reconciling the land sales, Sales No. 1 thru No. 4 suggest a unit or acre
value below $100, 000. The larger acreage tracts, Sales No. 5 thru No. 7
indicate a value around$65,000 per acre. Current listings are appreciably
higher, but remain unsold. After careful consideration of the market
data as presented, it is our opinion that a reasonable estimate for the
subject property is placed between $60,000 to $70,000 per acre, say $65,000
per acre. This estimate would allow for a moderate amount of waste land or
flood plain, as often found in tracts of this size, ranging from 5% to 15% of
the gross land area.
Using the estimated value range as indicated, an overall value range is
calculated as following:
88.20 Acres x $65,000 Per Acre = $5,733,000
INDICATED MARKET VALUE BY SALES COMPARISON APPROACH
OF 88.20 ACRES AS UNDEVELOPED ACREAGE
FIVE MILLION, SEVEN HUNDRED THIRTY THREE THOUSAND DOLLARS
($5,733,000)
Comparable Sales Data
(Developed Commercial Sites)
In applying the Sales comparison Approach for the smaller individual
commercial user sites, the market of Mt. Zion Parkway was identified and
considered the most similar to the proposed plan for the subject property.
This market is located about five miles north of the subject, fronting
along the east side of I-75, just below Exit 75A.This market developed late in
1995, built out relatively fast in approximately two years for over 80% of the
property. Few if any sites remain available to date. A total of thirteen
ite sales were identified and analyzed in a summary format.
Each was considered sufficiently comparable in some respect to the subject
are used in this analysis. For the purposes of comparison, the transactions
were analyzed in terms of price per acre.
Individual property record card information was obtained from the tax
assessors office and used in the analysis of estimating the market value and
the associated absorption rate study used in the following Income Approach.
Documentation is retained in the appraisers office file for review purposes.
Analysis and Interpretation of Market Data
A summary of the data used is presented on the following pages, and
explanations of each transaction follow. A map illustrating the locations of
the sales with respect to the subject is also included within this section.
Summary of Land Sales
(following page)
INSERT MAP SHOWING SUBJECT AND SALE 1 AND SALE 13
SUMMARY MT. ZION PARKWAY / I-75 FRONTAGE ROAD
MARKET ANALYSIS
I-75 FRONTAGE SITE SALES
PROPERTY MAP ID SALE PRICE ACRES $ZACRE DATE
A-Arby's 84AB04 $ 300,000 1.39 $215,827 5/95
B-Winners 84CCOl $ 300,000 1.34 $223,880 5/95
C-Country Inn 84CCO2 $ 301,400 1.20 $250,125 9/95
D-Chilli's 84CCO3 $ 539,000 1.85 $290,409 11/95
E-On the Border 84DA01 $ 575,000 1.71 $336,848 5/98
F-Long Horn 84DA03 $ 610,000 2.03 $300,493 8/97
H-Target 83BB15 $2,330,000 8.45 $275,478 11/94
$4,955,000 36.24 $270,437
TOTAL SALES Seven
TOTAL ACRES SOLD 36.24
TOTAL SALES VOLUME $4,955,000
MEAN PRICE PER ACRE $ 270,437
SALE PERIOD 11/94 to 5/98
MARKET OF LATEST SALES $300,493/Ac to $336,848/Ac
Summary
The market for land sales fronting I-75 ranged from $215,827 per acre to
$336,848 per acre. The latest sales (1997-1998) indicate a significantly
higher market than the initial market prices generated in 1995 when
parkway began it's construction run. Significant buildout occurred rapidly,
and few sites remained in latter years. Sale of the less desirable sites due
to location, brought highest prices due to low supply and continuing demand
toward the end of the buildout period. Adjusting for time and aligning the
subject to current market conditions, an upward adjustment to the mean or
average price per acre of $270,437 is reasoned and supported by the most
recent Sales E and F ranging from $300,493 to $336,848 per acre. Considering
the I-75 frontage sites will be available in the Summer of 2000; a per acre
price of #325,000 is considered fair and reasonable. This estimate of land
value is used in the calculation of the retail market value of the 27-60
acres I-75 frontage land.
I-75 INTERIOR SITE SALES
PROPERTY MAP ID SALE PRICE ACRES $/ACRE DATE
I-Credit Union 84CA07 $ 78,305 0.40 $196,305 2/95
J-Sleep Inn 84CA08 $ 280,000 1.40 $200,000 5/95
K-Sun Suites 84CA09 $ 503,298 2.52 $l99,959 9/95
L-Egleston 84CA10 $1,391,108 4.90 $283,899 11/95
M-Extended Stay 84DA02 $ 920,000 3.43 $268,221 3/95
N-McDonal.ds 84CA06 $ 400,000 1.37 $291,970 4/94
$3,572,711 14.02 $240,059
TOTAL SALES six
TOTAL ACRES SOLD 14.02
TOTAL SALES VOLUME $3,572,711
MEAN PRICE PER ACRE $ 240,059
SALE PERIOD 4/94 to 11/95
Summary
The market for land sales along the interior side of Mt. Zion Parkway fronting
along I-75 ranged from $196,305 per acre to $291,97C) per acre. No additional
or more recent sales were available and this section has literally sold out in
less than two years. The mean or average price was $240,059 per acre, with
sales predominantly from the 1995 market era. Adjusting for time and market
change from 1995 to 1998, a per acre price of $275,000 is considered
reasonable.
An interior 4.0 acre golf front-office use tract is estimated separately at
$200,000 per acre. This estimate is made from two golf course office site
sales at Eagles Landing in Corporate Center Business Park. Sales profiled in
the report Addenda. Section. The first sale is dated to 1990 for 2.00 acres
at $150,000 per acre. The second sale occurred in 1993 with 2.03 acres at
$174,938 per acre. Considering the time
differential to the date of road completion, a $200,000 per acre market value
is again considered fair and reasonable for the 4.0 acres designated for golf
view office site adjoining the 15.70 acre Georgia Power site.
The 15.70 acre Georgia Power Company office site has been placed under
contract at $100,000 per acre or $1,570,000. This figure is considered
indicative of the subject market value and used for the purpose of this
appraisal assignment.
Conclusion
In conclusion of the market analysis for the comparable Mt.Zion / I-75
commercial land sales, the following per acre values have been estimated for
the 88.20 acres:
Georgia Power Site $100,000/Acre
Golf Course Office Site $200,000/Acre
Interior Octagon Road Sites $275,000/Acre
I-75 / Octagon Road Sites $325,000/Acre
Right of Way / Open Land No market value
A gross aggregate retail market value is calculated for the 73 developable
and marketable acres as following:
15.70 Acres x $100,000/Acre = $1,570,000
4.00 Acres x $200,000/Acre = $ 800,000
25.70 Acres x $275,000/Acre = $7,067,500
27.60 Acres x $325,000/Acre = $8,970,000
73.00 Acres $18,407,500
Called $18,400,000
INDICATED'HARKET VALUE BY SALES COMPARISON APPROACH
OF 73.00 ACRES ALONG PROPOSED FRONTAGE ROAD
EIGHTEEN MILLION, FOUR HUNDRED THOUSAND DOLLARS
($18,400,000)
INCOME APPROACH: DEVELOPERS ANALYSIS
The Developers Analysis involves protecting the potential gross income from
the sale of the subject commercial acreage and sites (previous section) over
a projected absorption period, making deductions for any holding costs, costs
of sales, and profit and overhead to the developer or purchaser of the
property.
This first step yields a net revenue or sale proceeds from the timely sale of
the acreage, projected during the absorption period. The interval net
proceeds are discounted using an appropriate rate that considers risk and
the time value of money over the period of the sales.
The discounting methodology reflects the price that a prudent purchaser
would be willing to pay for all commercial acreage (present worth) in order to
make a reasonable profit from the resale of individual commercial sites (to
builders) over a projected sell-out or absorption period. A discounted cash
flow analysis of the sale of the commercial acreage is made on the following
pages. The result is a discounted present value of:
EAGLES LANDING I-75 PROPERTY: 73 ACRES
$10,200,000
The final value estimate is based on the following criteria:
(A) Gross retail sellout is from the Sales Comparison
Approach. (See section of this report). Georgia
Power' anchor site valued at sale contract of
$100,000/acre. Balance of 57.30 acres estimated
at $293,848/acre (average) based on sales analysis
performed from Mt. Zion Parkway / I-75 frontage
road corridor found immediately north of subject.
From a conservative approach, no appreciation in
land value is projected through year four of
sellout period.
(B) Absorption rate of 14.32 acres per annual period
based on sales absorption study of the Mt. Zion
Parkway / I-75 frontage road corridor found
immediately north of the subject property.
Summary of Sale Study attached.
(C) Expenses are estimated as:
(1) Marketing/Closing Costs - 8%
(2) Contingency Costs - 1%
(3) Profit and Overhead - 20%
(D) 12.0% Discount Rate (See Attached Methodology)
Discount Rate
The Discount Rate represents the investor I s opinion of time value of his
investment given the risks associated with the investment. This rate also
reflects the appraiser's judgement about all risks which are associated with
the periodic cash flows over the absorption or sales period. These risks
include "Real" interest rate; estimate of the impact of inflation; estimate
of the stability of the periodic cash flows; and an estimate of the liquidity
risks associated with market conditions at the date of resale. In arriving
at an appropriate discount rate for the proposed subject subdivision, the
appraisers have considered the following:
"Real" Interest Rate: 3% to 3.5%
Estimate for Inflation: 4% to 5%
Estimate for Security: 2% to 5%
Illiquidity: 1% to 2%
An overall built-up rate implies a yield rate of between 10% and 15.5%.
Considering the risks associated with selling this prime commercial property
and the relatively short term nature of the cash f lows, a rate near the
middle of this range is considered most reasonable. Therefore, we have
employed a 12. 0% discount rate in our analysis. Net sales proceeds are
converted to present value based on end of period discount factors.
SUMMARY MT. ZION PARKWAY / I-75 FRONTAGE ROAD
ABSORPTION STUDY
I-75 FRONTAGE SITE SALES
PROPERTY MAP ID SALE PRICE ACRES $/ACRE DATE
Arby's 84AB04 $ 300,000 1.39* $215,827 5/95
Winners 84CCOl $ 300,000 1.34* $223,880 5/95
Country Inn 84CCO2 $ 301,400 1.20* $250,125 9/95
Chilli's 84CCO3 $ 539,000 1.85* $290,409 11/95
On the Border 84DA01 $ 575,000 1.71 $336,848 5/98
Long Horn 84DA03 $ 610,000 2.03 $300,493 8/97
Target 83BB15 $2,330,000 8.45 $275,478 11/94
$4,955,000 36.24 $270,437
TOTAL SALES Seven
TOTAL ACRES SOLD 36.24
TOTAL SALES VOLUME $4,955,000
MEAN PRICE PER ACRE $ 270,437
SALE PERIOD 11/94 to 5/98
MARKET OF LATEST SALES $300,493/Ac to $336,848/Ac
ABSORPTION RATE 1995* 5.78 Acres (I-75 frontage)
Summary
The market' for land sales fronting I-75 ranged from $215,827 per acre to
$336,848 per acre. The latest sales (1997-1998) indicate a significantly
higher market than the initial market prices generated in 1995 when the
parkway began it's construction run. Significant buildout occurred rapidly,
and few sites remained in latter years. Sale of the less desirable sites
due to location, brought highest prices due to low supply and continuing
demand. Current market estimated at $325,000 per acre. Absorption study for
1995 when supply was adequate indicated total of 5.78 acres for I-75 frontage
sites. Off frontage property analyzed separately.
1-75 INTERIOR SITE SALES
PROPERTY MAE-ID SALE PRICE ACRES $/ACRE DATE
Credit Union 84CA07 $ 78,305 0.40* $196,305 2/95
Sleep Inn 84CAOS $ 280,000 1.40* $200,000 5/95
Sun Suites 84CA09 $ 503,298 2.52* $199,959 9/95
Egleston 84CA10 $1,391,108 4.90* $283,899 11/95
Extended Stay 84DA02 $ 920,000 3.43* $268,221 3/95
McDonalds 84CA06 $ 400,000 1.37 $291,970 4/94
$3,572,711 14.02 $240,059
TOTAL SALES six
TOTAL ACRES SOLD 14.02
TOTAL SALES VOLUME $3,572,711
MEAN PRICE PER ACRE $ 240,059
SALE PERIOD 4/94 to 11/95
ABSORPTION RATE 1995* 12.65 Acres (I-75 interior)
Summary
The market for land sales along the interior side of Mt. Zion Parkway
fronting along I-75 ranged from $196,305 per acre to$291,970 per acre.
No additional more recent sales were available and this section has literally
sold out in less than two years. Adjusting for time and market change from
1995 to .1998, a per acre price of $275,000 is considered reasonable. An
interior 4.0 acre golf front-office use tract is estimated separately at
$200,000 per acre. Significant buildout occurred rapidly as indicated by the
sales array. The early 1994 sale to McDonalds Restaurant is found at the
parkway entrance and a corner lot, apparently available early on in the
development process. Absorption study for 1995 when supply was adequate
indicated total of 12.65 acres for I-75' interior sites. I-75 frontage
property analyzed previously, and separately.
Conclusion
In the base study period of Mt. Zion Parkway at I-75 for the sale year of 1995
when a full supply of commercial sites were still available, at total of 5.78
acres of I-75 frontage land were closed and 12.65 acres of interior land were
closed for a total of 18.43 acres. The subject has a total of 73.0
developable acres, and with the deduction of the 15.70 acre Georgia Power pre-
sale anchor site, 57.30 acres will remain for sale. The predominate end user
of the subject sites are anticipated to be chain restaurant and motel
developers, taking advantage of the pent up demand of the existing commercial,
office, hospital, and residential properties surrounding the Eagles Landing
community; as well as the 112,000 cars per day drive by traffic along I-75.
Assuming the Eagles Landing / I-75 property can-replicate the Mt. Zion Parkway
absorption and sale history; a 3*10 year sellout is indicated. From a
conservative position, we have extended the sellout to 4.00 years. This would
require an average yearly acreage sale figure of 14.32 acres, or about 77% of
the documented figures for Mt. Zion; a reasonable assumption in our opinion.
For the purpose of this report, and in estimating a yearly absorption rate for
the subject property, a total of 14.32 acres is estimated for a four year
marketing sellout period. As it cannot be readily or reliably determined which
type tracts or sites will sell in a given order, an average price per acre is
used for the entire development. This figure is derived by dividing the total
gross retail market value of the remaining acres (excluding the Ga. Power
tract) by 57.30 acres. The average price per acre is estimated at $293,848.
Absorption Period Four Years
Annual Absorption Rate 14.32 Acres
Average Price Per Acre $293,848
Discounted Sellout Analysis
EAGLES LANDING I-75 PROPERTY: 73 ACRES
GROSS AGGREGATE RETAIL VALUE: $18,407,500
AVERAGE COMMERCIAL ACRE PRICE: $ 293,848
GA. POWER ANCHOR ACRE PRICE: $ 100,000
YEAR PERIOD 0 1 2
Average
Acre Price ($) 100,000 293,848 293,848
Gross Income:
(14.32 Ac/Yr) 1,570,000 4,207,903 4,207,903
Less:
Cost of
Sales (8%) 125,600 336,632 336,632
Contingencies
1% 15,700 42,079 42,079
Profit & Over-
head-20%: $) 314,000 841,580 841,580
Total Expenses: 455,300 1,220,291 1,220,291
Net Proceeds
of Sales: ($) 1,114,700 2,987,612 2,987,612
Discount Factor
@ 12.00%: 1.0000 0.892857 0.797194
P.W. of Sales
Proceeds: ($) 1,114,700 2,667,510 2,381,706
Summary at End of Year Two
TOTAL ACRES SOLD: 44.34 Acres
TOTAL SALES VOLUME: $9,985,806
DISCOUNTED VALUE: $6,163,916
TOTAL DISCOUNT: $3,821,890
DISCOUNTED ACRE VALUE: $ 139,014
Discounted Sellout Analysis
EAGLES LANDING I-75 PROPERTY: 73 ACRES
GROSS AGGREGATE RETAIL VALUE: $18,407,500
AVERAGE COMMERCIAL ACRE PRICE: $ 293,848
YEAR PERIOD 3 4
Average
Acre Price ($) 293,848 293,848
Gross Income:
(14.32 Ac/Yr) 4,207,903 4,207,903
Less:
Cost of
Sales (8%) 336,632 336,632
Contingencies
1%: ($) 42,079 42,079
Profit & Over
head-20%: ($) 841,580 841,580
Total Expenses: 1,220,291 1,220,291
Net Proceeds
of Sales: ($) 2,987,612 2,987,612
Discount Factor
@ 12.00%: 0.711780 0.635518
P.W. of Sales
Proceeds: ($) 2,126,522 1,898,681
Sumary at End of Year Four
TOTAL ACRES SOLD: 73.00 Acres
TOTAL SALES VOLUME: $14,407,500
DISCOUNTED VALUE: $10,189,119
TOTAL DISCOUNT: $ 8,218,381
DISCOUNTED ACRE VALUE: $ 139,576
CALLED: $10,200,000
CONCLUSION OF VALUE
The subject property has been personally inspected and the arriving at the
pertinent conclusions market researched for of this narrative report. The
Highest and Best Use is considered it's proposed development as a planned
commercial subdivision. October 1, 1998 is considered the effective date
value for the property appraisal. This estimate will carry forward for a
reasonable period of time to complete development as specified; anticipated
toward the Summer 2000.
The property appraised "As Is", an 88.20 acre tract of undeveloped commercial
land, zoned C-2 Commercial at $5,733,000.
The 73.00 remaining acres found marketable as multiple smaller commercial user
sites along the proposed frontage road have been valued by the two traditional
approaches as $10,200,000 (Income Approach-Developers Analysis) to $18,400,000
(Market Approach-Gross Aggregate Retail Market Value). The lower end range of
$10,200,000 is the present worth or bulk sale value to a single user
anticipating the income stream from the resale of these commercial sites over
an estimated four year sellout period. Traditionally, the most weight is given
to this approach in the valuation of proposed commercial sites, and it is
commonly used by lenders for acquisition and development purposes.
It has been a pleasure to serve you in this matter. Please call if we can be
of service in this or your other real estate appraisal matters.
Sincerely,
/s/ Robert Wilson, IFAS
ROBERT WILSON, IFAS
Ga. Cert. Gen. No. 1497
Associate Appraiser
/s/ Bob Sorrells, IFAS
BOB SORRELLS, IFAS
Ga. Cert. Gen. No. 1154
Chief Appraiser
ADDENDA SECTION
PROPERTY DOCUMENTS
ZONING CODE
HENRY COUNTY
GOLF FRONTAGE COMMERCIAL LAND SALES
HENRY COUNTY DEMOGRAPHIC OVERVIEW
APPRAISERS QUALIFICATIONS
HENRY COUNTY
BOARD OF COMMISSIONERS
JIM FOYNER, Chairman
August 24, 1998
Mr. Jimmy A. Wilson
BIN 10151
Georgia Power Company
241 Ralph McGill Blvd., N.E.
Atlanta, GA
RE: Traffic signal for proposed Service Road from Jodeco Road to Country
Club Drive (Parallel to 1-75)
Dear Mr. Wilson:
This is to advise that Henry County will include installation of a traffic
Signal for the proposed new road intersecting Jodeco Road east of I-75.
This signal installation will be coordinated through our Henry Connty
Department of Transportation with the construction of this road and its
schedule for being open to traffic.
Please do not hesitate to contact me or our D.O.T. Director Mr. Jim O'Neal if
you have any questions:
Respectfully,
/s/ Jim Risher
JIM RISHER
County Manager
JR/ab
cc: Chairman Jim Joyner
Bob White, Executive Director, Development Authority
Jim O'Neal, D.O.T. Director
345 PH7LLIPS DRIVE McDONOUGH, GEORGIA 30253 (770) 954-2400 FAX (770)
954-2418
MORELAND ALTOBELLI ASSOCIATES, INC.
1O2 WINDY HILL ROAD
MCDONOUGH, GA 30253
FAX-770-898-7464
Thomas D. Moreland, P.E.
Stephen T. Moreland, P.E.
Memorandum
To: Jim Joyner, Chairman
Henry County Board of Commissioners
From: Don Watson
Subject: Octagon Road
Date: August 25, 1998
I have met with the Georgia D.O.T. office of State Aid concerning the above
Referenced project and they have agreed to let the project construction for
Henry County. The design and purchase of the necessary rights of way will be
the responsibility of the County.
The design for the entire roadway from Jodeco Road to Country Club Drive,
including the drainage structure at Pates Creek, will be completed and ready
to let to construction in April 1999. The Georgia D.O.T. is willing to place
an interim completion date in the construction contract for opening the segment
from Jodeco Road to Pates Creek to traffic by September 1. 1999.
If you have additional questions concerning this project let me know.
cc: Jim Fisher, County Manager
J.T. Williams
Tom Moreland
HENRY COUNTY
BOARD OF COMMISSSIONERS
JIM JOYNER, CHAIRMAN
September 10, 1 998
Mr. J.T. Williams, Jr.
100 Eagles Landing Way
Stockbridge, Georgia 30281
RE: Octagon Road
Dear Mr. Williams
We have had extensive conservations with the Georgia Department of
transportation concerning Octagon road, and at the present time it is being
designated under the guidelines of the Georgia D.O.T. standards and
Specifications.
Henry County is proceeding with development of this project based on these
discussions and it is being classified by Henry County as a local street.
The schedule at this time is to complete the design work in March of 1999
and the Georgia D.O.T. will let the project to contract in April, with
Construction authorization in May 1999. Further, the Office of State Aid has
agreed to an interim completion date of September 1, 1999 for the section
of Octagon Road from Jodeco Road to Pates Creek. The overall completion date
for the entire project from Jodeco Road to Country Club Drive will be
established once the plans are complete. This date will probably be mid 2000.
If you have additional questions or wish to discuss this matter further please
Let me know.
Sincerely,
/s/ Jim Risher, County Manager
JIM RISHER, COUNTY MANAGER
cc: Tom Moreland
Moreland Altobelli Associates, Inc
102 Windy Hill Road
McDonough. GA 30253
770/898-746-1
September 11, 1998
TO: Jim Fisher, County Manager
FROM: Don Watson
PE-: Octagon Road Design Schedule
Attached for your use is a schedule for the design of Octagon Road. If
you have any questions concerning this schedule, please let me know.
BOARD OF COMMISSIONERS
JIM JOYNER. Chairman
MEMORANDUM
TO: Bob White
Henry County Development Authority
FROM: Jim Risher
County Manager
DATE: September 11, 1998
RE: Octagon Road
As we have previously discussed with you and Georgia Power representatives,
Octagon Road should not have problems beginning construction as scheduled in
spite of the current situation regarding the ozone problem in metro Atlanta.
This road is classified as a local road by Henry County and exempt from the
EPA restrictions for roadway construction. Therefore, this protect should
not be delayed unless there is a change in federal regulations, which we do
not foresee at this time.
JR:kll
Georgia Economic Profile
McDonough
Henry County
Population GA U.S.
City County (millions)
1950 1,635 15,857 3.4 151.3
1960 2,234 17,619 3.9 179.3
1970 2,675 23,724 4.6 203.2
1980 2,778 36,309 5.5 226.5
1990 2,929 58,741 6.5 249.5
1996 4,266 86,885 7.3 265.0
Per Capita Income
County G A U.S.
1970 $3,114 $3,373 $4,047
1980 9,157 8,353 9,940
1985 13,816 12,864 14,155.
1990 16,300 17,123 18,666
1992 16,951 18,496 20,146
1993 17,326 19,244 20,809
1994 17,834 20,198 21,699
Health
(County)
1 hospital (122 beds).
16 MD's.
4 dentists.
1 chiropractor.
Henry County Health Department.
Mental Health Center.
Henry County Day Care & Training Center.
Stockbridge Auxiliary Health Center.
1 nursing home (180 beds).
1 psychiatric hospital.
Mental Retardation Service Center.
Education
COMMUNITY SCHOOLS. 19 county public schools with 800 teachers, 14,353
Students, and 605 high school graduates in 1995. 4 private schools with
464 students in 1995.
HIGHER EDUCATION. Tech. Institute: Griffin at Griffin (19 miles) has
2,015 students. There are 19 colleges and universities in the Atlanta
area with a total enrollment of more than 100,000 students.
Commercial Services
COMMUNICATIONS. Local Newspapers: 1 weekly. Dailies delivered:
Atlanta Journal, Atlanta Constitution. 6 TV channels received (22-
channel cable available). Local radio stations: 1 AM.
FINANCIAL FACILITIES. 1 blank and 4 branch banks with $31.4 billion
in assets.
INDUSTRIAL SUPPORT SERVICES. Fabricating, forming, machining, tool &
die shop.
PUBLIC ACCOMMODATIONS. 16 restaurants (largest seating capacity 100).
9 motels (758 rooms). 3 meeting facilities (largest seats 600).
Municipal Services
FIRE PROTECTION. 5 full-time city personnel and 60 volunteers. Fire
insurance classification 5.
POLICE PROTECTION. 10 full-time personnel.
GARBAGE. Service provided by city.
PROFESSIONAL ENGINEER. Consulting contractual engineer.
ZONING. City ordinance and subdivision design standards (Southern
Building Code). County zoning ordinance and subdivision design
standards.
Recreation
FACILITIES. 10 tennis courts. 2 public golf courses. 7 activity
centers. 8 parks. Atlanta Motor Speedway.
STATE PARK. Panola Mountain State Park (local) with trails, picnic
areas, interpretive center.
PUBLIC LAKE/RIVER.
Jackson Lake (15 miles) has swimming, fishing, camping, water skiing,
motor boating.
YEARLY EVENTS. Geranium Festival of City of McDonough (third Saturday
In May). Christmas Parade (first Saturday in December).
UTILITIES
ELECTRICITY. A part of Georgia's modern integrated electrical transmission
system, McDonough has excellent ability to supply industrial demands.
Compared to 47% for the U.S., coal accounts for 84% of fuel used by the
state's power generating plants. This assures long-term continuity.
NATURAL GAS. Supplied by Georgia Natural Gas Company and available in
industrial quantities on an interruptible basis.
WATER. Plant capacity: 1,200,000 gal/day. Consumption: 700,000 gal/day
maximum. Storage capacity: 750,000 gal. Elevated, 100,000 gal. Ground.
Source: 2 deep wells, reservoir on Walnut Creek. Daily flow: 1.6 cu ft/
sec average, .93 cu ft/sec minimum. County system has 6,000,000 gal/day
plant capacity with 4,400,000 gal/day consumption.
SEWAGE. Plant capacity: 1,200,000 gal/day. Plant load: 358,000 gal/day.
Secondary treatment plant. Oxidation pond. County system has 2,280,000
gal/day plant capacity with 1,300,000 gal/day plant load.
Transportation
MOTOR FREIGHT CARRIERS. 4 interstate. 24 inter/intrastate.
RAIL. Norfolk Southern rail service at McDonough (local). Norfolk
Southern piggyback service at Atlanta (28 miles). CSX piggyback service
at Atlanta (28 miles).
WATER. Nearest navigable river: Chattahoochee (9 foot channel depth)
with a public barge dock at Columbus (99 miles). Nearest seaport:
Savannah (230 miles) with a maintained channel depth of 42 feet.
AIR. Nearest commercial air service: Atlanta (28 miles). Airlines:
Aero Costa Rica, Aeromexico, ALM Antillean, Air Canana, Air South, Air
Jamaica, America West, American, American Eagle, Atlantic Southeast,
British Airways, Cayman Airways, Continental, Delta, Japan, KLM, Kiwi,
Korean Air, Lufthansa, Midwest Express, Northwest, Swissair, TWA, United,
USAir, ValuJet, Varig. Nearest public airport at Hampton (local). 3,400
foot asphalt runway. Services and navigational aids: aircraft tiedown,
airframe & power plant repair, hangar, lighted runway.
Taxes
PROPERTY. Property taxes are determined by tax rates and assessment ratios
which vary by location. The only realistic way to compare property taxes
for different locations is to use "effective tax rates" (tax rate multiplied
by assessment ratio). Effective tax rates combine city, county, school, and
state tax rates into one convenient figure-the annual tax for each $1000 of
property at its fair market value. This rate applies to all property: land,
buildings, machinery, equipment, and inventory
Property Located 1996 Effective Rate
Within City $16.03
Outside City $14.42
INVENTORY. Henry County exempts 100% on all classes of certain business
inventory from property taxation.
SALES. City and county have 2% local sales tax in addition to the 4% state
Sales tax.
1996 INDUSTRY MIX
HENRY COUNTY AREA
RANKED BY WAGE
% Weekly
INDUSTRY Firms Employment Emp Wage
Transportation and Public Utilities 594 33,348 17% 914
Mining 12 188 - 685
Wholesale Trade 769 11,209 6% 603
Manufacturing 502 28,090 14% 557
Construction 1,278 10,633 5% 517
Finance, Insurance, and Real Estate 754 5,738 3% 499
Government - Fed, State, Local, Intl 300 27,088 14% 498
Services 2,826 36,806 19% 420
Agriculture, Forestry and Fishing 179 1,416 1 % 330
Retail Trade 2,208 41,786 21% 269
Not Elsewhere Classified - - - -
TOTAL 9,422 196,302 100)% $520
% Weekly
Manufacturing Firms Employment Emp Wage
Chaemicals and Allied Products 30 1,953 7% 678
Fabricated Metal Products 43 1,967 7% 638
Petroleum Refining 5 64 - 634
Electronic, Other Electrical Equip 20 3,087 11% 626
Miscellaneous Mfg Industries 15 241 1% 625
Food and Kindred Products 20 1,687 6% 617
Stone, Clay, Glass and Concrete 31 903 3% 606
Paper and Allied Products 23 3,031 11% 588
Industrial Machinery, incl Computer 64 3,367 12% 555
Rubber and Misc Plastic Products 36 2.373 8% 550
Primary Metal Products 3 58 - 529
Furniture and Fixtures 11 566 2% 501
Transportation Equipment 23 732 3% 491
Textiles 18 3,619 13% 480
Printing and Publishing 82 1,190 4% 452
Lumber and Wood Products 47 834 3% 428
Apparel 25 1,712 6% 318
Instruments and Related Products 4 - - -
Leather and Leather Products 2 - - -
TOTAL 502 28,090 100% $557
COUNTIES : Henry, Butts, Clayton. Newton, Rockdale, Spalding.
Hyphens indicate data is unavailable or does not meet disclosure criteria.
1996 RETAIL TRADE & SERVICE MIX
HENRY COUNTY AREA
RANKED BY WAGE
% Weekly
Retail Trade Firms Employment Emp Wage
Auto Dealers, Gasoline Svc Stations 370 5,058 12% 530
Building, Hardware, Garden Supplies 92 1,278 3% 419
Furniture & Home Furnishings Stores 142 1,306 3% 344
Miscellaneous Retail 465 5,271 13% 334
Food Stores 278 6,105 15% 250
General Merchandise Stores 64 5,426 13% 241
Apparel and Accessory Stores 163 1,765 4% 212
Eating and Drinking Places 636 15,577 37% 168
TOTAL 2,208 41,786 100% $269
% Weekly
Services Firms Employment Emp Wage
Engineering and Management Services 227 1,465 4% 573
Health Services 609 10,927 30% 569
Legal Services 157 548 1% 527
Miscellaneous Repair Services 92 473 1% 482
Auto Repair. Services, Garages 359 2,557 7% 425
Educational Services 32 435 1% 404
Business Services 492 11,993 33% 387
Personal Services 261 1,704 5% 268
Membership Organizations 62 507 1% 263
Social Services 167 2,967 8% 235
Hotels, Other Lodging Places 75 1,612 4% 226
Amusement and Recreation Services 93 963 3% 216
Private Households 156 210 1% 189
Motion Pictures 43 433 1% 151
Miscellaneous Services 2 - - -
Museums, Botanical, Zoological Gdns 1 - - -
TOTAL 2,826 36,806 100% $420
COUNTIES : Henry, Butts, Clayton, Newton, Rockdale, Spalding.
Hyphens indicate data is unavailable or does not meet disclosure criteria.
GOLF COURSE FRONTAGE SALE
LOCATION: Lot 31 Gresham Landing
District 6 Land Lot 19
Henry County, Georgia
SIZE: 2.035 Acres (88,644 SF)
SALES PRICE: $356,200 (Site)
SALES PRICE/UNIT: $4.10/SF ($174,938/Acre)
DATE OF SALE: April 22, 1993
GRANTOR:. Killearn Properties of Ga. Inc.
GRANTEE: Econ 0 Check Corporation
DEED BOOK/PAGE: 1629-165
ZONING: C-2 Commercial
UTILITIES: All Available
MAP REF: 51-01-28+
COMMENTS: This sale represents one of two golf
course frontage commercial site sales
in Corporate Center at Eagles Landing,
and the most recent. Recent office
building completion in 1997. Access is
from Gresham Way. Building faces along
No. 1 fairway of Eagles Landing Golf
Course. Sale indicates value of premium
of golf frontage location.
GOLF COURSE FRONTAGE SALE
LOCATION: Gresham Way
District 6 Land Lot 19
Henry County, Georgia
SIZE: 2.00 Acres (87,120 SF)
SALES PRICE: $300,000 (Site)
SALES PRICE/UNIT: $3.44/SF ($150,000/Acre)
DATE OF SALE: August 17, 1990
GRANTOR: Atlanta Tech Center, Inc.
GRANTEE: James V. Gresham
DEED BOOK/PAGE: 1209/159
ZONING: C-2 Commercial
UTILITIES: Water, sewer, gas, electricity,
telephone
COMMENTS: This is the first of two golf front
site sales within Corporate Center
at Eagles Landing. Later developed
with a 19,000 SF luxury quality office
building that fronts the No. 1 Green of
Eagles Landing Golf Course. Additional
access from Eagles Landing Way from within
gated community of Eagles Landing.
Sale is recognized as dated, but remains as
a good indicator of market for this type of
commercial office location. As a site sale
from this time period, the sale indicates an
upward adjustment for golf course frontage.
Insert appraiser's Henry County Demographic Overview of comparable
APPRAISER QUALIFICATIONS
ROBERT WILSON, IFAS
GEORGIA CERTIFIED GENERAL REAL PROPERTY APPRAISER-1497
139 HAMPTON ROAD HEIGHT: 6'0"
FAYETTEVILLE, GA 30214 WEIGHT: 180
PHONE: 460-9476 (H) 719-0644 (0) HEALTH: EXCELLENT
EDUCATION:
Rutherford High School - Panama City, Florida 1963-1967
Warner Robins High School - Warner Robins, GA. 1967
(Graduate)
Middle Georgia College - Cochran, GA. 1967-1970 Graduate
(Associate Arts Business Administration)
Georgia State University - Atlanta, GA. 1971 to present
(Second Quarter Senior Marketing Major).
EXPERIENCE:
Ron-Fra Development Corp.
Residential Construction 1971-1974
Clayton County Assessors office
Residential Staff Appraiser III - 1975-1978:
Responsible for all residential construction/
Appraising 12th District, Clayton County.
Commercial Appraiser IV - 1978-1982: Responsible for all
commercial/industrial/apartment construction, appraising
and formulation of pricing schedules.
Chief Appraiser: 1982-1986: Responsibilities to include
daily administration of Clayton County Tax Assessors Office.
Directly supervised staff of 22 appraisers/clerks/support
personnel with annual objective of maintaining approximately 6
Billion Dollar Tax Base. Personal appraising responsibilities of
Million Dollar accounts and Hartsfield International Airport.
Bob Sorrells and Associates - 1986-Present: Associate Member
Independent Fee Appraiser, Residential/Commercial Industrial/
Accounts.
ROBERT WILSON
PAGE TWO
PROFESSIONAL COURSES AND AFFILIATIONS:
Georgia Association of Assessing Officials - GAAO International
Association of Assessing Officers - IAAO
National Association of Independent Fee Appraisers:
N.A.I.F.A. - Vice President-Tara Chapter, 1990 -
N.A.I.F.A. - President Tara Chapter, 1991 - Dekalb Board of
Realtors-Affiliate Member-1988 to 1991
Right of Way Association-Member -1990/1991
GAAQ Course I - General Appraisal Techniques
GAAO Course IA - Advanced Appraisal Techniques
GAAO Course II - Income Approach to Value
GAAO Course IIA - Advanced Income Applications
GAAO Course III - Valuation of Personal Property
GAAO Course IV - Valuation of Rural Land
GAAO Course V - Property Mapping Workshop
GAAO Workshop - Shopping Center Valuation
IAAO I - Fundamentals of Real Property Appraising
IAAO II - Income Approach to Valuation.
GAAO Seminar - Shopping Center Evaluation Techniques.
GAAO Seminar - Computer Techniques to Evaluation.
Avmark Aircraft Appraisal Seminar - Aircraft appraising
N.A.I.F.A. - Course I - General Principles of
Residential Appraisers
N.A.I.F.A. - F.H.L.M.C.- Single Family Report Writing
Seminar
Employee Relocation Council - Relocation Appraisal
Seminar
N.A.I.F.A. - Uniform Standards of Professional Appraisal
Practice
N.A.I.F.A. - Fannie Mae Guidelines for condominiums
& Deminimus PUDS Seminar
N.A.I.F.A. - Condemnation Seminar
N.A.I.F.A. - Market Abstraction Seminar
Marshall & Swift - Cost Approach Seminar
ROBERT WILSON
PAGE THREE
CERTIFICATES & DESIGNATIONS:
Certified General Real Estate Appraiser-
State of Georgia #CO01497 - 1991
Senior Member of National Association of Independent Fee
Appraisers, I.F.A.S. Designation - Cert. #1225 - 1988
Certified by Georgia Department of Revenue
as Class IV Appraiser - 1976
Certified by Georgia Department of Transporation
as Class II Appraiser-Right of Way - 1986
Certified by Clayton County Board of Assessors
as Chief Appraiser - 1982
APPRAISER QUALIFICATIONS
B.G. SORRELLS, IFAS
1950A Highway 85 North
J & R Plaza
Jonesboro, Ga 30236
Ga. Cert. Gen. #1154
EMPLOYMENT: 1964-Present Self-employed, Real Estate
Appraisals & Consulting-Residential,
Commercial and Acreage and Property Tax
Consulting.
MILITARY: 1953-1955 U.S. Army, Korean War Veteran,
Discharged 1955.
EDUCATION: 1952 Russell High School, East Point,
Georgia.
1956-57 Georgia Institute of Technology.
PERSONAL: Born April 26, 1934, East Point, Georgia.
Married: Wife-Sue, Children-Sharon, Danny and
Renee. All are members of Atlanta Baptist
Church, College Park, GA. Health-Excellent,
no physical limitations. Height 6'1", weight
195 pounds. Homeowner: Route 1, Box 217,
Mockingbird Lane, Brooks, GA. 30205. Hobbies-
Fishing and golf
SUMMARY: After being discharged in 1955, employed at
Lockheed Aircraft as a Paint and Plastic
Supervisor, while there attended school at
Georgia Tech-two years toward Industrial
Management Certificate. 1957-Atlanta Terminal
Station and Southern Railway System as Special
Agent (Railroad Police), consisting of all
types of police work and company security.
Attended many schools and seminars conducted
by the F.B.I. and other Law Enforcement
Agencies, worked with and assisted Federal,
State and local Police Departments, District
Attorneys and Courts.
During this time, I completed study and became
a licensed Real Estate Broker. At that time,
I resigned from the Railroad and entered the
Real Estate Business full time. Along with
other duties of the business, I compile
appraisals and evaluations for companies,
individuals, attorneys, estates, etc. In my
Real Estate and Appraisal career, I have
attended many schools, seminars and lectures
pertaining to the business. Please see
attached supplement.
Currently serving as member of Georgia State
Appraiser Board, Vice Chair. I am past
president of the Atlanta Chapter of the
National Association of Independent Fee
Appraisers for 1985, past president of the Old
National Business and Professional Association
and the Atlanta Airport Optimist Club. I am
past Regional Governor-South Central Region
for 1987-1990 for the National Association of
Independent Fee Appraisers, and member of the
National Professional Standards Committee and
serve on the Board of Director's for N.A.I.F.A.
I am now or have been a member of the Board of
Directors of several corporations and am associated
with most of the Civic and Professional Organizations
in the area. I am also serving as N.A.I.F.A.'s voting
delegate and Chairman to the Georgia Appraiser's
Coalition. Awarded Appraiser of the Year for 1991 NAIFA.
I feel that I hold some degree of trust and respect among
the fellow members of the community.
REFERENCES: Business and personal references can be
furnished upon request.
RE: SUPPLEMENT TO RESUME OF BOB SORRELLS:
EDUCATION: Russell High School.
Georgia Institute of Technology (Industrial
Management).
Georgia Institute of Technology (Seminars on
Real Estate and Appraising). Georgia State
University (Seminars on Real Estate &
Appraising). National Association of Independent
Fee Appraisers (I.F.A. Member Exam). Senior Exam-National
Association of Independent Fee Appraisers. Atlanta Area
Tech (Commercial Real Estate, Insurance and Appraising
courses). Most courses offered by the National Association
of Independent Fee Appraisers. Tax Arbitration Courses (Ad
Valorem). Marshall and Swift Cost Seminars - Commercial and
Residential.
S.R.E.A. (Courses and Seminars on Appraising).
CERTIFICATES & DESIGNATIONS:
State of Georgia certified Real Estate Appraiser
#1154. Member International Right of Way
Association Senior Member of National Association
of Independent Fee Appraisers. I.F.A.S. Designation
Certificate #1224. Awarded 1991 Appraiser of the Year
For N.A.I.F.A. Veteran's Administration Fee Appraiser
#X238. Dept. HUD, Fee Appraiser #2151. Licensed Real
Estate Broker, Georgia #4871.
APPRAISAL EXPERIENCE:
Single Family Residence (including construction loans
& REO's) Vacant lots and acreage-including farms.
Commercial/Industrial properties. Multi-Family
dwellings. Church, school and special use properties.
Fulton County Tax Arbitration. Clayton County Tax Appeals.
School Buildings, Fulton, Clayton, Fayette Counties and City
of Atlanta Boards of Educations. Special use properties
for Federal, State and County Government Agencys.
Various properties for U. S. Bankruptcy Court and U.S.
Marshalls Office. Various Properties, Atlanta Airport
Authority, including Air Rights and Runway Locations.
APPRAISAL EDUCATION:
Course 1.1 - Principles of Real Estate
Appraising.
Course 2.lA - Income Property Appraising I.
Course 2.lB - Income Property Appraising II.
Course 1.2 - Manufactured Housing/Mobile Home
Appraising.
Course 1.4 - Review Appraising.
Course 1.7.- URAR Lenders Seminar.
Course 4.1 - FHLMC Single Family Report
Writing.
Course 4.2 - FHLMC Small Residential Income
Report Writing.
Course 4.3 - Narrative Report Writing.
Course 5.1 - Condemnation Seminar.
Course 6.1 - Investment Analysis.
Course 6.2 - Applying Compound Interest in
Today's Real Estate Market.
Course 6.4 - Mini Math for Appraisers.
Course 7.1 - Residential Cost Approach
(Marshall & Swift).
Course 7.2 - Commercial Cost Approach
(Marshall & Swift).
Course 9.1 - Appraising the Condominium.
Course 11.1 - Professional Standards.
FHLBB - Seminars on R-41-A-B-C.
Seminars on Appraising Historic Properties.
Employee Relocation Seminars.
SUPPLEMENT TO RESUME OF BOB SORRELLS:
APPROVED TO APPRAISE AND REVIEW BY THE FOLLOWING:
(PARTIAL LIST)
Veteran's Administration Fee Appraiser, Department of HUD-FHA,
FNMA, Freddie Mac, Beneficial Finance Companies, Delta Airlines
Credit Unions, Landmark Financial Services, Liberty Mortgage Corp.,
Merchants Bank, First State Bank, Bank of Coweta, Newnan Savings
Bank, Clayton National, Trust Company of Georgia, First Union
Mortgage Company, Tara State Bank, Wachovia Bank, Bank South, N.A.,
Bank South Mortgage, Southern Federal Savings and Loan, First National
Bank of Hency County, Chemical Financial Services Corp., Equitable
Mortgage Corp., Griffin Federal, Barnett Bank, First Bank & Trust,
United Bank Corp., Norwest Mortgage Corp., City Mortgage, BancBoston
Mortgage, Home Federal Savings and Loan, Resolution Trust Corp.,
American Family Life Ins. Corp, Peach State Bank, Nations Bank, Citizens
Bank and Trust of Fayette Co., Gulf States Mortgage Corp., Banker's First
Mortgage. Numerous legal firms for wills, estates, etc. Individuals and
corporations, Fulton and Clayton County Tax Appeals, Federal, State
and Local Governments, Atlanta Airport Noise Mitigation Program, F.A.A.,
Lincoln Services, ChemExec, Home Equity, Merrill Lynch Relocation
Companies, S.B.A. and Department of Transportation. Certified as expert
witness in Federal and State courts.
REAL ESTATE AND RELATED EXPERIENCES:
Real Estate Appraiser and Broker; Real Property Tax consultant for all
types of property, 1965 to present. Developer and contractor of
subdivision 1972 to 1974.
Owner of Bob Sorrells and Associates, Real Estate
Appraisers and Consulting.
RECERTIFICATION:
The National Association of Independent Fee Appraisers has a
mandatory program of continuing education for designated members.
Those who meet the standards of the program are considered to have
recertified. I am certified under the program through December 31st,
1998.
(b 3.) - APPRAISAL OF WINDSONG DATED AS OF NOVEMBER 1, 1996
PREPARED BY BOB SORRELS & ASSOCIATES
PREPARED FOR
FIRST COMMUNITY BANK
APPRAISAL OF
WINDSONG PLANTATION
UNITS VI AND VII
A PROPOSED 134 LOT
SINGLE FAMILY
RESIDENTIAL DEVELOPMENT
LOCATED IN STOCKBRIDGE
HENRY-COUNTY, GEORGIA
VALUE ESTIMATE AS OF
NOVEMBER 1, 1996
PREPARED, BY
BOB SORRELLS AND ASSOCIATES
BOB SORRELLS & ASSOCIATES
REAL ESTATE APPRAISERS & CONSULTING
EE APPRAISERS - VA - FHA
RESIDENTIAL - COMMERCIAL - ACREAGE
INDUSTRIAL - SPECIAL USE - ESTATES
1950 A HWY. 85 N.
J & R Plaza
Jonesboro, Georgia 30236
November 10, 1996
First Community
12 North Cedar Street
McDonough, Georgia 30253
Attention: Mr. Burt Blackmon
President
RE: Appraisal of Property
Windsong Plantation-Units VI & VII
A Proposed 134 Lot Development
District 12 Land Lots 2 & 3
Stockbridge, Henry County, Georgia
Dear Mr. Blackmon:
In accordance with your request, we have personally inspected and appraised the
above captioned property. The purpose of this appraisal is to provide a
reasonable and documented Market Value estimate of the fee simple interest in
the subject property. It is our understanding that this report will be used
for internal decision making and possible development financing.
Enclosed is the narrative report containing pertinent data, facts gathered,
and analysis of this information. The report was prepared in conformity with
subject to the requirements of the code of Professional Ethics and Standards Of
Professional Practice of the Appraisal Foundation, the Uniform Standards of
Professional Appraisal Practice ("USPAP4') of the Appraisal Foundation, and
the National Association of Independent Fee Appraisers (NAIFA).
The subject of this report are Units VI and VII of Windsong Plantation, a
proposed 134 lot single family residential development. The property is
located off the north side of Eagles Landing Parkway, just south of the city
limits of Stockbridge, and about four miles northwest of the northern
city limits of McDonough, Georgia, the county seat of Henry county. Access is
very convenient from I-75 at 73 located less than one mile to the west. This
subdivision is a well established part of the Eagles Landing community.
Previous units within this subdivision have been very successful with strong
market acceptance, and very few lots remain. The homes within this development
typically range between $150,000 to $200,000; and this section is expected to
range moderately higher in the $175,000 to lower $200,000 bracket. To date,
eleven lots have been pre-sold to the two primary builders in this development;
J. P. Evans (Oxford Homes) and McMillan-llcDonald Builders. Historically, each
builder has committed to a minimum of 10 lots per quarter period (20 total)
and this trend is expected to continue throughout this development. Each lot
has been flat priced at $32,900 in Units VI and VII and have historically sold
upward of $34,000 to the same.
The assignment requires two primary value estimates. The value of the subject
land, "As Is", or prior to some existing development in progress, which is a
67.70 acre land tract; and "As Proposed" Unites VI and VII of Windsong
Plantation, a 134 lot developed single family subdivision.
Based on our investigation and analysis, it is our opinion that the Market
Value (s) of the fee simple interest of the subject property, subject to the
Limiting conditions and Assumptions contained herein, as of November 1, 1996
is:
As IS: Existinq 67.70 Acres as Undeveloped Units VI & VII
Platted for 134 Future Single Family Lots
by Sales Comparison Approach
$1,140,000
As Proposed: Developed with 134 Single Family Lots
by Income Approach-Discounted Cash Flow Analysis
$3,277,000
by Sales Comparison Approach-Gross Aggregate Retail Value
$4,422,000
Employment of the appraisers was not conditional upon the appraisers producing
a specific value or a value within a given range. Future employment prospects
are not dependent upon the appraisers producing a specified value. Employment
of the appraisers and payment if the fee is not based upon whether a loan
application is approved or disapproved.
We appreciate the opportunity to be of service on this property. Please let
us know if we can be of further assistance to, in this or other real estate
appraisal matters.
Sincerely,
/s/ Robert Wilson, IFAS
ROBERT WILSON, IFAS
Ga. Cert. Gen. No. 1497
Associate Appraiser
/S/Bob Sorrells, IFAS
BOB SORRELLS, IFAS
Ga. Cert. Gen. No. 1154
Chief Appraiser
TABLE OF CONTENTS
STATEMENT OF LIMITING CONDITIONS AND
APPRAISER'S CCORTIFICATION
APPRAISAL REPORT 1
SUMMARY OF SALIENT FACTS AND CONCLUSIONS 2
PROPERTY DESCRIPTION AND LOCATION 4
LEGAL DESCRIPTION 4
PURPOSE, FUNCTION AND DATE OF THE APPRAISAL 4
PROPERTY RIGHT APPRAISED 5
SCOPE OF APPRAISAL 5
APPRAISAL DEFINITIONS 6
RECENT SALES HISTORY 8
COMPETENCY OF APPRAISERS 8
ANTICIPATED MARKETING PERIOD 9
METRO ATLANTA OVERVIEW 11
HENRY COUNTY OVERVIEW 13
NEIGHBORHOOD OVERVIEW 18
DESCRIPTION AND ANALYSIS OF THE SUBDIVISION 20
ASSESSMENT TAXES ZONING DISTRICT 23
FLOOD MAP, TAX MA, DEVELOPMENT PLANS ++
PHOTOGRAPHS 24
HIGHEST AND BEST USE 27
THE APPRAISAL PROCESS 29
APPRAISAL METHODOLOGY 30
SALES COMPARISON APPROACH-Undeveloped Acreage 32
SUMMARY OF LAND SALES-Location Map 33
COST APPROACH 46
SALES COMPARISON APPROACH-Improved Lot Sales 49
SUMMARY OF LOT SALES-Location map 50
INCOME APPROACH-Developer Analysis 61
RECONCILIATION 66
EXHIBIT SECTION 68
APPRAISER QUALIFICATIONS
LIMITING CONDITIONS AND ASSUMPTIONS
This appraisal is made subject to the following:
1. The appraiser assumes no liability for structural
features not visible on ordinary careful inspection, nor
do they assure any responsibility for sub-surface or
foundation conditions.
2. Certain information used in this appraisal has been
furnished by others. The sources and the information are
considered to be reliable, but cannot be guaranteed.
3. It is assumed that the physical characteristics of the
property, with regard to meets and bounds and road
frontages, are essentially as depicted on-the plat of the
property, attached herewith as an Exhibit.
4. No responsibility is assumed for matters legal in
character, nor is any opinion rendered as to title, which
is assumed to be good and marketable. Normal mortgage
loan encumbrances and utility easements are considered to
exist.
5. If the property is under construction or proposed, it has
been assumed that the mortgage banker, in soliciting
funds for this project, has furnished to the user of this
report complete plans, specifications, survey and
photographs of the land and improvements.
6. The contents of the appraisal are for limited private use
only. If, by virtue of this report, it becomes necessary
to testify in Court in support of the value estimate an
additional fee will be charged. If this report becomes
property of any other party, other than the addressee or
the person who has paid the fee connected herewith,
permission must be obtained for production or
additional copies from the original addressee, and
additional fees will be charged for any further
consultation, reappraisal, or review of this property.
Any subsequent copies of this report will be furnished at
a cost of $50.00 per copy, plus typing/computer charges,
if necessary, plus a base charge of $50.00.
7. Disclosures of the contents of this appraisal report are
governed by the By-Laws and Regulations of the National
Association of Independent Fee Appraisers.
Neither all nor any part of the contents of this report (especially any
conclusions as to value, the identity of the firm with which he is connected,
or any reference to the National Association of Independent Fee Appraisers or
to the I.F.A.S. designation) shall be disseminated to the public through
advertising media, public relations media, sales media, news media, or any
other public means of communication without prior written consent and
approval of the undersigned.
In estimating the value of the subject property, every effort has been made to
accurately reflect the physical condition of the improvements as of the date
of inspection. However, the undersigned appraiser is not qualified to render
opinions as to the integrity, or capacity, of the structural, mechanical,
electrical, or plumbing systems, nor does- he warrant or imply, by virtue of
this report, the condition/capacity of said systems beyond those written
observations included in the body of the appraisal report. Unless otherwise
stated, it is assumed that all systems are in good working order and
typical for the property type in its locale as of the date of inspection. It
is further recommended, in conjunction with the appraisal, that "client"
obtain at his/her expense qualified opinion(s) as to the condition or capacity
of such systems.
It is also recommended that the client obtain at his/her expense, qualified
opinions as to the presence, if any, of toxic materials, chemicals,
insulation, radon gas, soil or water contamination or any other contamination
undetectable by normal observations during the appraisers inspection of
the property. Any reported findings contrary to the assumptions or stated
observations included in this report could affect the estimated value of the
property as stated.
The appraisal assignment was not based on a requested minimum valuation, a
specific valuation, or the approval of a loan.
CERTIFICATION AND ACKNOWLEDGMENT
OF PROFESSIONAL PARTICIPATION:
The appraiser hereby certifies:
1. That he does not have undisclosed interest of property, the subject of
this report. Either, past, present or contemplated.
2. That he does not have any personal interest or bias with
respect to the subject matter of this appraisal report or
the parties involved.
3. To the best of my knowledge and belief the statements of
fact contained in the appraisal report, upon which the
analyses, opinion and conclusions expressed herein are
based, are true and correct.
4. The appraisal report sets forth all of the limiting
condition imposed by the terms of my assignment, or by
the undersigned, affecting the analysis, opinions, and
conclusions contained in the report.
5. This appraisal report has been made in conformity with
and is subject to the requirements of the Code of
Professional Ethics and Standards of Professional
Practice of the Appraisal Foundation, the Uniform
Standards of Professional Appraisal Practice,("USPAP") of
the Appraisal Foundation, and the National Association on of
Independent Fee Appraisers (NAIFA).
6. That the employment and compensation of the appraiser, or
his associates, for rendering the opinions expressed
herein, are not contingent upon the values expressed, nor
upon any other factor, other than' the preparation and
delivery of this report for the predetermined fee.
7. Robert-Wilson, IFAS, did personally inspect the property
which is the subject of this report. Bob Sorrells, IFAS,
did not make a personal inspection of the property.
8. Certain information upon which the opinions of value are,
based is gathered, maintained, verified and prepared by a
research staff in the employ of the appraiser. The staff
is supervised by the appraiser and is judged by ]Rim to be
of competent, professional ability Acknowledgment is
made of their contribution. Names professional
qualifications, and extent of their participation can be
furnished to the client upon request.
9. The appraisal assignment was not based on a required
minimum valuation, a specific valuation, or the, approval
of a loan.
10. Recertification:
The National Association of Independent Fee Appraisers
has a mandatory program of continuing education for
designated members. Those who meet the standards of the
program are considered to have recertified. I am
certified under the program through December 31st, 1998.
/s/ Robert Wilson, IFAS
ROBERT WILSON, IFAS
Ga. Cert. Gen. No. 1497
Associate Appraiser
/S/Bob Sorrells, IFAS
BOB SORRELLS, IFAS
Ga. Cert. Gen. No. 1154
Chief Appraiser
RESIDENTIAL LAND APPRAISAL REPORT
OWNER/BORROWER: Killearn Properties" Inc.
ADDRESS: 600 Country Club Drive
CITY/STATE: Stockbridge, Georgia'@0281
PHONE: (770) 389-9800
LENDER/CLIENT: First Community Bank
STREET ADDRESS: 12 North Cedar Street
CITY/STATE: McDonough, Georgia 30253
PHONE: (770) 957-6607
PROPERTY INFORMATION: Windsong Plantation VI & VII
STREET@ADDRESS: Off NIS Eagles Landing Parkway
CITY/STATE: Stockbridge, Georgia 30281
COUNTY: Henry
DISTRICT: 12th
LAND LOT: 2 and 3
AERO MAP NUMBER: 427-M-12
ATLANTA SMA: 0520
STATE/COUNTY CODE: 13151
CENSUS: 703.02
TAX ASSESSMENT MAP: 50-01-28.1 (Part)
FEMA FLOOD MAP: 130468-0070B (11/02/1983)
OWNERSHIP: Killearn Properties Inc of Ga.
File No. F1127LN
PROPERTY DESCRIPTION AND LOCATION
The subject of this. report are Units VI and VII of Windsong Plantation, a
proposed 134 lot single family residential development. The property is
located off the North side of Eagles Landing Parkway, just south of the city
limits of Stockbridge, and about four miles northwest of the northern
city limits of McDonough, Georgia, the county seat of Henry County. Access is
very convenient from I-75 at 73 located less than one mile to the west. This
subdivision is a well established part of the Eagles Landing community.
Previous units within this subdivision have been very successful with
strong market acceptance. The homes within this development typically range
between $150,000 to $200,000; and this section is expected to range moderately
higher in the $175,000 to lower $200,000 bracket.
The subject is situated approximately 21 radial miles south of Atlanta's
central business district and 10 miles south of Hartsfield International Airport
.
LEGAL DESCRIPTION
The subject property is located in the 12th Land District, Land Lots 2 and 3,
of Henry County, Georgia. The Henry County Tax Plat identifies the property
as part of parcel number 50-01-28.1. The subject lots will be further
described as Windsong Plantation and are individually identified by Block and
Lot in the Summary of Salient Facts, and the Property Description section of
this r6por-@-.
PURPOSE, FUNCTION, AND DATE OF APPRAISATO
The purpose of the appraisal has been to estimate the Market Value of the
property "As Is"-a residential acreage tract and "As Proposed"-completed as a
developed residential subdivision totaling one hundred and thirty four
developed lots. The appraisal will be used for a development loan by the
client and may not be applicable to other uses. The value estimate expressed
herein considers November 1,1996 as the effective date of value.
Construction time for development is estimated between three to five months,
depending on Winter months productive days.
PROPERTY RIGHT APPRAISED
The property right appraised is the fee simple ownership fee simple is an
absolute fee, which is an inheritable estate and a fee which limitations
to. any particular class of heirs restrictions, but subject to the limitations
of eminent domain, escheat, police power and taxation.
The title to the property is assumed to be free and clear of any liens or
encumbrances.
SCOPE OF THE APPRAISAL
This appraisal is intended to comply with, the Uniform Standards of the
Professional Appraisal Practice promulgated by the Appraisal Standards Board
of the Appraisal Foundation and the Guide Notes to the Standards of
Professional Appraisal Practice adopted by the National Association of
Independent Fee Appraisers. The standards contain binding requirements and
specific guidelines that deal with procedures to be followed in developing an
appraisal, analysis, or opinion. These uniform standards set the requirements
to communicate the appraisers: analysis, opinion, and conclusions in a manner
that will be meaningful and not misleading in the marketplace.
A narrative appraisal report on the, subject property has been prepared. The
subject property data such as land size, location, utilities and zoning are
considered and presented in this [email protected]. Market data, including sales of -
similar large acreage tracts purchased for development, subdivision
development. Costs, residential lot absorption trends and applicable discount
rates were researched, analyzed, and if applicable, pr6st6hted in the report.
The data has been used to estimate the highest and best use of the subject
Property and to estimate the market value.
The appraisers knowledge and experience with respect to the detection and
measurement of hazardous substances. Therefore, this assignment does not
cover the presence or absence of such substances as discussed in the Limiting
Conditions and Assumptions section. However, any visual or obviously known
hazardous substances affecting the property will be reported.
The documentation necessary to support our estimate of value is contained in
this appraisal report. Market data has been collected and 'analyzed.
Comparable sales were chosen for their similar highest and best uses as
outlined in this report. All sales were analyzed and compared to the subject
present on their similarities and dissimilarities. The present use the subject
is undeveloped land. Subdivision of the property is feasible due to its high
density zoning, location, and availability of all public utilities.
APPRAISAL DEFINITIONS
Market Value may be defined as follows:
"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 is the consummation of a
sale as of a specified date and passing of title from
seller to buyer under conditions whereby:
1) Buyer-and seller are typically motivated.,..
2) Both parties are well informed- or well advised and
each acting in what -he considers his own best
interest.
3) A reasonable time is allowed for exposure in the
open market.
4) Payment is made in terms of cash in U.S. dollars or
in terms of financial arrangements comparable
thereto.
5) 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.
The source of the foregoing definitions was the "Income
Property Appraising Textbook" published by the National
Association of Independent Fee Appraisers.
Fee simple ownership may be defined as an absolute, ownership unencumbered by
any other interest or estate subject on:6y to the four powers of government."
The four governmental powers include eminent domain, escheat, police power and
taxation.
Leased Fee, Estate (Interest) is defined as "an ownership interest held by a
landlord with the right of use and occupancy conveyed by lease to others; the
rights of lessor or the leased fee owner and leased fee are specified by
contract: terms contained within the lease."
Fee Simple Title (Interest) is defined as -"a title that signifies ownership
of all rights in a parcel of real property subject only to the limitations of
the four powers of governmental
As-Is value is defined as the actual physical, legal, economic, and political
status of the property on the effective date of valuation.
Pair Value is defined as "the cash price that might reasonably be anticipated
in a current sale under all conditions requisite to a fair sale. A fair sale
means that buyer and seller are each acting prudently and knowledgeably, and
under no necessity to buy or sell-i.e., other than in a forced or liquidation
sale. The appraiser should estimate the cash price that might be received
upon exposure to the open mark4 f or a reasonable time, considering the
property type and local market conditions. When a current sale is unlikely -
i.e., when it is unlikely that the sale can be completed within 12 months-the
appraiser must discount all cash flows generated by the property to obtain the
estimate of fair value. These cash flows include, but are not limited
too, those arising from ownership, development, operation, and the sale of the
property. The discount applied shall reflect the appraiser's judgement of
what a prudent, knowledgeable purchaser under no necessity to buy would be
willing to pay to purchase the property in a current sale. Whenever the
appraiser believes that more than one year is necessary for a fair sale of the
property, the appraisal shall state and justify the estimated time and state
the annual discount rate applied.
RECENT SALES HISTORY
The present owner (s) of record is shown as Killearn Properties Inc. of
Georgia, formerly known a.4 Atlanta Tech Center Inc. Killearn Property was
owner of record for a period of time exceeding three years. The last known
recorded deed is shown as Deed Book and Page 1271-142 thru 144 on the property
record card, with a date indicating February 20, 1996. Other corporate name
ownership is known prior to this date, transferred internally. The property
which consists of 67.70 undeveloped acres is part of a larger tract of land
found toward the northern end of the Eagles Landing development.
No oth6r transfers of the subject property are known within the last three
years.
COMPETENCY OP APPRAISERS
With reference to qualifications of appraisers in the Addendum and a Bob
Sorrells and Associates resume on file with the client, Bob Sorrells, IFAS and
Robert Wilson, IFAS both have had previous appraisal experience with this type
of property and are local appraisers very familiar with immediate market
area. In the time period between 1992 to present,, we have performed over 175
similar residential subdivision appraisals in Henry, Clayton, Fayette, Coweta,
Spalding, and South Fulton Counties for various lending institutions to
include Wachovia, SouthTrust, Bank South Mortgage, Southern Crescent Bank,
Tara State Bank, Bank of Coweta, Griffin Federal, Fayette County Bank,
Citizens Bank and Trust Newnan Savings Bank, First State Bank, among others.
ANTICIPATED MARKETING PERIOD
The subject is a 67.70 acre tract of developing acreage located toward the
southern end of Stockbridge city limits and just north of the northern city
limits of McDonough, the county seat of Henry County. The property is
currently zoned RM, a high density residential classification, has a
permitted density ratio of 1.98 lots per acre, with all utilities available
or within relatively close proximity. The property is contiguous to
previous development in Windsong Plantation which has achieved a very
successful market acceptance over the last several years. The previous
development phases include the primary access boulevard, Country Club Drive
and entry gates in place, as well as the subdivisions amenity package that
includes a high quality pool, pool house, tennis courts and parking lot. Each
contributes significantly to the subject property which must access through
this pre-existing development. The subject property is found within one mile
of Exit 73 at I-75 and Eagles Landing Parkway Jodeco Road, and is within
walking distance to a significant amount of ancillary development to include a
new Publix Shopping Center, Corporate Center Business Park, and Henry General
Hospital. Acreage tracts with development potential, and particularly high
density ratios, are in continuing demand, with positive interactions between
buyer and seller. The subject is considered within this market, and as such
is considered very desirable for it is proposed use to a number of
prospective purchaser's requiring, either good development land or land for
speculative holding.
In order to estimate a normal marketing period necessary to expose the
property to achieve, a fair sale, several assumptions are employed.
These include (a) the property should be priced at a reasonable markup over
market value as typically employed by sellers of similar type properties.
Overpricing the property will prolong the marketing period; (b) the property
should be actively exposed and aggressively marketed to potential purchasers
through normal marketing channels used by sellers of similar type properties;
(c) the sale should be consummated under the terms and conditions of
the definition of market value required by governmental regulations set forth
in the Purpose, Function, and Date of Appraisal section which preceded this
section. Using these prerequisites, a marketing period of approximately
twelve months or less should be appropriate if the property is competitively
priced and aggressively and professionally marketed. As developed residential
lots, the absorption is, discussed in the Income Section of the report.
INSERT AREA MAP SHOWING SUBJECT
METROPOLITAN ATLANTA OVERVIEW
Relative to the appraisal of any form of real estate, the underlying
demographic and economic forces of th4 surrounding community should be
thoroughly considered as they "affect the property being appraised.
Potential demand for real estate is a product of the growth and stability of
its environs. For this basic reason, a brief synopsis of the Atlanta
metropolitan area including Atlanta as an individual entity, is deemed an
integral part of this analysis. A location map is included within this
section.
Atlanta is located in the northwestern portion of Georgia and is the state's
capital and largest city. In 1960, the Atlanta region became the first
metropolitan area in the Southeast to reach a population level of 1.0
million. The Atlanta region (nine-county area) has experienced a rapid
growth in population in recent years, increasing,37% between 1960 and 1970,
26% between 1970 and 1980 and between 198.0 and 1990. The current population
is estimated to be approximately 2.847 million and is growing at an estimated
annual rate. Atlanta is currently, ranked as the eighth largest MSA in the
nation in size of population according to sales & Marketing Management's 1995
Survey of Buying Power Demographics USA.
The Atlanta Metropolitan Region has played, and will continue to play a major
role in the continued growth of Georgia and Southeastern United States. It
should continue to represent the major employment hub for the "Sunbelt" region.
The growth is supported by the steady increase in population the number of
construction starts from residential 'and commercial structures, the
diversification of the work force, and the constant efforts to improve the
regional transportation system. Atlanta is already the center for federal
government operations in the Southeast and home of the southeast
regional offices of the Federal Reserve Bank, the Resolution Trust Corporation
(RTC), the Federal Deposit Insurance Corporation (FDIC), and the' Office of
Thrift Supervision (OTS). In addition, about 450 of Fortune's 500 largest
industrial firms have operations in the Atlanta region, and fourteen
corporations, including Coca Cola, Delta, Gold Kist Fuqua, Georgia Pacific,
National Services Industries, Royal Crown, Home Depot, and Oxford Industries,
are headquartered here. Further Holiday Inn and UPS moved their headquarters
to Atlanta in 1991. Hartsfield Atlanta International Airport played a major
role in the city's growth as an international city as well as a national
convention center, Atlanta, once an aging city with serious problems, emerged,
as one of the most dynamic met: areas of the 1980's. The foundation of the
area's rejuvenation was established during the 1970's with the construction
of Hartsfield International Airport. The facility, which remains a model
for other airports throughout the nation offers direct access to most U.S.
markets, has made the area particularly attractive to businesses with
national operations. The airport along with the construction of a number of
world class hotels, have made the Atlanta area one of the nation's top
convention centers as well. With the addition of new high quality office
properties, Atlanta continues to attract large corporations.
In recent years the Atlanta area has been experiencing an expansion in the
economy, set forth by the announcement of the 1996 Summer Olympics. Major
relocations by companies like UPS and Holiday Inn Corporation, coupled with
the recently held 1996 Summer Olympics should set the pace for economic well
being within the near future.
The subject is situated approximately seventeen radial miles south of the
Atlanta Central Business District.
INSERT LOCATION MAP SHOWING SUBJECT
HENRY COUNTY OVERVIEW
Location
North Henry County is located approximately 12 radial miles southeast of the
Atlanta Central Business District. The county encompasses 331 square miles
and is one of the eighteen counties which make up the Atlanta Metropolitan
Statistical Area. Neighboring counties include Clayton, Dekalb, Rockdale,
Newton, Butts and Spalding. A location map is shown within this section.
Municipalities
There are four municipalities in Henry County. They are Hampton, Locust Grove,
McDonough (the county seat), and Stockbridge.
Population
The 1970 population for the county was 23,724 persons. It increased to
36,309 persons in 1980 according to the U.S. Bureau of Census. This
indicates a 53% growth rate for the decade;. The results of the 1990 census
showed a population of 58,741 for a growth rate of 62% for the most recent
decade. The 1992 county population has been estimated at 63,900 by ARC. The
following chart illustrates the county and municipality populations for 1970,
1980 and 1990:
1970 1980 1990
Henry County 23,724 58,741
McDonough 2,675 2,778 2,929
Stockbridge 1,561 2,103 3,359
Hampton 1,551 2,059 2,694
Locust Grove 642 1,479 1,681
Employment
Henry county employment has been dominated by the manufacturing and
wholesale/retail trade industries since 1970. Major employers within Henry
County are NEC Home Electronics (TV & Computers), Snapper Power Equipment
(farm and garden machinery), Ford Motor Company (southeastern parts
warehouse) Dowling Textile Manufacturing (women's outerwear), and Southern
States, Inc. (electric distributing equipment). Other nearby major employers
of Henry County residents include Danrik Ltd., Delta Airlines, Inc., Dobbs,
International, Georgia Purchasing, J.C. Penney Company, Inc. Hercules, Inc.,
Mobile oil Corporation, Lithonia Lighting and Dundee Mills, Inc. These
employers 'are ,located in neighboring counties which include Clayton, Newton,
Rockdale, and Spalding. Approximately 60% of Henry, County's labor
force commutes to employers outside the county. Snapper Power Equipment
recently made the decision to close its two out of state manufacturing plants
and move them to its headquarters in McDonough. Modifications to the local
plant have recently been completed. In conjunction with this decision, they
have leased a new, nearby 228,400 square foot warehouse to handle warehouse
and distribution activities. Also recently completed in McDonough is a new
600,000 square foot facility which houses Ford Motor Company's south-eastern
parts distribution division. The facility is located in Liberty Industrial
Park. The Nestle Corporation is currently constructing a warehouse and
distribution center at the intersection of I-75 and Georgia Highway 155.
The B K Group recently opened a facility in Technology Point at Eagle's
landing.,
The labor force for Henry county as of December, 1994 was 32,890 persons. The
unemployment rate for Henry County in December was 5.1% in comparison with
5.4% for metropolitan Atlanta, 5.8% for the State of Georgia, and 5.3% for the
United States.
Income
There are approximately 21,900 households in Henry County. Per capita income
in Henry County in 1991 was $17 341 which ranked eighth in the Atlanta
Metropolitan Statistical.Area.
(Source: The Survey of Buying Power,August 24, 1992, published by Sales &
Marketing Management Magazine).
Economic and Development Trends
Until recently the southern counties of the Atlanta Metropolitan Area have
been viewed as a stagnant, slow growing area. Even though, in the past,
development within the southern area cannot be compared to the development and
growth occurring in the northern counties (such as Gwinnett and Cobb) of the
Atlanta MSA, steady growth has occurred. Past demographic and employment
trends
and recent, current, and future commercial, residential, and industrial growth
give the area a positive outlook.
In early to mid 1980's, Atlanta's southern counties began to increasingly
attract the attention of northside, regional, national, and international
developers and investors. The area is now referred to as the "Southern
Crescent". Geographically, the Southern Crescent extends from Rockdale County
to the east, to Coweta County on the west, Clayton, Henry and Fayette counties
in the middle, and Spalding County to the South. Clayton, Fayette, and Henry
counties constitute the heart of the Crescent. This area roughly forms the
shape of a quarter-moon, lies south of I-285, and is anchored on the north by
Atlanta's Hartsfield International Airport. The airport is the major economic
stimulus in the area.
The subject is located within Eagles Landing an important development which is
influencing growth in Henry County, as well as facilitating the changing image
of the southern counties in the Atlanta region. Eagle's Landing, formerly
Atlanta Tech Center, is a 3,000 acre mixed use development of Florida-based
Killearn Properties. It is located in the northeast and southeast quadrants
of the I-r75 and Hudson Bridge Road/Eagles Landing Parkway interchange and
extends east to Georgia Highway 42.
Eagles Landing includes an 18-hole golf course, designed by Tom Fazio, which
was named Best New Course in Georgia several years ago. Overlooking the 18th
hole is the Eagle's Landing Country Club. This is a 51,000 square foot
facility in the "Southern Traditional" style which has five dining rooms and
can accommodate functions for up to, 300 people. Other features of the
country club include health club facilities, a swimming pool, tennis courts,
and a 7,000 square foot tennis pro shop and observation deck. A sixty room
hotel has recently been completed on the grounds.
There are several subdivision developments surrounding the golf course as
well as peripheral locations within Eagles Landing. Golf front homes are
continuing to be built with values exceeding $750,000. The median price of
homes is above $200,000. Windsong Plantation, the subject subdivision is
located on the north side of Eagles Landing Parkway, and is considered the in
the mid-level price range with home sales in the middle $100,000 and up.
Entry level pricing is found at Parkside at Eagles Landing in the lower,
$100,000 range. The developers of Eagle's Landing donated a site on Tunis
Road to the Henry County Board of Education for a school. Eagle's Landing
High School opened in 1990 and reflects the high quality of construction
found elsewhere in the development. A private school, to be known as Windsong
Academy, has also recently opened.
Office development within the Eagle Landing area includes Eagle Is Point which
is a traditional style brick project of two and three-story buildings. When
complete this nine acre development will include up to buildings. This project
is a development of Group VI Corporation. Killearn Properties is developing
Corporate Center Business Park which will stretch along the #1 fairway of the
golf course. It will eventually contain 360,000 square feet of prime office
space in two-story and mid-rise buildings.
Henry General Hospital is located in Eagle's Landing and has recently been
expanded. Henry General Hospital is a full service, 124-bed facility with
approximately 250 doctors on staff. Adjacent to the hospital is the 14-acre
Eagle's Spring Center which is primarily devoted to medical and professional
office space. Crescent Pines Psychiatrist Hospital opened in 1992. One-
third (about 1,000 acres) of Eagle's Landing is designated as light industrial
distribution. Existing enterprises include U S A Box, BellSouth Services
Materials Distribution (supply), BellSouth Services Material Disposition
(salvage), Carbonic Industries, Ply Mart, and Disco, Inc., Group VI
Corporation is developing Phase I of a 400 acre industrial park known as
Technology Pointe. The first building containing 40,000 square feet, and
occupied by B K Group, a cosmetics manufacturing firm, opened in 1992.
There are numerous other industrial centers either proposed or currently under
development throughout Henry County. These include Bethlehem Park, Greenwood
Industrial Park, Hampton Industrial Park, Henry Industrial Park, Industrial
Parkway District, Liberty Park for Commerce and Industry, McDonough
Industrial Center, and Racetrack Road Industrial District. The more
substantial developments have located in Eagle's Landing, Liberty Park for
Commerce and Industry, Greenwood Industrial Park, and Technology Pointe.
The completion of Interstate Highway 675 in the fall of 1987 contributed to
the growth in current and proposed development for Henry County. Interstate
Highway 675 is currently a nine and one-half mile highway which originates
immediately south of Georgia Highway 138 along Interstate Highway 75 and
intersects with the southeastern portion of Interstate Highway 285. I-675
was constructed to alleviate the increasing traffic into the Atlanta Central
Business District.
Currently there is only a moderate amount of development along Interstate
Highway 675. The majority of development is located at its interchange with
Highway 138/Stockbridge Road. However, there are numerous proposed
developments for this stretch of interstate highway. In the coming years this
area should experience increasing growth in population as well as a variety of
development uses.
Conclusions
Henry County is experiencing the majority of its growth within the
Stockbridge and McDonough areas. These two areas are well located near
Interstate Highway 675, Interstate Highway 75, and numerous U.S. and Georgia
highways. The county's strong infrastructure of utilities and road systems
will continue to improve and can readily support the expanding industrial,
residential, and retail/commercial sectors in the immediate future. The
county's government is using foresight in its planning to properly ensure
that the infrastructure will be adequate to permit continued growth.
The county is well located near major employment centers as well as the
Atlanta Hartsfield International Airport and the regional Southlake Mall.
The population and income levels should continue to increase. Unemployment
should continue to be low due to the increasing development in all sectors
in and around the county. Henry County should continue to prosper and should
contribute to and benefit from the economic success of the Southern Crescent.
INSERT MAP SHOWING SUBJECT
NEIGHBORHOOD OVERVIEW
The subject property and it's neighborhood are located in the south in
section of the metropolitan Atlanta area in the suburban community known as
Stockbridge; in Henry County, approximately 10 miles south of Hartsfield
Atlanta International Airport and approximately 18 miles south of the
Atlanta Central Business District.
The neighborhood surrounding the subject has to be defined and analyzed in
terms of the most probable use of the property. As will be supported in the
Highest and Best Use, the most probable use of the subject, as improved, is
considered to be a commercial use. Within this context, the neighborhood can
generally be defined as the immediate area of similar prevailing commercial:
type land uses. Neighborhood boundaries have been delineated based primarily
upon transitions in dominant development characteristics and physical features
such as transportation arteries.
The immediate neighborhood is generally defined as that area west of Highway
42 at the end of Eagles Landing Parkway, to the east end of Hudson Bridge
Road at it's intersection with Highway 351 aka Jodeco Road. Commercially,
this location draws primarily residential property owners from Lake Spivey
(2.0 miles west) to Eagles Landing and it's surrounding subdivisions.
Development within the surrounding area is predominantly single family
residential with institutional uses as schools and churches. Along Hudson
Bridge Road (west) and Eagles Landing Parkway (east) the neighborhood is
found mixed use with commercial, industrial, and multi-family'. The subject
is found near both medical office development in close proximity to Henry
General Hospital to the west, and strip commercial development along Hudson
Bridge Road, Eagles Landing Parkway and Rock Quarry Road.
Along this thoroughfare, other uses found include banks, daycare, veterinary
clinic, professional offices,, medical offices, motels, convenience stores
industrial parks, office parks,, and free standing restaurants. As mentioned,
Henry General Hospital and Eagles Landing form the focal point of
the neighborhood. Thus the subject is found in a very desirable residential
and commercially expanding and demographically appealing neighborhood.
Considering the development of the surrounding properties, and convenient
access to transportation, employment, recreation centers, shopping and school
properties, the subject is considered to have a viable residential appeal and
marketability.
DESCRIPTION AND ANALYSIS OF THE SUBDIVISION
SUBDIVISION NAME: Windsong Plantation
Units VI and VII
MINIMUM LOT SIZE: 100, x 140,
15,000 SF - 0.34 acre
AVERAGE LOT SIZE: 0.43+ Acre
ZONING DISTRICT: RM-Residential
Henry County Zoning
PUBLIC UTILITIES: County Water, Sanitary
Sewer, Natural Gas,
Electricity and Telephone
STREET IMPROVEMENTS: Asphalt paved interior
streets with 50 foot right
of way; concrete curbing
and storm sewer, concrete
side walks, under ground
utilities and street
lights.
STREET LENGTH: 8,200 Linear Feet
LEGAL DESCRIPTION: District,12 Land Lots 2/3
Henry County, Georgia,
TOTAL LAND AREA: 67.70 Acre
YIELD RATIO: 1.98 Lots Per Acre
TOTAL LOTS: 134 Single Family Lots
CLIENT INTEREST: Unit VI Unit VII
Block Lots Block Lots
C 6 > 9 G 9 > 46
E 4 > 2? N 2 > 22
G 8 0 2 > 24
G 47 > 60
N 1 & 23
0 1
0 25 > 30
FEMA FLOOD MAP: 130468-0070B (11/02/83)
Flood Hazard Area*
CENSUS TRACT: 703.02
STATE/COUNTY CODE: 13151
ATLANTA MSA: 0520
AERO MAP: 426-M-12
TAX ASSESSMENT MAP: 50-01-28.1 (Part)
TAX ASSESSMENT: $4,000/Acre (FMV 1996)
COMMENTS:
The subject is Unit VI and VII of Windsong Plantation, a proposed 134
134 single family residential development. The property is located off the
north side of Eagles Landing Parkway, just south of the city limits of
Stockbridge, and about four miles northwest of the northern city limits of
McDonough, Georgia, the county seat of Henry County. Access is very
convenient from I-75 at 73 located less than one mile to the west. This
subdivision is a well established part of the Eagles Landing community
Previous , units within this subdivision have been very successful with
strong market acceptance, and very few lots remain. The homes within this
development typically range between $150,000 to $200,000; and this section is
expected to range moderately higher in the $175,000 to lower $200,000 bracket.
To date, eleven lots have been pre-sold to the two primary builders in this
development; J. P. Evans (Oxford Homes) and McMillan-McDonald Builders.
Historically, each builder has committed to a minimum of 10 lots per quarter
period (20 total) and this trend is expected to continue throughout this
development. Each lot has been flat priced at $32,900 in Units VI and VII
and have historically sold upward of $34,000 to the same.
The previous development phases include the primary access boulevard, Country
Club Drive and entry gates in place, as well as the subdivisions amenity
package that includes a high quality pool, pool house, tennis courts and
parking lot. Each contributes significantly to the subject property which
must access through this pre-existing development.
The development plan calls for essentially extending the existing interior
street of Deerwood Drive located toward the southern end of the development
tract, entering Unit IV. This street progresses northerly terminating in a
culdesac within Unit VII. A second entry street is cut from the north side of.
Country Club Drive, with several interior streets added E6 comprise the total
of 134 lots in both units. Total new street length is shown as 8200 linear
feet.
No subsurface soil conditions are known and are assumed to be environmentally
safe. Appraisers are not qualified to make this type of assessment and
recommend experienced personnel to make this determination if needed by the
client. All building lots are served by public sanitary sewer system, and
all lots are expected to be buildable with no loss due to poor septic fields.
Except for normal underground utility easements, no above ground easements
(ie high voltage) are found or known to exist on this tract that may negatively
impact the marketability or development potential of this tract.
The flood plain noted on the preliminary plans is confined to it's existing
northern boundary with Little Cotton Creek. This creek forms an arc at this
location, and a number of the lots back to the tributary. The flood plain
appears minimal overall, in the range of 2% to 3% of the gross land area. On
an individual lot basis, none of the lots appear significantly affected with
the creek essentially forming the rear yard boundary line. Due to the
relatively steep topography in the area, the homesites are found well above
the crecek line. Lots backing to the creek are further identified as Lots 21
thru 47, Block G, in Units VI and VII.
In conclusion, the property is, located in a popular, rapidly residentially
developing area of Henry County. The property has the convenience of close
access to Interstate Highway systems, all public utilities, close by shopping,
schools and employment. Therefore, the development with 134 single family
lots should be well received in the market place.
ASSESSMENT AND REAL ESTATE TAXES
The current owner of record for tax purposes is Killearn Properties Inc. of
Georgia. The subject is identified as part tax parcel 50-01-28.1 a larger
122.89 acre tract. The 1996 tax valuation, assessment, and tax liability is
found follows for the acreage tract.
Valuation Assessment- Tax Rate Taxes
Land: $491,560 $196,624 $.03604 $7806.32
Improvements: $NA - $NA $NA $NA
Total: $491,560 $196,624 $.03604 $7806.32
- -Georgia assesses property at 40% of the estimated market value established
by the Assessors Office. The effective tax value per acre is $4,000 FMV.
This valuation appears well below realistic market value in our opinion. An
proportionate value for the subject 67.70 acres is calculated at $27O,800 for
the most current taxable year, with a billing estimated $4,300.49 as
undeveloped acreage. Individual lots within previous units have been valued
at $28,000 by the assessors office.
ZONING DISTRICT
The subject found within unincorporated Henry County and is subject to it's
zoning authority. The property is zoned RM-high density residential
development, found within a PUD or Planned Unit Development, being Eagles
Landing. The subject has been approved for single family residential
Development per the proposed plans as submitted and is similar to the existing
Units I thru V previously approved. Minimum building setback requirements and
standards under each classification are summarized as follows:
FRONT YARD 501
SIDE YARD 101
REAR YARD 401
MIN. LOT 0.34 Ac
INSERT MAP OF WINDSONG PLANTATION UNIT 6 & 7
INSERT MAP OF EALGE'S LANDING MASTER SITE PLAN INDICATING SUBJECT
INSERT TAX MAP INDICATING SUBJECT
INSERT FLOOD PLAIN MAP INDICATING SUBJECT
INSERT MAP-WINDSONG PLANTATION ENTRANCE ON EAGLES LANDING PARKWAY AND TYPLICAL
HOME CONSTRUCTION IN ADJOINING UNIT OF WINDSONG
INSERT MAP-VIEW TO SUBJECT POOL AND POOL HOUSE AMENITY AND VIEW TO SUBJECT
TENNIS COURT AMENITY
INSERT MAP-VIEW TO SUBJECT LAND AT END OF DEERWOOD DRIVE AND VIEW TO SUBJECT
LAND FROM END WILLOW HILL LANE
HIGHEST AND BEST USE
Highest and Best Use is defined as:
The reasonable 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 four criteria is the highest and
best use 'must meet are legal permissibility, physical possibility,
financial feasibility, and maximum profitability.
Source: The Dictionary of Real Estate Appraisal, AIREA,
2nd. Edition 1989, Page 149.
Implied in the definition is that the determination of highest and best use
takes into account the contribution specific use to the community and
community development goals as well as the benefits of that use to individual
property owners. Hence, in certain situations of the highest and best use of
land may be for parks, greenbelts, preservation, conservation, wildlife
habitats, and the like.
The highest and best use decision is made on four distinct levels of analysis.
First, all those uses deemed physically possible are selected and gleaned to
arrive at those uses which are legally permissible, generally determined by
zoning regulations and/or deed restrictions. From among the legally
permissible, those found to be feasible, i.e., capable of generating the
greatest income stream are selected as the highest and best use. The
procedural sequence can be outlined as follows:
1. Possible Use (Physical). What uses are physically
possible on the subject site or in the subject
improvements, given the physical characteristics
revealed by property analysis?
2. Permissible Use (Legal). What uses are permitted
under existing zoning and other land use regulations
and controls and under existing deed restrictions,
for the subject property?
3. Feasible Use (Appropriate Use). Among legally
permitted and physically possible uses for the
subject property, which are appropriate given the
characteristics revealed by market, neighborhood and
property analysis? What uses produce any net return,
to the owner or a positive net present value?
4. Highest and Best Use. Among appropriate or feasible
uses for the subject property, which use will
produce the highest present value?
Highest and Best Use must be analyzed and determined as if the property is
vacant and available to be put to the highest and best use, and as improved.
The reason for analyzing the highest and best use of the subject as if vacant
is to define the criteria for selection of the comparable sales to be used
in the valuation of the site because, the sales utilized must have a highest
and best use consistent with the subject. It is also used to form the basis
for determining potential obsolescence if the highest and best use of the site
as if vacant is different from the highest and best use as improved.
In determining the highest and best use of the subject site, the above tests
were applied to the subject. Located less than one mile east of Interstate
Highway 75 with direct access via Eagles Landing Parkway and Country Club
Drive, the property is considered to have very good accessibility. The
size, shape, topography, availability of all public utilities, and location of
the land allow the property to be developed or residential subdivision
development. Therefore, the site provides for a physical adaptable use.
The subject property consists of an irregular rectangular shaped tract of
land zoned RM by the Henry County Zoning Authority. The proposed use as
developed single family residential subdivision is legal and conforming as
zoned.
The subject neighborhood has historically experienced adequate growth levels
and the proposed development and entry mid-level price range of the homes have
shown excellent market acceptance. Given it's location in this residential
developing area, the proposed use is thought to be financially viable and
there is no other known use that would provide a, greater net return to the
property.
Based on the above considerations and after a physical inspection of the
property, it is our opinion that the highest and best use of the subject
property is for it's proposed use as a developed residential subdivision, as a
continuing development of Windsong Plantation.
THE APPRAISAL PROCESS
Purpose of section
The methodology of appraisal process is critical in the valuation of real
property. The development of an estimate of a real property's market value
requires a methodology whereby the assignment is defined, the property is
described, and the required data are identified, researched, categorized
and analyzed. Estimates of value are then developed through
systematic adjustment and capitalization processes under each of the three
traditional approaches. These estimates are then reconciled, and a final
estimate of value is rendered. These three approaches are as follows:
1. Cost Approach
2. Sales Comparison (Market) Approach
3. Income (Capitalization) Analysis
The theory, reasoning and application of these approaches have been refined
over the years. The appraiser believes that the Real Estate Terminology
handbook, revised edition, edited by Byrl N. Boyce and published for the
American Appraisal Institute and the Society of Real Estate Appraisers
in 1981 by the Ballenger Publishing Company, is the best source for the
definitions and bases of application. The three definitions are presented
here.
Cost Approach: That approach in appraisal analysis which is based on the
proposition that the informed purchaser would pay no more than the cost of
producing a substitute property with the same utility as the subject
property. It is particularly applicable when the property being appraised
involves relatively new improvements which represent the highest and best use
of the land or when relatively unique or specialized improvements are located
on the site and for which there exists no comparable properties on the market.
Sales Comparison (market Approach): That approach in appraisal analysis
which is based on the proposition that an informed purchaser would pay no
more for a property than the cost to him of acquiring an existing property
with the same utility. This approach is applicable when an active market
provides sufficient quantities of reliable data which can be certified from
authoritative sources. The direct sales comparison approach is relatively
unreliable in an inactive market or in, estimating the value of properties
for which no real comparable sales data are available. It is also
questionable when sales date cannot be verified with the principals to the
transactions.
Income Capitalization Approach: That procedure in appraisal analysis which
converts anticipated benefits (dollar income or amenities) to be derived from
the ownership of property into a value estimate. The income approach is
widely applied in appraising income producing properties. Anticipated future
income and/or reversions are discounted to a present worth figure through the
capitalization process.
APPRAISAL METHODOLOGY
In this appraisal report, the Market Comparison Approach will be used to
estimate the value of the subject land as undeveloped acreage as well as
individual proposed building lots. The Cost Approach is performed to
estimate the cost of acquiring the land developing the property according to
the plans and specifications submitted. The Income Approach is used to
estimate the present worth of the discounted income stream from the sale of
these lots.
In the Cost Approach, the cost- of developing the subject improvements is
estimated with reference to the Marshall Valuation Service and data from
local developers acquired over the last several years. The nationwide cost
estimating service provides cost data for determining replacement costs
of typical improvements found in residential subdivisions. This estimate of
the replacement cost of the improvements, along the developers anticipated
profit, is then added to the estimated land value for an overall property
value.
The Market Approach yields an estimate of value for the subject by comparing
it with similar properties of the same type and, class which have sold
recently or which are currently offered for sale in the same or competing
areas. The sales price of these comparable properties will tend to set the
range in which the value of the subject property will fall. The Market
Approach is demonstrated for the subject property as an undeveloped acreage
tract, and for estimating the retail value of-individual residential lots.
The Income Approach is initiated by estimating the economic value for the
subject lots. The sale of the individual lots over the term or holding
period is capitalized into a present worth by an appropriate capitalization
technique. Deductions for holding costs are made that are comprised of
marketing/closing costs, and contingencies such as taxes, as well as a
deduction for entrepreneur profit and overhead to the potential investor in
the property. The net proceeds from the sale of the lots are then discounted
by an appropriate rate over, the estimated term or absorption of the lots into
the market.
Personal Property: Not applicable to this assignment.
SALES COMPARISON APPROACH
(Undeveloped Residential Acreage)
The Sales Comparison, Approach, also called the Market Approach, is the most
wi7d'ely used of all valuation methods. The approach is based on the
assumption that property is worth what it will sell for n the absence of undue
stress if a reasonable time is given to find a buyer. Comparable sales of
similar properties to that of the subject being appraised are considered and
adjusted to the facts at hand. Adjustments are made for differences in such
factors as time of sale, location, tract size, topography, access, utilities,
marketability, lot yield, and those other reasons that cause people to utilize
real estate.
Acreage Validation
The value of the subject land has been estimated by an analysis; of the
comparable land sales in the subject area with comparable residential zoning
and development potential. The land sales are analyzed on the basis of sale
price per acre and sales price per undeveloped lot. The methodology is
to make adjustments to the comparable sales for any difference they might
five as compared to the subject site. The comparable land sales range from
$13,600/Acre to $19,350/.Acre on parcels ranging from 12.24 acres to 96.64
acres on an undeveloped lot price, the range fell between $4,879/UD Lot to
$6,785/UD Lot. The comparable sales and a location map are found in this
section. The difference and adjustments to these comparable sales are
analyzed and discussed following the individual profiled land sales.
A summary of the nine land sales follows this page and includes location,
Acreage, size, price per acre, price per undeveloped lot and sale odate.
INSERT COMPARABLE SALES MAP
SUMMARY OF LAND SALES
SALE No. DIST/LL ACRE $/ACRE $/LOT DATE
Subject 12-002 67.70 N/A N/A Current
1 06-042 15.48 $16000 $ 6153 4/96
2 06-052 24.80 $18239 $ 6113 8/95
3 12-006 55.16 $13600 $ 6785 6/94
4 07-163 79.64 $14110 $ 6242 9/94
5 06-438 96.64 $15521 $ 7500 3/95
6 06-048 39.50 $16607 $ NA 9/95
7 12-004 16.85 $17952 $ 4879 12/95
8 07-101 14.87 $15919 $ 4931 4/96
9 05-076 12.24 $19350 $ 7406 4/95
10 06-050 14.17 $16877 $ 4984 10/96
TOTAL LA24D SALES: Ten
TOTAL ACRES SOLD: 351.35 Acres
TOTAL SALES VOLUME: $5,745,510
RANGE IN SIZE: 12.24 Acres to 96.64 Acres
RANGE IN COST PER ACRE: $13,600 to $19,350
MEAN-AVER.AGE COST PER ACRE: $16,352/Acre
RANGE IN COST PER U/D LOT: $4,879/Lot to $7,500/Lot
MEM-AVERAGE COST PER U/D LOT: $6110/UD Lot
ACREAGE SALE NO. I
(Under Contract)
LOCATION: Jodeco Road
District 6, Land Lot 42
Henry County, Georgia
SIZE: 15.485 Acres
SALES PRICE: $247,760
SALES PIZICE/ACRE: $16,000/Acre ($6153/Lot)
DATE OF SALE: September 1996
GRANTOR: Spivey Chase, Inc.
GRANTEE: Hudgins Communities, Inc.
DEED BOOK/PAGE: Not Available
ZONING: R-3 Residential
UTILITIES: All Available
YIELD: 76 Lots (2.60 Lots/Acre)
COMMENTS: This is a 15.485 acre tract located
on the south side of Jodeco Road
about 1.50 miles west of I-75 in
Stockbridge. The tract is being
assembled with additional acreage
found in adjoining property of
buyers (Sale No. To develop as
The Meridian Subdivision with a
total of 79 lots. Yield f or this
tract indicates 2.60 lots per acre.
Divided from Map Parcel 33-2-32.
Lots platted at 12,000 SF each or
0. 27 acre. Sale is pending further
soil analysis of rear site area.
ACREAGE SALE NO. 2
LOCATION: Jodeco Road
District 6, Land Lot 52
Henry County, Georgia
SIZE: 24.804 Acres
SALES PRICE: $452,4OO
SALES PRICE/UNIT: $18,238/Acre ($6113/Lot)
DATE OF SALE: August 11, 1994
GRANTOR: Claude E. Corbin
GRANTEE: Jerry Steele Development Corp.
DEED BOC)K/PAGE: 19-43-087
ZONING: R-3 Single Family Residential
UTILITIES: Water, Sewer, Natural Gas,
Electricity, and Telephone.
YIELD: 74 Lots (2.98 Lots/Acre)
COMMENTS: Situated with access off of Jodeco
Road, location found on west side of
I-7'51." "Close proximity to Hudson
Bridge Road at Exit 73 and Eagles
Landing. Developing with 74 lots as
Plantation Walk Subdivision. Plan
notes a 1.03 acre commercial lot
zoned out of acreage along Jodeco
frontage.
ACREAGE SALE NO. 3
LOCATION: Flippen Road at Walt Stephens Rd.
District 12, Land Lot 6
Henry County, Georgia
SIZE: 55.16 Acres
SALES PRICE: $750,200
SALES PRICE/UNIT: $13,600/Acre ($6785/Lot)
DATE OF SALE: June 1994
GRANTOR: Ann J. McAuley Etal
GRANTEE: Tim Jones Development Inc.
DEED BOOK/PAGE: Not Available
ZONING: R-2/RM
UTILITIES: Water, sewer, gas, electricity and
telephone
YIELD: 138 Lots (2.50 Lots/Acre)
COMMENTS: This property is located at the'
southwest corner of Flippen Road and
Walt Stephens Road. The subdivision
is now actively being: developed with
total of 138 lots. Builders
include Tim Jones Development and
Herman Homes. Double frontage, well
wooded, with two distinct market
products with separated entrances.
Arbor Cove Subdivision has had a
very high acceptance rate and is now
found near build-out.
ACREAGE 9ALE NO. 4
LOCATION: Highway 81/20
District 7, Land Lot 163
Henry County, Georgia
SIZE: 79.640 Acres
SALES PRICE: $1,123,700
SALES PBIICE/UNIT: $14,110/Acre ($6242/Lot)
DATE OF SALE: September 14, 1994
GRANTOR: Hampton East Company
GRANTEE: Crown Properties Ltd. Etal
DEED BOOK/PAGE: 1961-288
ZONING: PUD
YIELD: 180 Lots (3.01 Lots/Acre)
UTILITIES; Water, Sewer, Natural Gas,
Electricity, and Telephone
COMMENTS: This is a relatively large tract
located along the south side of Hwy
20/81 about one mile east of I-75.
The development joins the west side
of closed land fill and east side of
Camp Creek with minor amount Of
flood plain. Frontage is being
developed with about 20 acres of
commercial. Medical office now
under construction. Homes being
constructed by G T Architecture and
Crown Properties. 1065 feet highway
frontage, with majority of land in
open pasture with some tree line
along creek. 64 lots being
developed in Phase I. Approved for
180 lots.
ACREAGE SALE No. 5
LOCATION: Jodeco Road
District 6, Land Lot 43
Henry County, Georgia
SIZE: 96.642 Acres
SALES PRICE: $1,500,000
SALES P@RICE/UNIT: $15,521/Acre ($7500/Lot)
DATE OF SALE: March 17, 1995
GRANTOR: Hazel J. Jackson
GRANTEE: Hudgins Communities II Inc.
DEED BOOI</PAGE: 2053-147
ZONING: R-3 Single Family Residential.
UTILITIES: Water, Sewer Natural Gas,
Electricity, and Telephone.
YIELD: 200 Lots (2-07 Lots/Acre)-
COMMENTS: This property was Purchased for the
development of Summer Leigh
Subdivision. Located on the south side
Of Jodeco Road, near it's
intersection with the termination-of
Hudson Bridge Road. The developer,
Gerald Hudgins developed the
adjoining tracts with Jodeco
Station, and is preparing The
Meridian to the west. Minor amount
of flood Plain is indicated toward
southern Most end of tract along
Pates Creek. Preliminary plans with
total number of 200 lots indicated
by Sonny Sprayberry, Apple Realty.
Map Ref: 33-2-031
ACREAGE SALE NO. 6
LOCATION: Tunis Road
District 6, Land Lot 48,
Henry County, Georgia
SIZE: 39.50 Acres
SALES PRICE: $656,000
SALES PRICE/UNIT: $16,607/Acre ($NA/Lot)
DATE OF SALE: September 20, 1995
GRANTOR: Daniel B. Hardin Estate
GRANTEE. Killearn Properties of Ga. Inc.
DEED BOOK/PAGE: 2-162-137
ZONING: Single Family Residential
UTILITIES: Water, sewer, Natural Gas
Electricity, and Telephone.
YIELD: Not Available
COMMENTS: This property was purchased for the
assemblage and development of
extension of Eagles Landing with
other buyer held land. Acreage
value is comparable with other high
density acreage sales in the area.
Preliminary plans with total number
of lots not available. Development
plan has not been engineered to date
according to Bert Williams at
Eagles Landing sales center.
ACREAGE SALE NO. 7
LOCATION: Rock Quarry Road
District 12, Land Lot 004
Henry County, Georgia
SIZE: 16.85 Acres
SALES PRICE: $302,500
SALES PRICE/UNIT: $17,952/Acre ($4879/Lot)
DATE OF SALE: December 28, 1995
GRANTOR: Killearn Properties, Inc.
GRANTEE: Archway Homes, Inc.
DEED BOOK/PAGE: 2222-213
ZONING: R-3
UTILITIES: Water, Sewer, Natural Gas,
Electricity, and Telephone.
YIELD: 62 Lots (3.67 Lots/Acre)
COMMENTS: This property was purchased for the
development of the Gardens at Eagles
Landing Subdivision. Located on the
East side of Rock Quarry Road, the
Land is currently under development
With clearing, grading in progress.
Development will include 62 cluster
Home lots of about 0.13 acres each.
Homes targeted in lower to mid-
100,000 range. Land is rolling,
lightly wooded, joins south side of
Rum Creek with high per centage
(35% - 5.99 acres) of flood plain and
subsurface rock. Some flood area is
incorporated into plan with recreation and open area.
ACREAGE SALE NO. 8
LOCATION: Off Highway 42
District 7, Land Lot 101
Henry County, Georgia
SIZE: 14.869 Acres
SALES PRICE: $236,700
SALES PRICE/UNIT: $15,919/Acre ($4931/Lot)
DATE OF SALE: April 14, 1996
GRANTOR: Kuang C. Sun
GRANTEE: Jerry Steele Development Inc.
DEED BOOK/PAGE: 2293-342
ZONING: R-75
UTILITIES: Water, Sewer, Natural Gas,
Electricity, and Telephone.
YIELD: 48 Lots (3.23 Lots/Acre)
COMMENTS: This property was purchased for the
development of the Huntington Ridge
Phase II totaling 48 lots. Located
off the east, side of Highway 42, in
northern city limits of McDonough.
Lots typically 0.23 acre in size.
Homes targeted in lower $80,000 to
low $100,000 range. Land is
rolling, lightly wooded.
ACREAGE SALE NO. 9
LOCATION: North Bridge Road
District 5, Land Lot 76
Clayton County, Georgia
SIZE: 12.248 Acres
SALES PRICE: $237,000
SALES PRICE/UNIT: $19,350/Acre ($7406/Lot)
DATE OF SALE: April 21, 1995
GRANTOR: Venterra Ga.Inc./Shannon Holdings Inc.
GRANTEE: Compact Credit Corporation
DEED BOOK/PAGE: 2325-060
ZONING: CPUD
UTILITIES: All available
YIELD: 32 Lots (2.61 Lots/Acre)
COMMENTS: This is the most recent land sale
Within Rivers Edge Plantation to
Date. The site is located 275 feet
East of County Line Road on the
north side of North Bridge Road.
Access by extension of Olmstead
Drive. This tract does not include
Any golf course frontage.
Development plans indicate a total
Of 32 lots. Map Ref: 5-76A-C-001
42
BOB SORRELLS & ASSOCIATES
REAL ESTATE APPRAISERS & CONSULTING
ACREAGE SALE No. 10
LOCATION: Off Holloway Road
District 6, Land Lot 50
Henry County, Georgia
SIZE: 14.176 Acres
SALES PRICE: $239,250
SALES PRICE/UNIT: $16,877/Acre ($4984/Lot)
DATE OF SALE: October 1996
GRANTOR: Killearn Properties Inc.
GRANTEE: Jerry Steele Development Inc.
DEED BOOK/PAGE: Not Available
ZONING: PD Planned Development
UTILITIES: Water, Sewer, gas,
Electricity, and Telephone.
YIELD: 48 Lots (3.38 Lots/Acre)
COMMENTS: This property is located off the
northern side of Holloway Road
toward the southern end of the
Eagles Landing development. Access
is provided from extension streets
of Eagle Crest subdivision, Phase
III developed by Jerry Steele.
Homes priced in the upper $90's and
higher. Total of 48 lots in this final
phase. Split from parcel 51-01-25.1 part
of Killearn Properties.
43
BOB SORRELLS & ASSOCIATES
REAL ESTATE APPRAISERS & CONSULTING
RECONCILIATION OF MARKET DATA
(Acreage)
YIELD
SALE NO. DIST/LL ACRES S/ACRE S/LOT RATIO
Subject 12-002 67.70 N/A N/A 1.98
1 06-042 15.48 $16000 $ 6153 2.60
2 06-052 24.80 $18239 $ 6113 2.98
3 12-006 55.16 $13600 $ 6785 2.50
4 07-163 79.64 $14110 $ 6242 3.01
5 06-438 96.64 $15521 $ 7500 2.07
6 06-048 39.50 $16607 $ NA NA
7 12-004 16.85 $17952 $ 4879 3.67
8 07-101 14.87 $15919 $ 4931 3 23
9 05-076 12.24 $19350 $ 7406 2.61
10 06-050 14.17 $16877 $ 4984 3.38
The referenced land sales are all located in relatively close
proximity to the subject and share the characteristic of
medium to high density zoning. The sales ranged in size
between 12.24 acres to 96.64 acres. The average size of
tract sold for development was 35.14 acres, with the median
found at 20.14 acres. The subject is found toward the upper
end of the size range with 67.70 acres, within the parameters
of the referenced market. The smallest tract sold at
$19,350/acre and the largest tract sold at $15,521/acre, a
difference. of $3,829/acre. With all characteristics being
equal, the subject should fall well within this range.
Considering the adjoining earlier phase development of
Windsong Plantation, and the general overall desirability of
the surrounding neighborhood, a per acre value in the middle
to upper end of the market range is considered very
reasonable. Thus, on a per acre basis, a unit value of
$17,000 is estimated for the subject.
A second method of estimating the subject land value is considered using the UD
lot method. The subject has been planned and approved for a total of 134 lots.
The yield of the subject is 1.98 lots per acre. The subject comparable land
sales each had various yields ranging between 2.07 lots per acre to 3.67 lots
per acre. The smaller yield is typical of larger lot sizing, and conversely, a
higher yield is indicative of small or cluster type development. The price or
land sales using the UD lot as a measure of value ranged between $4879/UD Lot
to $7500/UD Lot. From the previous chart, it is apparent that the higher
density land sales typically have the smaller or lower end unit value per lot
(ie Sales No. 7, 8, 10); while the lower density land sales have the higher end
unit value per lot (ie Sales No. 3, 5). Considering the subject is relatively
low density in comparison with the comparables (1.98 lot yield vs. 2.07 to
3.67 lot yield), a unit value toward the upper end of the range is justified
and appropriate. Further adjustment is warranted for the equal or superior
location and value added by previous in-place subdivision development
(ie amenity package, entry boulevard/entrance gates, etc.). Thus, from our
analysis, a unit or per UD Lot value of $8,500 is considered reasonable.
From our analysis, two unit values have been reconciled for estimating the
value of the subject land as undeveloped. On a per acre basis, $17, OOO/Acre
is estimated. On a UD lot basis, $8,500/UD Lot is estimated. Each is used to
calculate the value of the subject land as follows:
67.70 Acres x $17,000/Acre = $1,150,900
134 Lots x $8,500/Lot = $1,139,000
Called $1,140,000
In our final analysis, equal weight was given to each method.
Each of the market extracted values is found well supported.
INDICATED VALUE OF UNDEVELOPED ACREAGE
BY THE SALES COMPARISON APPROACH
$1,140,000
COST APPROACH
Rationale of the Cost Approach:
The rationale of the Cost Approach lies in the first alternative option open to
a prospective purchaser in which he may acquire an economically feasible and
desirable site and construct thereon site building improvements adequate to
his needs.
It is to this alternative option that the Cost Approach is directed. It
assumes that no one is justified in paying more for a property than that amount
by which a property of equal desirability and utility can be obtained by
purchase of an economically feasible and desirable site, and the construction
of building and site improvements, thereon, without delay. This is the very
premise and foundation of the Cost Approach.
Implicit in the Cost Approach are these basic Economic Principles:
1. Substitution affirms that the informed, knowledgeable purchaser will pay no
more to acquire a property than the cost of producing a substitute property
with the same utility as the subject property, without undue time delay.
2. Contribution (marginal utility) affirms that the measure of the present
worth of the building and site improvements is the amount that they add or
contribute to the site value, in the development of the value of the whole
property.
3. Balance (increasing and decreasing diminishing returns) affirms that
Improvements on and to the site can be improper, either through the under
improvement or the over improvement of the site. They may be of a type or
character that causes a diminution of the value of the entire property because
the improvements do not represent the Highest and Best Use of the site.
4. Highest and Best Use affirms that the site (underlying land) is valued as
though vacant and available to be put to its Highest and Best Use.
It is well to note, at this time, that excess or reserve lands for future
expansion are either valued on a unit value as part of the total site or are
laid off separately, valued at their Highest and Best Use and added to the
value of the underlying lands.
5. Anticipation affirms that value is a function of the anticipation benefits
to be derived from ownership in the real property.
6. Change affirms that due to the dynamics of the marketplace, dependent on
the forces of supply and demand, continuous change is the very basic
characteristic of the real estate market. Value itself, therefore, is subject
to change as market conditions change.
Steps in the Cost Approach:
1. The estimation of the value of the site (underlying land)
as if vacant and available to be put to its Highest and
Best Use.
2. An estimate of the reproduction or replacement cost new
of the building and site improvements.
3. An estimate of total accrued depreciation to building and
site improvements.
4. An estimate of the depreciated value of building and site
improvements.
5 . An estimate of the property value found by subtracting total accrued
depreciation (Item #3 above) from the reproduction or replacement cost
new of the building and site improvements (Item #2 above) to which is
added the value of the site, underlying land (Item #1 above).
*In this analysis, the development costs are substituted for building
improvements. Specific unit costs are from the Marshall and Swift Cost
Valuation Service and local contractors. Quantity measures are from actual
field measurements or scaled from site plans where applicable. Completed
engineering drawings were not made available in this assignment and plans were
limited to a preliminary layout only. Certain data was relied on by the
developers estimate. The undeveloped land value has been previously estimated
by the Sales Comparison Approach.
SUMMARY: COST APPROACH
67.70 Acres (134 UD Lots) Market Section $1,140,000
Engineering/Survey (134 lots @ $500'ea.) $67,000
STREET IMPROVEMENTS:
8200 LF Base Rock x $9.12/LF .$ 74,784
8200 LF Asphalt x $26.40/LF $216,480
16400 LF Concrete Curbing @ $6.50/LF $106,600
9246 LF Storm Sewer x $23.10/LF* $213,600
UTILITIES:
Sanitary Seweer* $316,500
Water Main* ... $167,000
Hydrants - 500'0.C.* Inc.
Electricity - 134 Lots @ $160/Lot $ 21,440
Natural Gas - N/C N/C
Telephone - N/C N/C
Street Lights - 500' O.C. - 16 @ $750 $ 12,000
Landscaping/Signs/Monuments: $ 26,800
Subdivision Entrance (Allowance) Inc.
Contingency Fund (Rock,Other) @ 10% $115,520
Subtotal: $2,477,724
Soft Costs.(Int. Fees, Other) @ l0%: $247,772
Developers Overhead/.Profit @ 20%: $495,544
Indicated Value/Cost Approach: . $3,220,992
Called: $3,220,000
*Developers cost estimates.
INDICATED VALUE BY COST APPROACH
$3,220,000
SALES COMPARISON APPROACH
(Improved Lot Sales)
The Sales Comparison Approach, also called the Market Approach, is the most
widely used of all valuation methods. The approach is based on the assumption
that property is worth what it will sell for in the absence of undue stress
if a reasonable time is given to find a buyer. In estimating the market value
of the subject lots, a comparison is made with recent lot sales in-the market
area of the subject. The sales analyzed are documented in this section and
summarized for convenience of reading. All sales represent transfers of the
fee simple at cash or cash equivalent prices; therefore, no adjustments are
required for rights conveyed or financing terms. Market conditions in the
immediate vicinity are indicating stability over short term and moderate
increases over long term (yearly). Each of the sales are considered recent
enough to not necessitate any adjustments for time.
Lot Valuation
The value of the subject lots have been estimated by an analysis of the
comparable lot sale s with similar residential zoning and a market range of
product projected above and below the subject. In several cases lots with
lower and higher market ranges of final product were referenced to establish
the limit of range of value for the subject. Many subdivision lots do not have
characteristic feature differences such as topography, utilities, lot size and
shape variances which can be effectively measured. The lot is considered a
component of the overall cost to construct a complete home within a given price
range and typically falls within a certain ratio of the cost to complete the
home as a unit. The subject subdivision is projected and targeting the mid
level home buyer in the Eagles Landing area market. On the following pages
eight subdivision residential lot sales from the immediate market area sales
were identified, researched, and analyzed. The methodology is to make
adjustments to the comparable sales for any difference they might have as
compared to the subject property. The comparable lot sales range from
$32,000/Lot to $70,000/Lot. The price range of homes in these subdivisions
ranged between $158,000 to $750,000. The subject subdivision is targeted
toward the lower to mid-point of the range in the $180,000 to lower $200,000
for the future Units VI and VII. Therefore the estimated retail value of the
subject lots should fall within this range, with all other factors and
characteristics being equal. We have researched the subject subdivision and
four other subdivisions to insure an adequate sampling. The comparable lot
sales, and a location map are found in this section. Each of the subdivision
lot sales are found in a summary chart below.
Summary of Lot Sales
DIST PRICE/ RANGE IN LOT
SALE SUBDIVISION L/L LOT HOME COSTS SIZE
1 Windsong Plan 6/014 $34000 $158 > $200+ 0.43
2 Windsong Plan 6/014 $34000 $158 > $200+ 0.45
3 Village Estate 6/015 $55000 $160 > $250+ 0.24
4 Village Estate 6/015 $57000 $160 > $250+ 0.24
5 Eagles Landing 6/018 $70000 $175 > $750+ 0.50
6 Eagles.Landing 6/047 $45000 $175 > $750+ 0.58
7 Villages @ EL 6/015 $34500 $160 > $250+ 0.10
8 Heritage Ridge 6/040 $32000 $175 > $225+ 0.86
SUBDIVISIONS REVIEWED: Five
LOCATION: Eagles Landing/Henry County
VALUE RANGE OF LOTS: $32,000 to $70,000
PRICE RANGE OF HOMES: $158,000 to $750,000+
RANGE IN LOT SIZES: 0.10 Acre to 0.86 Acre
INSERT - MAP OF STOCKBRIDGE
LOT SALE NO. 1
LOCATION: 119 Sycamore Walk
District 6 Land Lot 14
Henry County, Georgia
SIZE: 0.43 Acre
SALES PRICE: $34,000
SALES PRICE/UNIT: $34,000/Lot ($1.81/SF)
DATE OF SALE: April 26, 1996
GRANTOR: Killearn Properties Inc. of Ga.
GRANTEE: McMillan-McDonald BuildersInc.
DEED BOOK/PAGE: 2301-167
ZONING: R-2 Residential
UTILITIES: All available
MAP REF: 426-M-12
COMMENTS:
The referenced sale is Lot 38, Block L, Unit 5 in Windsong Plantation
situated in southern city limits of Stockbridge. Located off the north side of
Eagles Landing Parkway, and east side Rock Quarry Road. This lot is typical of
The development, though somewhat larger in size. Other lots range in size from
0.36 to 0.45 acre. This lot is located at 119 Sycamore Walk, a cul de sac site
with typical 110' frontage and 170' depth. Home sales to date range widely
from $158,000 to $200,000+. Attractive pool and tennis amenity in subdivision
for homeowners. McMillan-McDonald are one of two primary builders in subject
subdivision.
LOT SALE NO. 2
LOCATION: 117 Sycamore Walk
District 6 Land Lot 14
Henry County, Georgia
SIZE: 0.45 Acre
SALES PRICE: $34,000
SALES PRICE/UNIT: $34,000/Lot ($1.73/SF)
DATE OF SALE: April 3, 1996
GRANTOR: Killearn Properties Inc. of Ga.
GRANTEE: J.P. Evans Construction Co. Inc.
DEED BOOK/PAGE: 2288-277
ZONING: R-2 Residential
UTILITIES: All available
MAP REF: 426-M-12
COMMENTS:
The referenced sale is Lot 39, Block L, Unit 5 in Windsong Plantation situated
in southern city limits of Stockbridge. Located off the north side of Eagles
Landing Parkway, and east side Rock Quarry Road. This lot is typical of the
development, though somewhat larger in size. Other lots range in size from
0.36 to 0.45.acre. This lot is located at 117 Sycamore Walk, a cul de sac site
with large 176' frontage and tapering to rear in wedge shape. Home sales to
date range widely from $158,000 to $200,000+. Attractive pool and tennis
amenity in subdivision for homeowners. J. P. Evans Construction is one of two
primary builders in subject subdivision.
LOT SALE NO. 3
LOCATION: 200 Golf Terrace Lane
District 6 Land Lot 15
Henry County, Georgia
SIZE: 0.24 Acre +or-
SALES PRICE: $55,000
SALES PRICE/UNIT: $55,000/Lot ($5.21/SF)
DATE OF SALE: January 5, 1996
GRANTOR: RJR Homes & Properties, Inc.
GRANTEE: Roger Harvey Homes, Inc.
DEED BOOK/PAGE: 2221-235
ZONING: Residential (PUD)
UTILITIES: All available
MAP REF: 441-M-1
COMMENTS:
The referenced sale is Lot 17,Unit II in The Village Estates
at Eaglets Landing. Corner open lot rising from street
grade, presently improved. Trapezoid shape, typical of
interior standard type lots in this development.
Construction loan to Bank of Spalding for $168,375 December
1995. This development is located across Eagles Landing
Parkway from subject development. Lots are relatively small,
cluster type lots, with comparable type homes. Some lots
front golf course and exceed $100,000 in value. Entry
is by security gate to this development.
LOT SALE NO. 4
LOCATION: Eagle's Club Drive
District 6 Land Lot 15
Henry County, Georgia
SIZE: 0.24 Acre +or-
SALES PRICE: $57,000
SALES PRICE/UNIT: $57,000/Lot ($5.42/SF)
DATE OF SALE: January 5, 1996
GRANTOR: RJR Homes & Properties, Inc.
GRANTEE: Roger Harvey Homes, Inc.
DEED BOOK/PAGE: 2221-245
ZONING: Residential (PUD)
UTILITIES: All available
MAP REF: 441-M-1
COMMENTS:
The referenced sale is Lot 18,Unit I in The Village Estates at Eaglets Landing.
Interior lot, rising from street grade, presently improved. Rectangular shape,
70' frontage x 150' depth, typical of interior standard type lots in this
development. Construction loan to Bank of Spalding for $205,400 December 1995.
Lots are relatively small cluster type lots, with comparable type homes. Some
lots front golf course and exceed $100,000 in value. Entry is by security gate
to this development.
LOT SALE No. 5
LOCATION: 609 Champions Drive
District 6 Land Lot 18
Henry County, Georgia
SIZE: 0.50 Acre +or-
SALES PRICE: $70,000
SALES PRICE/UNIT: $70,000/Lot ($3.16/SF)
DATE OF SALE: February 21, 1996
GRANTOR: Killearn Properties, Inc. of GA.
GRANTEE: Burges K. Jokhi, etal
DEED BOOK/PAGE: 2251-067
ZONING: Residential (PUD)
UTILITIES: All available
MAP REF: 441-L-2
COMMENTS:
The referenced sale is Lot 10, Block P Unit IV in Eagles Landing. This
subdivision is located immediately south of the subject with the main entry
gate also located off Country Club Drive. Lots and homes in this section are
the most desirable due to golf course frontage and view. Homes are typically
more expensive, and have benefit of security gated access only. This is a
standard or interior type lot with relatively long frontage of 130' x 170'
depth. Mostly level to slight slope, lightly, wooded. Sale found at generally
upper end of range for off-course type lot.
LOT SALE NO. 6
LOCATION: 429 Winged Foot Drive
District 6 Land Lot 47
Henry County, Georgia
SIZE: 0.58 Acre +or-
SALES PRICE: $45,000
SALES PRICE/UNIT: $45,000/Lot ($1.78/SF)
DATE OF SALE: July 25, 1996
GRANTOR: Killearn Properties, Inc. of GA.
GRANTEE: Juan A. Lama
DEED BOOK/PAGE: 2364-173
ZONING: Residential (PUD)
UTILITIES: All available
MAP REF: 441-L-2
COMMENTS:
The referenced sale is Lot 6, Block P Unit IV in Eagles Landing. Second
similar off course lot, typical of majority in subdivision, priced toward the
lowest end of lot sales. This lot is a corner lot, with 127 feet frontage and
average depth of 200 feet. Financing by First Union for $33,006 for five years.
LOT SALE NO. 7
LOCATION: Preswick Way North
District 6 Land Lot 15
Henry County, Georgia
SIZE: 0.10 Acre
SALES PRICE: $34,500
SALES PRICE/UNIT: $34,500/Lot ($7.84/SF)
DATE OF SALE: July 8, 1996
GRANTOR: Killearn Properties, Inc. of GA.
GRANTEE: Village Builders, Inc.
DEED BOOK/PAGE: 2367-227
ZONING: Residential (PUD)
UTILITIES: All available
MAP REF: 441-M-1
COMMENTS:
The referenced sale is Lot 2, Block E Unit II in The Villages at Eagles
Landing. Interior lot with rectangular shape, this is a cluster home type
development that joins the Village Estates by another developer. Construction
loan to Wachovia Mortgage for $178,400. This development is located across
Eagles Landing Parkway from subject development. Lots are relatively small,
cluster type lots, with comparable type homes. Some lots front golf course,
entry is by security gate to this development.
LOT SALE NO. 8
LOCATION: 728 Lexington Drive
District 6 Land Lot 40
Henry County, Georgia
SIZE: 0.86 Acre
SALES PRICE: $32,000
SALES PRICE/UNIT: $32,000/Lot ($0.85/SF)
DATE OF SALE: June 17, 1996
GRANTOR: C & H Development Co. Inc.
GRANTEE: Kenneth R. Batson
DEED BOOK/PAGE: 2336-247
ZONING: R-125
UTILITIES: All less sewer
MAP REF: 440-B-03
COMMENTS:
Heritage. Ridge developed by Homer Vincent, now deceased and remaining
development by sons and family. This subdivision is located near the
intersection of Jodeco Road and Blackhall. Road near the Clayton-Henry County
boundary at Lake Spivey. Recent transaction to Kenneth Batson and wife.
Corner lot at Columbus Drive, measures 170 feet by 222 feet. Most homes
are custom built with normal resales that vary significantly, typically in high
$100's to wide range of $200,000. This subdivision is located about three
miles west of the subject With comparable quality homes outside the immediate
Eagles Landing area market.
Reconciliation
A total of eight subdivision lot sales from the immediate market area were
identified, researched and analyzed in comparison with the subject proposed
planned lots within Windsong Plantation. Two were found with the adjoining
previous units of Windsong, and five others were located just south in the
Eagles Landing complex. The last sale was selected from a similar priced
subdivision development located further to the west near the Lake Spivey area
market,a competing area of comparable priced homes. The subject is located
within a more defined middle to upper income area, with few competing
subdivisions in the Henry County market. The price range of homes found within
these comparables ranged between $158,000 to as high as $750,000. More
valuable homes exist but have not sold recently. The ratio of lot value to
overall home value has been analyzed with the comparable, lot sales.
Summary of Lot Sales
DIST PRICE/ LOT VALUE LOT
SALE SUBDIVISION L/L LOT HOME RATIO SIZE
1 Windsong Plan 6/014 $34000 17% - 20% 0.43
2 Windsong Plan 6/014 $34000 17% - 20% 0.45
3 Village Estate 6/015 $55000 18% - 22% 0.24
4 Village Estate 6/015 $57000 18% - 22% 0.24
5 Eagles Landing 6/018 $70000 15% - 21% 0.50
6 Eagles.Landing 6/047 $45000 15% - 21% 0.58
7 Villages @ EL 6/015 $34500 17% - 22% 0.10
8 Heritage Ridge 6/040 $32000 15% - 20% 0.86
A ratio has been established in our analysis that correlates the relationship
of lot value to completed home value (lot/home value ratio). The range is
relatively close between 15% to 22% in the selected nearby subdivisions. The
ratio is based on the lower or beginning home cost within the subdivision.
From our experience, most lot to home value ratio's fall near the 18% to 22%
Range. Typically, as the price range rises for homes in the development, so
does the cost of the lot. Assuming a $180,000 base cost home in Windsong
Plantation, generally the low end targeted for Units VI and VII, and a 19% lot
ratio is found well within the overall range of pro rata home cost, and the
$180,000 base price is well supported by existing home values and previous
sales. Two recent sales to J.P. evans and McMillan-McDonald Builders are
presented, indicating recent 1996 near this range. These are the best
indicators of the subject retail lot values in our opinion. Although not
closed due to development in progress, eleven lots have been pre-sold to
several indivisuals and builders. Some of these have been identified as Unit
VI, Lot E-13 at $32,150; Unit VII, Lots 34-G, 29 at $32,900 to McMillan; Lot
6-N to Oxford at $32,900; and two lots to an individual buyer O-8 and G-39 at
$64,000 for the pair. Considering the characteristics of the subject lots,
location, and price range of subdivision homes, the most reasonable estimate
of retail value appears to be $33,000 as an average for the 134 lots in Units VI
and VII. A Gross Aggregate Retail Market Value of the entire subdivision is
calculated as following. This should not be construed as the bulk sale value
to a single purchaser of the entire two unit development, but rather an
aggregate total of sale volume based on present individual lot values.
134 Developed Lots x $33,000 Per Lot = $4,422,000
INDICATED VALUE BY SALES COMPARISON APPROACH
(Gross Aggregate Retail Market Value)
$4,422,000
INCOXE APPROACH: 6EVELOPERS ANALYSIS
The Developers Analysis involves projecting tk4 potential
gross income from the sale of the subject lots (previous
section) over a projected absorption period, then making
deductions f or any holding costs, costs of sale's and profit
and overhead to the developer or purchaser of the property.
This first step yields a net revenue or sale proceeds from
the timely sale of the lots,, projected during the absorption
period. The interval net proceeds are discounted using an
appropriate rate that considers risk and the time value of money
over the period of the sales.
The discounting methodology reflects the price that a prudent
purchaser would be willing to pay for all of the lots within
each unit in order to make a reasonable profit from the
resale of individual lots (to builders or individuals) over a
projected sell-out or absorption period. A discounted cash
flow analysis of the sale of the residential lots is made on
the following pages. The result is a discounted present
value of:
WINDSONG PLANTATION-UNITS VI & VII
$3,277,000
The final value estimate is based on the following criteria:
(A) Gross retail sellout is from the Market Approach.
(See section of this report). Appreciation over
selling period - 4% annual.
(B) Absorption rate of 20.00 Lots Per Quarter Period.
Windsong Plantation has performed with 60 closed
home sales between 10/95 > 8/96 or 6.00 homes per
month (18/Qtr.) based on TRW-Redi Data sources.
Killearn has indicated that the two primary
builders, Oxford Homes (JP Evans) and McMillan-
McDonald have contracted to a takedown of 10
lots each per quarter period. Further analysis of
competing Henry-Clayton area subdivisions from the
surrounding market with aggressive marketing and
builder programs was made. Resource information
provided by Subdivision Profile by-Data Book.--Inc-.
(See pages following).
(C) Expenses are estimated as:
(1) Marketing/Closing Costs 4%
(2) Contingency Costs - 1%
(3) Profit and Overhead - 15%
(D) 11.0% Discount Rate (See Attached Methodology)
Absorption Rate Analysis
The following data on construction starts to date was taken
from Subdivisi_on Profile by Data Book Inc. for year end 1995
(A) and 1st Quarter 1996 (B). Each is found in relatively
close proximity of both Henry and Clayton counties and
typically identified with aggressive marketing and builder
Programs.
Dist LL (000) (A) (B) Adjusted
Subdivision Location Price Range Lot Sales Absorption
Andover--Hawt. $ 80 $ 89 28 13 13.50/Qtr
Villages Arb. $ 81 $ 83 na 18 ...22.50/Qtr
Oakwood Trl. $ 85 $120 na 16 16.00/Qtr
Huntington $ 80 $ 95 48 na 12.00/Qtr
Hawthorne Gr. $ 90 $110 45 12 12.00/Qtr
Arbor Cove $115 $169 45 12 12.00/Qtr
St. Andriews $ 92 $108 42 12 12.00/Qtr
Vineyard at EL $100 $125 na i22 22.00/Qtr
The previous charted subdivisions have an indicated
absorption rate of between 3.16 lots to 7.50 lots per month
or 9.50 lots to 22.50 lots per quarter period for the sale
year of 1995 thru the first quarter of 1996. The first
quarter 1996 is a winter sale period and is adjusted
seasonally due to typical slower starts The figures
indicated. are actual construction starts in each of the
developments through physical research effort of data
provider. Our experience finds that higher valued
subdivision developments trend toward lower absorption rates
due to market share and affordability to general public. The
this area of Henry County, and typically closely held by
parent development company for the construction arm of
company.
Using each of these developments, and data retained from our experience with
over 175 other subdivision appraisals in the last several years in the south
metropolitan Atlanta area, we estimate an rate of 20.00 lots per quarter
period allowing for an estimated sellout or buildout period of seven quarters
or approximately 20 months. Quarter Period 5 calculated with remaining 14
lots.
Discount: Rate
The Discount Rate represents the investor's opinion of time value of his
investment given the risks associated with the investment. This rate also
reflects the appraiser's judgement about all risks which are associated with
the periodic cash flows over the absorption or sales period. These risk
include " Real" interest rate; estimate of the impact of inflation; estimate
of the stability of the periodic cash flow; and an estimate of the liquidity
risks associated with market conditions at the date of resale. In arriving at
an appropriate discount rate for the proposed subject subdivision, the
appraisers have considered the following:
"Real" Interest Rate: 3% to 3.5%
Estimate for Inflation: 4% to 5%
Estimate for Security: 2% to 5%
Illiquidity: 1% to 2%
Range: 10% to 15.5%
An overall built-up rate implies a yield rate of between 1-% and 15.5 %.
Considering the risks associated with selling these lots in Henry Counties
most popular middle to upper income level residential market, and the
relatively short term nature of the cash flows, a rate near the lower end
of this range is considered reasonable. Therefore, we have employed a 11.0%
discount rate in our analysis. Net sales proceeds are converted to present
value based on beginning of period discount factors.
Discounted Sellout Analysis
WINGSONG PFANTATION-UNITS VI & VII : 134 LOTS
GROSS AGGREGATE RETAIL VALUE: $4,422,000
AVERAGE LOT PRICE: (at completion) $ 33,000
QUARTER PERIOD 1 2 3 4
Average@
Lot Price ($), 33,000 33,330 33,660 34,000
Gross Income:
(20.0/QTR) 660,000 666,600 673,200 680,000
Less:
Cost of
Sales (4%) 26,400 26,664 26,928 27,200
Contlngencies 6,660 6,666 6,732 6,800
Profit & Over-
head-15%: 99,000 99,990 100,980 102,000
Total Expenses: 132,060 133,320 134,640 136,000
Total
Net Proceeds
of Sales: ($) 527,940 533,280 538,560 544,000
Discount: Factor
at 11.00%: .972997 .946722 .921158 .896283
P.W. of Sales
Proceeds: 513,684 504,867 496,098 487,578
Summary at End of Period Four
TOTAL LOT SALES: 80
TOTAL SALESS VOLUME: $2,679,800
DISCOUNTED VALUE: $2,002,227
TOTAL DISCOUNT: $ 677,573 (25.28%)
DISCOUNTED LOT VALUE: $ 25,027
-Continued-
Discounted Sellout Analysis
WINDSONG PLANTATION-UNITS VI & VII 134 LOTS
GROSS AGGREGATE RETAIL VALUE:, $4,422,000
@.KVERAGE LOT PRICE: (at completion) $ 33,000
QUARTER PIRIOD 5 6 7
Average
Lot Price ($) 34,340 34,680 35,OOO
Gross Income:
(20.0/QTR) 686,800 693,600 490,000
Less:
Cost of
Sales (4%) 27,472 27,744 19,600
Contingencies
6,868 6,936 4,900
Profit & Over-
head-15%: 103,020 104,040 73,500
Total Expenses: 137,360 138,720 98,000
Net Proceeds
of Sales: 549,440 544,880 392,000
Discount Factor
At 11.00%: .872081 .848531 .825618
P.W. of Sales
Proceeds: ($) 479,156 470,832 323,642
Summary at End of Period Seven
TOTAL LOT SALES: 134
TOTAL SALES VOLUME: $4,550,200
DISCOUNTED VALUE: $3,276,851
TOTAL DISCOUNT: $1,273,343 (27.98%)
DISCOUNTED LOT VALUE: $ 24,454
INCOME APPROACH: DEVELOPERS ANALYSIS
$3,277,000
CONCLUSION OF VALUE
The subject property has been personally inspected and the
market researched for arriving at the pertinent conclusions
of this narrative report. The Highest and Best Use is
considered it's proposed development as residential single
family subdivision. November 1, 1996 is considered the
effective date value for the property appraisal. This
estimate will carry forward for a reasonable period of time
to complete development as sp4cified.
The property appraised "As Is" assuming a totally
undeveloped tract of land, comprising 67.70 acres, engineered
and approved for 134 single family residential lots is valued
at $1,140,000.
The 134 proposed lots that will be completed in a single
development process comprised of Units VI and VII. The three
traditional approaches indicate A range in value between
$3,277,000 (Income Approach-Developers Analysis) to
$3,220,000 (Cost Approach) to $4,422,000 (Market Approach
Gross Aggregate Retail Lot Value) by the three approaches to
value. Toward the lower end range of $3,277,000 is the
present worth of the income stream from the sale of these
lots. Traditionally, the most weight is given to this
approach in the valuation of proposed lots, and it, is
commonly used by lenders for acquisition and development
purposes. This estimate approximates the single bulk sale
value of-' all 134 lots to a purchaser, that would in turn
resale the lots for a profit over time. This value is
probably understated considering current market demand for
lots in general, and the limited supply of this particular
Eagles Landing type lot that cannot be readily replaced due
to the more or less unique locational and ancillary
development characteristics associated with it.
It has been a pleasure to serve you in this matter. Please call
if we can be of service in this or your other real estate appraisal
matters.
Sincerely,
/s/ Robert Wilson, IFAS
ROBERT WILSON, IFAS
Ga. Cert. Gen. No. 1497
Associate Appraiser
/s/ Bob Sorrells, IFAS
BOB SORRELLS, IFAS
Ga. Cert. Gen. No. 1154
Chief Appraiser
ADDENDA SECTION
Henry County Demographic overview
Appraiser Qualifications
GEORGIA ECONOMIC PROFILE
MCDONOUGH HENRY COUNTY
POPULATION
GA U.S.
City County (millions)
1950 1,635 15,857 3.4 151.3
1960 2,234 17,619 3.9 179.3
1970 2,675 23,724 4.6 203.2
1980 2,778 36,309 5.5 226.5
1990 2,929 58,741 6.5 249.5
1995 3,800 77,395 7.2 262.8
PER CAPITA INCOME
City County U.S.
1970 $3,114 $3,373 $4,4047
1980 9,157 8,353 9,940
19-- 13,816 12,864 14,155
1990 16,300 17,123 18,666
1991 16,420 17,645 19,201
1992 16,973 18,495 20,137
1993 17,341 19,249 20,800
Health
(County)
1 hospital (122beds)
16 MD's
4 dentists
1 chiropractor
Henry County Day Care & Training Center
Stockbridge Auxiliary Health Center.
1 nursing home (180 beds)
1 psychiatric hospital
Mental Retardation Service Center
Education
Community Schools. 19 county public schools with 800 teachers, 14,353
students, and 605 high school graduates in 1995. 4 private schools
with 464 students in 1995.
Higher Education. Tech. Institute: Griffin at Griffin (19 miles ) has
2,015 students. There are 19 colleges and universities in the Atlanta
area with a total enrollment or more than 100,000 students.
Commercial Services
Communications: Local Newspapers: 1 weekly Dailies delivered:
Atlanta Journal, Atlanta Constitution. 6 TV channels received (22
Channel cable available). Local radio stations : 1 AM
Financial Facilities: 1 bank and 4 branch banks with $26.4 billion in
assets.
Industrial Support Services: Fabricating, forming, machining, tool &
die shop
Public Accommodations: 16 restaurants (largest seating capacity 100).
9 motels (758 rooms). 3 meeting facilities (largest seats 600).
Recreation
Facilities: 10 tennis courts. 2 public golf courses. 7 activity
centers. 8 parks. Atlanta Motor Speedway.
State Park. Panola Mountain State Park (local) with trails, picnic
areas, interpretive center.
Public Lake/River: Jackson Lake (15 miles) has swimming, fishing,
camping, water skiing, motor boating.
Yearly Events. Geranium Festival of City of McDonough (third Saturday
in May). Christmas Parade (first Saturday in December).
Municipal Services
Fire Protection. 5 full-time city personnel and 60 volunteers. Fire
insurance classification 5.
Police Protection. 10 full - time personnel.
Garbage. Service provided by city.
Professional Engineer. Consulting contractual engineer.
Zoning. City ordinance and subdivision design standards (Southern
Building Code). County zoning ordinance and subdivision design
standards.
Utilities
Electricity. A part of Georgia's modern integrated electrical
transmission system, McDonough has excellent ability to supply
industrial demands. Compared to 47% for the U.S., coal accounts for
84% of fuel used by the state's power generating plants. This assures
long term continuity.
Natural Gas. Supplied by Georgia Natural Gas Company and available in
Industrial quantities on an interruptible basis.
Water. Plant capacity: 1,200,000 gal/day. Consumption: 700,000
gal/day maximum. Storage capacity : 750,000 gal, elevated, 100,000
gal. Ground. Source: 2 deep wells resevoir on Walnut Creek. Daily
flow: 1.6 cu ft/sec average. .93 cu ft/see minimum. County system has
6,000.000 gal/day plant capacity with 4,400,000 gal/day consumption.
Sewage. Plant capacity: 1,200,000 gal/day. Plant load: 358,000
gal/day. Secondary treatment plant. Oxidation pond. County system
has 2,280,000 gal/day plant capacity with 1,300,000 gal/day plant load.
Transportation
Motor Freight Carriers. 4 interstate 20 inter/interstate.
Rail. Norfolk Southern rail service at McDonough (local). Norfolk
Southern piggyback service at Atlanta (28 miles). CSX piggyback service
at Atlanta (28 miles).
Water. Nearest navigable river; Chattahoochee (9 foot channel depth)
with a public barge dock at Columbus (99 miles). Nearest seaport:
Savannah (230 miles) with a maintained channel depth of 42 feet.
Air. Nearest commercial air service: Atlanta (28 miles) Airlines: Aero
Costa Rica, Aeromexico, ALM Antillean, Air Canada, Air South, Air
Jamaica, American West, American, American Eagle, Atlantic Southeast,
British Airways, Cayman Airways, Continental, Delta, Japan, KLM, Kiwi,
Korean Air, Lufthansa, Mark Air, Midwest Express, Northwest, National,
Swissair, TWA, United, USAir, ValuJet, Varig, Nearest public airport at
Hampton (local). 3,400 foot asphalt runway. Services and navigational
aids: aircraft tiedown, airfram & power plant repair, hangar, lighted
runway.
Taxes
Property. Property taxes are determined by tax rates and assessment
ratios which vary by location. The only realistic way to compare
property taxes for different locations is to use :effective tax rates"
(tax rate multiplied by assessment ratio). Effective tax rates combine
city, county, school, and state tax rates into one convenient figure-
the annual tax for each $1000 of property at its fair market value.
This rate applies to all property: land, buildings, machinery,
equipment, and inventory
Property Located 1995 Effective Rate
Within city $16.18
Outside city $14.43
Inventory. Local Freeport (not state version). Includes county and
any municipal corporation within the county and covers 100% of
inventory to be shipped out of Georgia,
Sales. City and county have 1 % local sales tax in addition to the 4%
state sales tax.
HENRY COUNTY - Combined Quarters 1-4,1994
AVERAGE AVERAGE AVERAGE
OF MONTHLY WEEKLY
INDUSTRY ESTAB. EMPLOYENT WAGES
Agriculture, forestry, and fishing 38 223 $383
Mining - - -
Construction 219 1,126 $446
Manufacturing 59 3,450 $460
Food, and kindred products - - -
Textiles - - -
Apparel 7 407 $326
Lumber and wood products 6 48 $248
Furniture and fixtures - - -
Paper and allied products 3 335 $459
Printing and publishing - - -
Chemicals and allied products - - -
Petroleum refining - - -
Rubber and misc plastic products - - -
Stone, clay, glass and concrete 6 200 $578
Fabricated metal products - - -
Industrial machinery, incl computer
Electronic, other electrical equip 4 645 $473
Instruments and related products - - -
Miscellaneous mfg industries 4 20 $176
Transportation and public utilities 60 814 $998
Wholesale trade 78 820 $581
Wholesale trade - durable goods 57 503 $569
Wholesale trade - nondurable goods 21 323 $599
Retail trade 259 3,706 $238
Finance, insurance, and real estate 101 616 $462
Services 348 2,807 $319
Hotels, other lodging places 16 187 $180
Personal services 30 182 $201
Business s services 52 562 $1,273
Auto repair, services, garages 31 157 $371
Miscellaneous repair services 14 62 $373
Motion pictures 9 41 $167
Amusement and recreation services 12 178 $299
Health services 61 643 $474
Legal services 19 84 $500
Educational services 3 108 347
Social services 23 359 $179
Membership organizations 7 49 $124
Engineering and management services 45 161 $437
Private households 29 36 $147
Federal Government 7 884 $1,225
Local Government 11 3,563 $411
State Government 7 131 $417
ALL INDUSTRIES 1,188 18,185 $449
Property Description
Eagles Landing
Windsong Plantation
Unit 6
All that tract or parcel of land lying and being in Land Lot 4,12th
District, Henry County, Georgia and being that property more particularly
described as follows:
To find the true point of beginning, begin at the point of intersection of
the Northern right-of-way line of Redbud Lane (50 foot right-of-way) and the
Eastern right-of-way line of Mulberry Street (50 foot right-of-way), thence
1. N 12-35'43" W 53.02 feet, thence along the arc of a curve
2. 116.73 feet, said arc subtended by a chord bearing N 32-51'44" W, a
distance of 114.31 feet, to a point no the curve, having a radius of -165.00
feet and a central angle of 40-32'02", thence
3. S 36-52'15" W 50.00 feet, thence
4. N 53-07'45" W 24.58 feet, thence
5. S 58-44'24" W 160.00 feet, thence
6. N 41-10'01" W 31.00 feet, thence
7. S 56-49'17" W 270.38 feet, thence
8. N 38-28'40" W 236.15 feet, thence
9. N 65-27'56" W 46.673 feet, thence
10. N 25-01'25" E 174.66 feet, thence along the arc of a curve
11. 71.65 feet, said arc subtended by a chord bearing S 55-16'56" E,
distance of 71.54 feet, to a point no the curve, having a radius
of 375.00 feet and a central angle of 10-56'52", thence
12. N 44-11'13" E 196.39 feet, thence
13. N 48-09'07" W 24.95 feet, thence
14. N 44-11'13" E 155.69 feet, thence
15. S 45-48'47" E 24.93 feet, thence
16. N 44-11'13" E 200.00 feet, thence
17. N 45-48'47" W 39.44 feet, thence
18. N 34-13'19" E 203.13 feet, thence
19. N 31-08'52" E 208.34 feet, thence
20. N 41-08'07" E 206.54 feet, thence along the arc of a curve
21. 38.30 feet, said arc subtended by a chord bearing S 50-07'12"E, a
distance of 38.28 feet, to a point, having a radius of 375.00 feet
and a central angle of 5-51'06", thence
22. N 42-48'21" E 258.09 feet, thence
23. S 23-2O'48" E 309.32 feet, thence
24. S 34-45'41" E 497.03 feet, thence
25. S 7-07'57" E 399.98 feet, thence
26. S 26"4328" W 354.53 feet, thence
27. N 71-20'27" W 185.51 feet, thence
28. N 19-47'43" E 26.34 feet, thence
29. N 72-04'26" W 200.02 feet, thence
30. N 17-O1'28" E 32.50 feet, thence
31. N 78-42'53" W 190.00 feet, thence
32. S 26-16'40" W 154.62 feet, thence
33. N 84-32'57" W 49.01 feet, to the POINT OF BEGINNING, containing 1,
102,804 square feet or 25.317 acres land, more or less.
This property is subject to all casements and rights of way, recorded or
unrecorded.
LEGAL DESCRIPTION FOR UNIT VII WINDSONG PLANTATION, EAGLES LANDING
SCHEDULE A
(Continued)
Commitment No. 962399-11
All that tract or parcel of land, containing 1,847,677 square feet or 42.417
acres of land, more or less, lying and being in Land Lots 2 and 3 of the 12th
District, Henry County, Georgia and being that property more particularly
described as follows:
To find the true point of beginning, begin at the point of intersection of the
Northern right-of-way of Redbud Land (50 foot right-of-way) and the Eastern
right-of-way line of Mulberry Street (50 foot right-of-way), thence North 12
degrees 35 minutes 43 seconds West 53.02 feet, thence along the arc of a curve
116.73 feet, said arc subtended by a chord bearing North 32 degrees 51 minutes
44 seconds West a distance of 114.31 feet, to a point on the curve, having a
radius of 165.00 feet and a central angle of 40 degrees 32 minutes 02 seconds,
thence South 36 degrees 52 minutes 15 seconds West 50.00 feet, thence North 53
degrees.97 minutes 45 seconds West 24.58 feet, thence South 58 degrees 44
minutes 24 seconds West 160.00 feet, thence North 41 degrees 10 minutes 01
seconds West 31.00 feet, thence South 56 degrees 49 minutes 17 seconds West
270.38 feet, thence North 38 degrees 28 minutes 40 seconds West 236.15 feet,
thence North 65 degrees 27 minutes 56 seconds West 46.673 feet to the POINT OF
BEGINNING.
FROM THE POINT THUS ARRIVED AT run thence. North 65 degrees 27 minutes 56
seconds West 76.96 feet to a point; thence North 64 degrees 58 minutes 35
seconds West 209.66 feet to a point; thence South 47 degrees 32 minutes 34
seconds West 55.43 feet to a point; thence South 88 degrees 18 minutes 40
seconds West 114.77 feet to a point; thence South 81 degrees 30 minutes 58
seconds West 112.89 feet to a point; thence South 77 degrees 28 minutes 59
seconds West 113.31 feet to a point; thence South 70 degrees 15 minutes 08
seconds West 92.33 feet to a point; thence North 03 degrees 01 minutes 37
seconds West 58.83 feet to a point, thence North 23 degrees 58 minutes 39
seconds West 139.47 feet to a point, thence North 15 degrees 09 minutes 44
seconds West 102.45 feet to a point, thence North 08 degrees 59 minutes 0l
seconds West 159.52 feet to a point, thence North 33 degrees 59 minutes 38
seconds West 311.31 feet to a point, thence North 64 degrees 01 minute 51
seconds East 324.75 feet to a point, thence North 21 degrees 38 minutes 18
seconds East 380.74 feet to a point, thence North 47 degrees 47 minutes 11
seconds East 368.61 feet to a point, thence North 80 degrees 56 minutes 33
seconds East 110.55 feet to a point, thence South 15 degrees 52 minutes 00
seconds East 150.56 feet to a point, thence South 70 degrees 32 minutes 17
seconds East 84.75 feet to a point, thence North 67 degrees 31 minutes 27
seconds East 51.14 feet to a point, thence North 40 degrees 50 minutes 43
seconds East 98.23 feet to a point, thence North 19 degrees 13 minutes 21
seconds East 106.88 feet to a point, thence North 61 degrees 48 minutes 47
seconds East 77.82 feet to a point, thence South 82 degrees 54 minutes 50
seconds East 461.33 feet to a point, thence South 60 degrees 47 minutes 53
seconds East 511.44 feet to a point, thence South 23 degrees 20 minutes 48
seconds East 15.91 feet to a point, thence South 42 degrees 48 minutes 21
seconds West 258.09 feet to a point, thence along the arc of a curve 38.30
(See Attached for Legal Continuation)
Smith, Welch & Studdard COMMONWEALTH LAND TITLE INSURANCE COMPANY
This commitment is invalid unless the Insuring Provisions
and Schedules A and B are attached.
SCHEDULE A
(Continued)
Commitment No. 962399-11
feet to a point, said arc subtended by a chord bearing North 50 degrees 07
minutes 12 seconds West a distance of 38.28 feet to a point having a radius
of 375.00 feet and a central angle of 5 degrees 51 minutes 06 seconds, thence
South 41 degrees 08 minutes 07 seconds West 206.54 feet to a point, thence
South 31 degrees 08 minutes 52 seconds West 208.34 feet to a point, thence
South 34 degrees 13 minutes 19 seconds West 203.13 feet to a point, thence
South 45 degrees 48 minutes 47 seconds East 39.44 feet to a point; thence
South 44 degrees 11 minutes 13 seconds West 200.00 feet to a point; thence
North 45 degrees 48 minutes 47 seconds West 24.93 feet to a point; thence
South 44.degrees 11 minutes 13 seconds West 155.69 feet to a point; thence
South 48 degrees 09 minutes 07 seconds East 24.95 feet to a point, thence 44
degrees 11 minutes 13 seconds West 196.39 feet to a point, thence along the
arc of a curve 71.65 feet, said arc subtended by a chord bearing North 55
degrees 16 minutes 56 seconds West, a distance of 71.54 feet, to a point on
the curve (said point also being the proposed Northeast corner of Lot 9, Unit
7 of Windsong Plantation) , having a radius of 375.00 feet and a central angle
of 10 degrees 56 minutes 52 seconds, thence South 25 degrees 01 minute 25
seconds West 174.66 feet to the POINT OF BEGINNING.
Smith, Welch & Studdard COMMONWEALTH LAND TITLE INSURANCE COMPANY
This commitment is invalid unless the Insuring Provisions
and Schedules A and B are attached.
Page 2
Windsong Unit 7, Proforma Revenue and Estimated Costs
October 11, 1996
Lots 82
Lot Sales Price ($30,000.00 - Average) $2,460,000.00
Sales Costs $105,000.00
Net Sales $2,355,000.00
CONSTRUCTION COSTS:
Engineering & Surveying S82,000.00
Land Release $155,200.00
Clearing & Grading $201,000.00
Storm Drainage $115,000.00
Water $94,000.00
Sewer $219,000.00
Grassing $15,000.00
Curb $50,000.00
Paving $82,000.00
Amenities $220,000.00
Contingencies $273,600.00
TOTAL COSTS (loan Amount) $1,508,800.00
Page 2
Windsong Unit 6, Proforma Revenue and Estimated Costs
July 18, 1996
Lots 52
Lot Sales Price ($30,000.00 - Average) $1,560,000.00
Sales Costs $65,000.00
Net Sales $1,495,000.00
CONSTRUCTION COSTS:
Engineering & Surveying $52,000.00
Land Release $101,600.00
Clearing & Grading $138,000.00
Storm Drainage $98,600.00
Water $73,000.00
Sewer $97,500.00
Grassing $10,000.00
Curb ($600/Lot) $31,200.00
Paving $52,000.00
Amenities $220,000.00
Contingencies $156,100.00
TOTAL COSTS (loan amount) $1,030,000.00
APPRAISER QUALIFICATIONS
ROBERT WILSON, IFAS, CERT.#1497
139 HAMPTON ROAD. HEIGHT: 6'0"
FAYETTEVILLE, GA 30214 WEIGHT: 180
PHONE: 460-6473 (H) HEALTH: EXCELLENT
996-7482 (0)
EDUCATION:
Rutherford High School - Panama City, Florida 1963-1967
Warner Robins High School - Warner Robins, GA. 1967
(Graduate)
Middle Georgia College - Cochran, GA. 1967-1970 Graduate
(Associate Arts Business Administration)
Georgia State University - Atlanta, GA. 1971 to present (Second Quarter
Senior Marketing Major).
EXPERIENCE:
Ron-Fra Development Corp.
Residential Construction 1971-1974
Clayton County Assessors Office
Residential Staff Appraiser III - 1975-1978:
Responsible for all residential construction/
Appraising 12th District, Clayton County.
Commercial Appraiser IV - 1978-1982:
Responsible for all commercial/industrial/apartment
Construction, appraising and formulation of pricing
schedules.
Chief Appraiser: 1982-1986: Responsibilities to include daily
administration of Clayton County Tax Assessors Office. Directly
supervised staff of 22 appraisers/clerks/support personnel with
annual objective of maintaining approximately 6 Billion Dollar
Tax Base. Personal appraising responsibilities of Million Dollar
accounts and Hartsfield International Airport.
Bob Sorrells and Associates - 1986-Present: Associate
Member Independent Fee Appraiser, Residential/Commercial
Accounts.
ROBERT WILSON
PAGE TWO
PROFESSIONAL COURSES AND AFFILIATIONS:
Georgia Association of Assessing Officials - GAAO
International Association of Assessing Officers - IAAO
National Association of Independent Fee Appraisers:
N.A.I.F.A. - Vice President-Tara Chapter, 1990 -
N.A.I.F.A. - President Tara Chapter, 1991 -
DeKalb Board of Realtors-Affiliate Member-1988 to 1991
Right of Way Association-Member -1990/1991
GAAO Course I - General Appraisal Techniques
GAAO Course IA - Advanced Appraisal Techniques
GAAO Course II - Income Approach to Value
GAAO Course IIA - Advanced Income Applications
GAAO Course III - Valuation of Personal Property
GAAO Course IV - Valuation of Rural Land.
GAAO Course V - Property Mapping Workshop
GAAO Workshop - Shopping Center Valuation
IAAO I - Fundamentals of Real Property Appraising
IAAO II - Income Approach to Valuation.
GAAO Seminar - shopping Center Evaluation Techniques.
GAAO Seminar - Computer Techniques to Evaluation.
Avmark Aircraft Appraisal Seminar - Aircraft appraising
N.A.I.F.A. - Course I - General Principles of
Residential Appraisers
N.A.I.F.A. - F.H.L.M.C.- Single Family Report Writing
Seminar
Employee Relocation Council - Relocation Appraisal
Seminar
N.A.I.F.A. - Uniform Standards of Professional Appraisal
Practice
N.A.I.F.A. - Fannie Mae Guidelines for Condominiums
& Deminimus PUDS Seminar
N.A.I.F.A. - Condemnation Seminar
N.A.I.F.A. - Market Abstraction Seminar
Marshall & Swift - Cost Approach Seminar
ROBERT WILSON
PAGE THREE
CERTIFICATES & DESIGNATIONS:
Certified Real Estate Appraiser - State of Georgia
#CO01497.
Senior Member of National Association of Independent Fee
Appraisers
I.F.A.S. Designation - Certificate #1225
Certified by Georgia Department of Revenue
as Class IV Appraiser 1976 to 1986
Certified by Clayton County Board of Assessors
as Chief Appraiser 1982 to 1986
Member - International Right of Way Association.
APPRAISER QUALIFICATIONS
B.G. SORRELLS, IFAS
1950A Highway 85 North
J & R Plaza
Jonesboro, Ga. 30236
Ga. Cert. Gen. #1154
EMPLOYMENT: 1964-Present Self-employed, Real Estate
Appraisals & Consulting-Residential,
Commercial and Acreage and Property Tax
Consulting.
MILITARY: 1953-1955 U.S. Army, Korean War Veteran,
Discharged 1955.
EDUCATION: 1952 Russell High School, East Point, Georgia.
1956-57 Georgia Institute of Technology.
PERSONAL: Born April 26, 1934, East Point, Georgia.
Married: Wife-Sue, Children-Sharon, Danny and
Renee. All are members of Atlanta Baptist
Church, College Park, GA. Health-Excellent,
no physical limitations. Height 6'1", weight
195 pounds. Homeowner: Route 1, Box 217,
Mockingbird Lane, Brooks, GA. 30205. Hobbies-
Fishing and golf.
REFERENCES: Business and personal references can be
furnished upon request.
RE: SUPPLEMENT TO RESUME OF BOB SORRELLS:
EDUCATION: Russell High School.
Georgia Institute of Technology (Industrial
Management).
Georgia Institute of Technology (Seminars on
Real Estate and Appraising). Georgia State
University (Seminars on Real Estate &
Appraising). National Association of
Independent Fee Appraisers (I.F.A. Member
Exam). Senior Exam-National Association of
Independent Fee Appraisers. Atlanta Area Tech
(Commercial Real Estate, Insurance and Appraising
courses). Most courses offered by the National
Association of Independent Fee Appraisers. Tax
Arbitration Courses (Ad Valorem). Marshall and Swift
Cost Seminars - Commercial and Residential.
S.R.E.A. (Courses and Seminars on Appraising).
CERTIFICATES & DESIGNATIONS:
State of Georgia Certified Real Estate Appraiser #1154.
Member International Right of Way Association Senior
Member of National Association of Independent Fee
Appraisers.
I.F.A.S. Designation. Certificate #1224.
Awarded 1991 Appraiser of the Year for N.A.I.F.A.
Veteran's Administration Fee Appraiser #X238. Dept. HUD,
Fee Appraiser #2151. Licensed Real Estate Broker, Georgia
#4871.
APPRAISAL EXPERIENCE:
Single Family Residence (including construction loans &
REO's) Vacant lots and acreage-including farms.
Commercial/Industrial properties. Multi-Family dwellings.
Church, school and special use properties. Fulton County
Tax Arbitration. Clayton County Tax Appeals. School
Buildings, Fulton, Clayton, Fayette Counties and City of
Atlanta Boards of Educations. Special use properties for
Federal, State and County Government Agencys.
Various properties for U.S. Bankruptcy Court
and U.S. Marshalls Office. Various Properties, Atlanta
Airport Authority, including Air Rights and Runway
Locations.
APPRAISAL EDUCATION:
Course 1.1 Principles of Real Estate
Appraising.
Course 2.lA Income Property Appraising I.
Course 2.lB Income Property Appraising II.
Course 1.2 Manufactured Housing/Mobile Home
Appraising.
Course 1.4 Review Appraising.
Course 1.7 URAR Lenders Seminar.
Course 4.1 FHLMC Single Family Report
Writing.
Course 4.2 FHLMC Small Residential Income
Report Writing.
Course 4.3 Narrative Report Writing.
Course 5.1 Condemnation seminar.
Course 6.1 Investment Analysis.
Course 6.2 Applying Compound Interest in
Today's Real Estate Market.
Course 6.4 Mini Math for Appraisers.
Course 7.1 Residential Cost Approach
(Marshall & Swift).
Course 7.2 Commercial Cost Approach
(Marshall & Swift).
Course 9.1 Appraising the Condominium.
Course 11.1 Professional Standards.
FHLBB - Seminars on R-41-A-B-C.
Seminars on Appraising Historic Properties.
Employee Relocation Seminars.
SUPPLEMENT TO RESUME OF BOB SORRELLS:
APPROVED TO APPRAISE AND REVIEW BY THE FOLLOWING:
(PARTIAL LIST)
Veteran's Administration Fee Appraiser, Department of
HUD-FHA, FNMA, Freddie Mac, Beneficial Finance Companies,
Delta Airlines Credit Unions, Landmark Financial Services,
Liberty Mortgage Corp., Merchants Bank, First State Bank,
Bank of Coweta, Newnan Savings Bank, Clayton National, Trust
Company of Georgia, First Union Mortgage Company, Tara State Bank,
Wachovia Bank, Bank South, N.A., Bank South Mortgage, Southern Federal
Savings and Loan, First National Bank of Henry County, Chemical Financial
Services Corp., Equitable Mortgage Corp., Griffin Federal, Barnett Bank,
First Bank & Trust, United Bank Corp., Norwest Mortgage Corp., City
Mortgage, BancBoston Mortgage, Home Federal Savings and Loan, Resolution
Trust Corp., American Family Life Ins. Corp, Peach State Bank, Nations
Bank Citizens Bank and Trust of Fayette Co., Gulf States Mortgage Corp.,
Banker's First Mortgage. Numerous legal firms for wills, estates, etc.
Individuals and corporations, Fulton and Clayton County Tax Appeals,
Federal, State and Local Governments, Atlanta Airport Noise Mitigation
Program, F.A.A., Lincoln Services, ChemExec, Home Equity, Merrill Lynch
Relocation Companies, S.B.A. and Department of Transportation.
Certified as expert witness in Federal and State courts.
REAL ESTATE AND RELATED EXPERIENCES:
Real Estate Appraiser and Broker; Real Property Tax
Consultant for all types of property, 1965 to present.
Developer and contractor of subdivision 1972 to 1974.
Owner of Bob Sorrells and Associates, Real Estate
Appraisers and Consulting.
(b 4.) - APPRAISAL OF EAGLE'S LANDING PHASE 6 AND 7 DATED AS OF MAY 7, 1997
PREPARED BY JOHN K. SELFE III.
May 7, 1997
Mr. David Gill RE: Killearn Properties, Inc.
First State Bank Eagles Landing Phase 6 & 7
Stockbridge, Georgia McDonough, Georgia
Dear Mr. Gill:
In response to your request, the undersigned has completed an appraisal- of the
captioned property.
Please be informed that a careful- and personal inspection was made of this
site and due consideration was given to all factors and forces that influence
property values at the subject location. Based upon the information that I
have gathered and applied to the subject property, and upon my general
experience in the field of real estate appraising, and as a result of my
investigations and findings it is my considered and professional opinion that
the subject property warrants a Market Value as of this date of:
THREE MILLION EIGHT HUNDRED THOUSAND DOLLARS
($3,800,000)
The attached report is the culmination of careful analysis of the subject
property and the economic factors influencing its Market Value. The data
reasoning utilized in arriving at this value estimate are also presented
in the attached report.
I thank you for this assignment and if I can be of further service to you
in this or other matters, please do not hesitate to call on me.
Respectfully submitted,
/s/ John K. Selfe III
JOHN K. SELFE III
Quality Appraisal Service, Inc.
BASIC ASSUMPTIONS AND LIMITING CONDITIONS
This appraisal is subject to the following conditions:
1. The legal description/survey furnished is assumed to be correct. No
responsibility is assumed for matters legal in character nor is any opinion
rendered as to the title, which is assumed to be good and marketable and in fee
simple.
2. All existing liens and encumbrances have been disregarded unless otherwise
stated, and the property is appraised as though free and clear under
responsible ownership and competent management.
3. Any proposed or incomplete improvements included in this report are assumed
to be completed in accordance with approved plans and specifications and in a
workmanlike manner.
4. Information furnished by others is believed to be reliable, but no
responsibility is assumed for its accuracy.
5. Any sketches, plats or drawings included in this report are included
to assist the reader in visualizing the property. We have made no survey
of the property, and assume no responsibility in connection with such
matters
6. Unless otherwise noted herein, it is assumed that there are no
encroachments, zoning restrictions, or violations existing in the subject
property.
7. We are not required to give testimony or attendance in court by reason
of this appraisal, with reference to the property in question unless
arrangements have been made previously therefor.
8. Disclosure of the contents of this appraisal report is governed by the
Bylaws and Regulations of the National Association of Real Estate
Appraisers.
Therefore, except as hereinafter provided, the party for whom this appraisal
report was prepared may distribute copies of this appraisal report, in is
entirety, to such third parties as may be selected by the party for whom this
appraisal report shall not be given to third parties without the prior consent
of the signatories of this appraisal report. Further neither all nor any part
of this appraisal report shall be disseminated to the general public by the use
of advertising media or other media for public communication without the prior
written consent of the signatories of this appraisal report.
9. No responsibility is assumed for engineering matters, neither
structural. or mechanical. Good structure and mechanical conditions are
assumed to exist, and no opinion as to these matters is to be inferred or
construed from the attached report.
10. The value estimate applies only to the entire property, and cannot be
prorated to lndividual portions or fractional -interests. Any proration or
division of interest will invalidate the value estimate, unless such
proration or division of interests is set forth in this report.
11. The forecasts or projections included in this report are utilized to assist
in the valuation process. They are based on current market conditions, current
short-term supply and demand factors, and continued stable economy. These
forecasts are, therefore, subject to changes in future conditions which cannot
be accurately predicted by the appraiser,and these changes could affect the
future income and/or value estimates.
12. In this appraisal assignment the existence of potentially hazardous
material such as asbestos, urea formaldehyde foam insulation, radon gas,or any
other toxic material, has not been considered. The appraiser is not qualified
to detect such substances and, if desired, recommend that the client retain an
expert in this field.
13. It is assumed that all utilities are available to the subject property, and
that no undue expense will be incurred in providing them to the site.
PICTURE SITE
PICTURE STREET
IDENTIFICATION AND PURPOSE OF APPRAISAL
Description of Property
The subject property consists of 41 proposed lots in an existing subdivision.
The property is located approximately 2 miles south of Stockbridge in the
Eagles landing Development. The subject is known phase 6 and 7 of Eagles
Landing Country Club.
Date of Appraisal
May 7, 1997
Legal Description
Land Lots 17 and 18 of the 6th Land District, Henry County, Georgia.
Property Rights Appraised
Fee Siniple Interest
Zoning
The subject property is zoned RM within a Planned Development District. This
subdivision is also restricted by covenants.
Utilities
The utilities available are as follows: electricity, public water,telephone,
cable television, and sewage. No utility problems can be anticipated.
Street
Street will be paved with asphalt per code. The subdivision will have curbs,
storm sewers, street lights and underground electricity.
IDENTIFICATION AND PURPOSE OF APPRAISAL (CONT.)
Topography
All lots are considered buildable with average topography and terrain.
Land is considered rolling.
Flood Data
According to FEMA Flood maps dated November 2, 1983 the subject properties are
not located in a flood area. Flood panel number 130468 0070B. See attached
copy.
Census Tract
701.03
Purpose and Conditions of Appraisal
The appraisal is made at the request of Mr. David Gill, First State Bank,
Stockbridge, Georgia, for the purpose of estimating the market value of the
subject property. The undersigned assumes:
1. there are no adverse easements, encroachments or other conditions
that would adversely affect the marketability of this property
2. that all lots which will have septic tanks are so approved by
county.
3. that the final plat will receive county approval.
In addition, we have not examined any engineering studies done on the
site however, in lieu of any contradicting evidence, it is assumed that
the sites have adequate drainage capabilities and load bearing qualities.
IDENTIFICATION AND PURPOSE OF APPRAISAL (CONT.)
Lot Description
The typical lot measures 130 feet by 200 feet. All of the lots with the
exception of lot 40Q are golf lots. The total acreage of both phases is
approximately 32.88 acres. 21 acres are in unit 6 with the remaining 11.88 in
unit 7. Phase 6 has 1700 lf of street while phase 7 has 1366. Please see plats
for visualization
INDENTIFICATION AND PURPOSE OF THE APPRAISAL (CONT.)
Definition of 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 is the consummation of
a sale as of a specified date and the passing of title from seller to buyer
under conditions whereby:
a. buyer and seller are typically motivated;
b. both parties are well informed or well advised, and each acting
in what he considers his own best interest;
c. a reasonable time is allowed for exposure in the open market;
d. payment is made in terms of cash in U.S. dollars or in terms of
financial arrangements comparable thereto; and
e. 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.
Definition of Highest and Best Use
"That reasonable and probable use that will support the highest present value,
as defined, as of the effective date of the appraisal."(Real Estate Appraisal
Terminology, published by the American Institute of Real Estate Appraisers and
the Society of Real Estate Appraisers,1975.)
IDENTIFICATION AND PURPOSE OF THE APPRAISAL, (CONT.)
Highest and Best Use of the Subject Property
The highest and best use of a site is subject to the dynamics of the
marketplace and thus is not defined in permanent terms but rather is a concept
whereby the utility of a site evolves depending upon the character of the
market as defined by the pulsating parameters of supply and demand. Thus, as
one evaluates a property's highest and best use, one obviously needs to examine
the specific constraints governing present and alternative uses of the
property. The specific time at which the highest and best use is evaluated
recognizes the market forces that ultimately create value.
The American Institute of Real Estate Appraisers in their authoritative text,
The Appraisal of Real Estate, 8th Edition, 1983, defines highest and best use
as follows:
"The reasonable and probable use that supports the highest present
value, as defined, as of the date of the appraisal. Alternatively,
it is said to be the use, from among reasonably probable and legal
alternative uses, found to be physically possible, appropriately
supported, financially feasible, and that results in the highest
present land value.
Obiviously, the highest and best use of a property is a determination made
in subjective terms based on the appraiser's judgement and analytical skills.
In layman's terms, the highest and best use is that use which will yield the
owner the greatest potential benefit, generally interpreted and measured in
terms of present and future income streams generated from the subject.
INDENTIFICATION AND PURPOSE OF THE APPRAISAL, (CONT.)
Highest and Best Use of the Subject Property, (cont.)
Appraisal literature breaks down the analysis of highest and best use
into the following four areas:
1.) physically possible uses;
2.) legally permissible uses;
3.) financially feasible uses; and
4.) maximally productive uses.
Site Analysis
In ascerting the highest and best use of a site, it is necessary to study the
four previously mentioned factors. These are physical adaptability of the
site, lagality of use, the marketability of the use, and the most profitable
use. While normally the lagality of use and physical adaptability of a site is
readily ascertainable rarely is the most profitable marketable use apparent.
As previously mentioned, the Subject property is zoned RM. Uses permitted in
this District are included in this report. See attached. This zoning could be
described as favorable but somewhat limited in its utilization. Physically,
all the lots have appropriate access with a minimum of 54 feet of road frontage
and are large enough to allow for most uses under the current zoning. No
utility problems can be anticipated. Out of the possible and permissable uses,
the next step is to consider those used which will produce a positive return to
the owner (i.e.feasible uses) . Given the economic growth of the neighborhood,
and the propertys specific location, the subject's highest and best use is the
current zoning RM with a variance.
METROPOLITAN ATLANTA OVERVIEW
The City of Atlanta is considered the financial, communication, and
transportation center of the southeastern region of the United States. Atlanta
serves as the seat of the Fulton County government and as the capital city of
the State of Georgia. Atlanta has consistently had one of the stronger
economies in the United States, attributable largely to its strategic location,
diversified economic base, and lack of physical and geographic barriers.
The Atlanta Metropolitan Statistical Area (MSA) was enlarged from 15 to 18
counties in the 1980 population census. As of December 31, 1980, the
population of the 15 county MSA was about 2,064,200 the 18th largest in the
nation. Since that tine, the three additional counties, Coweta, Barrow and
Spalding, have MSA population increases of 110,200 persons for a total 1980 MSA
population of 2,174,000. By December 31, 1990 the population in the 18 county
area had increased to 2,914,000.
The Atlanta MSA was first enlarged in 1973 from 5 to 15 counties, making long
term analysis of population trends difficult. At year end 1974 (the first full
year after the expansion) the total Metro population was 1,791,400. The net
growth between 1974 and 1980 was 272,800 persons or 15.2%. The population in
this region is expected to increase to 3,334,000 by the year 1995, which
represents a growth of14.4% from December 1990.
METROPOLITAN ATLANTA OVERVIEW (CONT.)
The 1973 expansion of the Atlanta MSA resulted in a substantial growth in land
area, from 1,728 square miles to 4,236 square miles. This was an increase of
245%. At the same time the effective buying income increased only 10.34%. The
land area was expanded by an additional 806 square miles in 1981 when three
counties were added to the present MSA, increasing the land area to 5,042
square miles. As of December 31,1990, Retail Sales in the Atlanta MSA were
24.2 billion, and expected to reach 30 billion by 1995.
To quantify the anticipated growth of the Atlanta Metro Area, consider that the
Georgia Office of Planning and Budget is predicting a population of 3.1 million
by the year 2010. Georgia's population is expected to reach almost 8 million
by the year 2010, a 2.9 million increase in a period of three decades. By
comparison, there was only a two million increase over the past 40 years.
Finance
Atlanta is the heart of finance in the southeast region. In addition to being
the headquarters location of the Sixth District Federal Reserve Bank, Atlanta
has approximately 75 banks with more than 400 branches and total resources of
8.8 billion. Metropolitan Atlanta ranks ninth in the nation in bank clearings.
There are 21 savings and loan associations with home offices in the region.
Additionally, there are several foreign financial institutions located in
Atlanta including, Barclays Bank International, Ltd., Swiss Credit Bank, and
the French Banking Corporation.
METROPOLITAN ATLANTA OVERVIEW (CONT.)
Employment
The Atlanta MSA had a non-agricultural employment force of 1,513,200 as of
July, 1994. In the five year period from December 1985 to December 1990, the
total non-agricultural employment of the Atlanta Metro Area increased by
185,380 persons; this represents an increase of about 15% over the five year
period.
The employment mix has remained fairly stable and well-diversified. A
breakdown by employment group for the 18 county Atlanta MSA as of
April, 1994, was:
NON-AGRICULTURAL EMPLOYMENT BY INDUSTRY
IMUSTRY #EMPLOYED % of TOTAL EMPLOYED
Mining 1,000 0%
Construction 55,900 4%
Retail Trade 268,800 17%
Wholesale Trade 136,700 9%
Transportation 139,900 9%
Services 378,300 26%
Manufacturing 184,100 12%
Government 230,800 16%
Real Estate 117,900 7%
Totals 1,513,200 100%
The current unemployment rate for the Atlanta MSA is 4.3% (down from 4.9% in
July, 1991), which is lower than the State of Georgia's 5.4%, and the U.S.
average of 5.8%.
AREA MAP GEORGIA METRO COUNTIES
METROPOLITAN ATLANTA OVERVIEW (CONT.)
An evidence of Atlanta's emergence from a regional city to a national
trade and business center, most of the fortune 500 top industrial firms
in the nation have operations in Atlanta. Additionally, over twenty
companies have chosen to located their national and/or international
headquarters in Atlanta including the following firms:
Coca Cola International, Coca Cola Enterprises, Georgia Gulf, Georgia Pacific,
Goldkist, National Service Industries, Cxford Industries, Scientific Atlanta,
Equifax, Genuine Parts, Turner Broadcasting, Delta Air Lines, Holiday Inn,
Colonial Pipeline, United Parcel Services, Bank South-Wachovia, Suffrust Bank,
Home Depot, Bell South, Southern Company, and Oglethorpe Power.
Some of the large manufacturing earployers in this region include General
Motors, Lockheed of Georgia, Western Electric - AT&T, Ford Motor Company, and
Atlantic Steel. This widely diverse manufacturing base accounts for about 12%
of the Atlanta area's total employment. After gaining 21,300 jobs in 1993, the
area has been forecated as adding 39,000 jobs in 1995.
METROPOLITAN ATLANTA OVERVIEV (CONT.)
Industrial Market
The Atlanta Industrial Market contains approximately 233 million square feet of
warehouse and 14 million square feet of business space. In addition,
approximately 42 million square feet of distribution space and 3 million square
feet of business service space is vacant. Industrial absorption was down from
534,000 square feet in 1991 to 378,000 square feet in the second quarter of
1994.
Several major reasons for Metro Atlanta's appeal as an industrial location
include: moderate climate; large, comparatively inexpensive labor force; low
energy cost; abundant water resources; and the city's extensive public
transportation facilities.
Housing
The number of housing units in the Atlanta Region grew approximately 46% during
the 1980's. Of the total- housing units, 7.8% were vacant in 1990, compared
with 8.0% in 1989 and 6.3% in 1980. The average household in the area was 2.61
in 1990, shading a decline of 4.7% from 2.7% in 1980.
In early 1994 the average apartment rented for $555. Average occupancy levels
for the entire metro area ranged from 82% to 85%, down approximately 4% from
late 1992. Rents increased only slightly during 1992, generally less than 1%
and approximately 20 apartment foreclosures per month due mainly to low
occupancies and lower than expected rents. However, the trend is upward due to
apartment permits being down.
METROPOLITAN ATLANTA OVERVIEW (CONT.)
The median house value in 1990 was $89,277 in the Atlanta MSA. The median
contract rent in 1990 was $441, with 68.2% of the units renting between $350
and $749.
Office Market
The Atlanta office market was reported to have 84.1 million square feet
existing as of December, 1991, with 19.3% overall vacancy. The office market
absorbed 2.3 million square feet in 1991. There are 3.3 million square feet of
office space under construction with 69% pre-leased. Carter & Associates
reported that the approximate rental rates per square feet quoted were: $17.65
in all existing buildings, $20.58 in class A buildings, and $27 in buildings
under construction; however,average rental rates decreased approximately $1.28
per square foot during the last twelve months.
The office market forecast for 1994 includes a total of 89 million square feet
of office space, approximately 20% vacant, an average rental rate of $18.00, and
net absorption of 1.9 million square feet,the most since 1992.
Transportation and Communication
Atlanta is a transportation hub, with a busy international airport, an inner
city rapid transit rail system, and an expansive highway system. Approximately
90% of the U. S. population is within three hours flying time from Hartsfield
International Airport. Atlanta is considered to have an excellent
transportation network.
METROPOLITAN ATLANTA OVERVIEW (CONT.)
Convention Center
Another pertinent factor should be noted regarding the economic base of
Atlanta. The city is rapidly becoming known as one of the nations most
important convention centers, ranking fourth nationally in annual delegate
attendance. In the ten year period from 1980 to 1990, the number of
conventioneers meeting in Atlanta has almost doubled increasing from one
million to 1.9 million. The construction of the Georgia World Congress Center
and 12 major hotels since 1973 has allowed this expansion. The World Congress
Center, a trade show and convention facility, houses the largest single-level
exhibition hall in the world at 650,000 square feet, which was expanded to
952,000 square feet in 1992. It contains 70 meeting rooms, a 2,000 seat
auditorium (with simultaneous language-translating services), and a 33,000
square feet ballroom. The center was expanded in 1992 to a total of 2.1
million square feet.
Government
The local government of the City of Atlanta consists of a mayor and an
aldermanic board, both having reasonably good relationships with the local
business community. The majority of involved parties has the common goal of
gaining for Atlanta the reputation as an international city. As stated
earlier, Atlanta serves not only as the Fulton County Government seat, but as
the Capital City of the State of Georgia. The city is also the regional
headquarters for various federal agencies.
METROPOLITAN ATLANTA OVERVIEW (CONT.)
Summary
In summary, the basic forces which influence real estate values are currently
considered to be favorable and in reasonable harmony. These forces may be
separated into the following categories: population, economic, governmental,
and social. The preceding paragraphs have addressed the more important
elements within each category, specifically as they relate to the influences
on real property values in the Atlanta Region. During the late 1980s and early
1990s, the national as well as the local economies experienced recessionary
characteristics. However, based partially on current increases in occupancy
levels and consumer spending, we believe the economy is beginning to show signs
of recovery. It is concluded that in general these forces are currently
combining to afford this area a very positive outlook with regard to
anticipated levels of demand for local real estate. Having hosted the 1994
National Football League Championship "Superbowl" and the 1996 International
Summer Olympic Games, the local economy has experienced short and long-term
positive impact. The impact has reached almost every facit of the local
economy and the perception of Altanta as an international city. Because of the
anticipated continued growth in demand, the potential for the likelihood of
increasing real estate values in the Altanta area and in the subject vicinity
is good.
HENRY COUNTY OVEWIEW
Henry County has recently become the fastest growimg county in the Metro
Atlanta area. Located just south of downtown Atlanta and bisected by
Interstate 75, the population has increased by over 50% in the last ten years.
During the last two decades, north Henry County, including Stockbridge has
witnessed unimaginable growth. North Henry is, by far, the residential and
retail center of the county. The population has more than doubled since 1970.
Central- Henry County, including the county seat of McDonough, has also
experienced growth. About 37% of the county's population is located in central
Henry County.
Hampton and Locust Grove are the holdouts. The growth in these two areas has
been very slight. Currently, these two towns are expected to be the last in
the county to develop. However, the proposed Outer Perimter Highway and the
proposed second Atlanta Airport could have significant impact on their
development.
Henry County has a young, relatively well-educated population. The median age
is just over 30 with a median house-hold income of $40,208. For the year 1989,
95% Of the potential workforce was employed.
Henry County has been fortunate to receive its share of industrial
Development. Japan-based NEC Technologies got the ball rolling in 1985 when
they announced plans to build their first plant in Georgia. They have been
followed by BellSouth Services, Carbonic Industries, Ecolab, Toppan
Interamerica, Disco, and more recently, Pep Boys, Nestle, and Ford Motor
Company Parts Distribution.
Henry County has been very fortunate over the last ten years. Henry County has
Planned and managed our remarkable growth. The balanced growth between
residential, industrial and retail is expected to make Henry County the Crown
Jewel of the Southern crescent for the next 20 years.
HENRY COUNTY DEMOGRAPHIC DATA
1980 CURRENT
POPULATION 36,309 59,300
AVERAGE HOUSEHOLD INCOME $20,644 $40,208
AVERAGE PER CAPITA EBI $10,101 $16,187
TOTAL RETAIL SALES $116,937,000 $248,125,000
MAJOR EMPLOYERS IN HENRY COUNTY
OVER 500 EMPLOYEES
Henry County Schools 1400
Snapper Power Equipment 856
Henry General Hospital 750
250-499 EMPLOYEES
NEC Technologies 487
Dowling Textile Mftg. Co. 285
Smead Manufacturing Co. 281
Southern States 261
100-249 EMPLOYEES
Georgia Pacific Corporation 112
Hoyne Industries, Inc. 230
50-99 EMPLOYEES
International Paper Co. 92
Siumns Manufacturing Co. 90
Toppan 'Interainerica, Inc. 75
Costal Chemical Co. 63
Ecolab 60
Faulkner concrete Pipe co. 55
Ceramic & Metal Coatings 50
Hospitex/kTerican Supply' 50
HENRY COUNTY
Known as the "Mother of Counties," Henry County was split up to form several
adjoining counties, including Fulton, Dekalb and Clayton. Named after Patrick
Henry, the county was ceded by the Creek Indians in the Treaty of 1821.
McDonough, the county seat was incorporated in 1823. Stockbridge began as a
settlement in 1829. Locust Grove was named for a grove of flowering locust
trees and incorporated in 1893. Hampton was named for a Confederate war hero
and has a number of historical- houses and the Atlanta International Raceway.
As one of Georgia's fastest growing counties, Henry County is
strategically located on the southeastern side of Atlanta where 675 and 75
connect. Henry County, originally a cotton-growing county, was devastated
during the Civil War. Rebuilding, the county concentrated on diversification
and became independent of cotton and is now home to many industries and
offices, including a major Federal Aviation Administration Facility. With
quick interstate access, Henry County has developed into a bedroom community
for Atlanta.
Henry County has become a popular location with Hollywood directors. Movies
like "Glory" and "Murder in Mississippi" were filmed in Henry County.
Henry County's Atlanta Motor Speedway holds the record for the largest
attendance (92,000+) at a one day, paid sporting event.
Henry County's Eagles Landing Country Club is host to the LPGA golf
tournament.
MILEAGE METER
(from mid-county)
Atlanta Motor Speedway 8 miles
Cyclorama 27 miles
Disney World 450 miles
Downtown Atlanta 29 miles
Fulton County Stadium 22 miles
Hartsfield International Airport 19 miles
Interstate 20 26 miles
Interstate 285 19 miles
Interstate 675 8 miles
Six Flags Over Georgia 39 miles
Southlake Mall 14 miles
Stone Mountain 42 miles
Zoo Atlanta 27 miles
MAP EAGLE'S LANDING MASTER PLAN
Neighborhood Data
The subject property is located in the Northern sector of Henry County. The
neighborhood could roughly be defined as being bound by Jodeco Road to the
south, the city of Stockbridge to the North, State Highway 42 to the East and
Interstate 75 to the West. This area is suburban, with 65% single family
residences, 5% commercial, 5% Multi, and 25% vacant. The growth rate for this
area is steady with some increases in property values. The supply/demand
seems to be in balance. Marketing time is considered to be four to six
months with average market appeal. Overall Henry County is one of the
fastest growing counties in Metro Atlanta should be able to absorb all the
subject properties within two years.
The subject is located in one of the nicest areas in the South-Metro. The
Atlanta Tech Center, a large multi-use development surrounding the subject,
dominates the neighborhood. This area is a PUD with commercial, industrial,
and residential land uses. Some of the neighbors include Henry General
Hospital, Publix, Bell South, Waffle House, and Ply Mart.
The commercial properties are primarily located around Interstate 75. The
first hotel at exit 73 is under construction. There is a Texeco and BP
station also on the exit. The only fast food establishment in the area
is Waffle House. However, Subway has a portion of the subject under contract
and other restaurants are to follow.
Neiqhborhood Data (Cont.)
The industrial area is centered around the Norfolk Southern Railroad with some
pockets on Highway 42. The larger industrial plants in the area are Dunlop
Tire Corporation and Kelly-Springfield Tire Company. More industrial plants
will follow.
Eagles Landing Country Club is the main residential subdivision in the area.
It is situated on a 18-hole championship golf course that is home to a LPGA
event. Homes in Eagles Landing range from $200,000 to $1,250,000. Modestly
priced subdivisions in the area include Windsong Plantation and Parkside at
Eagels Landing. Overall, the area appears to have been well planed with the
commercial industrial, and residential areas being very well defined.
APPROACHES TO VALUE
The Cost and Income Approaches to value were not used in this analysis.
The Cost Approach to Value is based on the theory that the value of a
property is the sum of the value of the land plus the reproduction cost of all
the improvements less depreciation from all causes. Since the subject does
not have any improvements at this time the Cost Approach is deemed unreliable.
The Income Approach to Value is based on the theory that the present value of
a property is equal to the present value of its future capacity to produce
income including the proceeds of a sale at a future date. Due to the fact
that this type of property generally does not produce any income, this
approach is considered unreliable.
The most readily accepted method of valuing vacant sites is the Direct Sales
Comparison Approach to Value. This approach involves the analysis of sales of
competitive properties. A comparison is made between the appraised property
and the comparable sales which have sold within a reasonably close time
frame. The essence of the Direct Sales Comparison Approach to Value is to
discover what competitive properties have sold for in order to determine the
market value indication of the appraised property. From the data a pattern
generally emerges to indicate a value for the subject.
DIRECT SALES CCHPARISON AERF@ TO VALUE
A comparable analysis has been made of properties thought to be generally
under similar influences. Our analysis of these sales has utilized the price
per lot unit of comparison. The features influencing the value of a site such
as the subject include general location, size, road frontage, availability of
utilities, topography, zoning, and tine of sale.
The comparable sales are located in Henry County and are considered to be
under similar influences as the subject. All sales are situated within two
miles of the subject and are vacant residential lots in subdivisions.
Comparables are as follows:
Comparable # 1
Subdivision: Lot 20 H Eagles Landing
Location: same subdivision
Date of Sale: 3-96
Financing: typical
Number of Lots: one
Total Price: $100,000
Average per Lot: $100,000
Utilities: elec., water, sewer
Streets: public, paved, curbs, storm sewer
Size: 3/4 acre
Comments: golf lot
DIRECT SALES COMPARISON APPROACH TO VALUE (CONT.)
Comparable # 2
Subdivision: lot 12 R Eagles Landing
Location: same subdivision
Date of Sale: 3-97
Financing: typical
Number of Lots: one
Total- Price: $119,900
Average per Lot: $119,900
Utilities: elec., water, sewer
Streets: public, paved, curbs, storm sewer
Size: 3/4 acre
Comments: golf lot
DIRECT SALES COMPARISON APPROACH TO VALUE (CONT.)
Comparable # 3
Subdivision: Lot 2 R Eagles landing
Location: same subdivision
Date of Sale: 4-96
Financing: typical
Number of Lots: one
Total Price: $104,000
Average per Lot: $104,000
Utilities: elec., water, sewer
Streets: public, paved, curbs, storm sewer
Size: 3/4 acre
Comments: typical golf lot
DIRECT SALES COMPARISON APPROACH TO VALUE (CONT.)
Comparable # 4
Subdivision: Lot 37 H Eagles Landing
Location: same subdivision
Date of Sale: May 1996
Financing: typical
Number of Lots: one
Total- Price: $114,000
Average per Lot: $114,000
Utilities: elec., water, sewer
Streets: public, paved, curbs, storm sewer
Size: golf lot
DIRECT SALES COMPARISON APPROACH TO- VALUE (CONT.)
Comparable # 5
Subdivision: Lot 4R Eagles Landing
Location: same subdivision
Date of Sale: 4-96
Financing: typical
Number of Lots: one
Total Price: $104,000
Average per Lot: $104,000
Utilities: elec., water, sewer
Streets: public, paved, curbs, storm sewer
Size: 3/4 acre
Comments: typical golf lot
DIRECT SALES COMPARISON APPROACH TO VALUE (CONT.)
Comparable # 6
Subdivision: Lot 27Q Eagles Landing
Location: same subdivision
Date of Sale: Under Contract 5-28-97
Financing: typical
Number of Lots: one
Total Price: $129,900.00
Average per Lot: $129,900.00
Utilities: elec., water, sewer
Streets: public, paved, curbs, storm sewer
Size: 3/4 acre
Comments: future golf lot
DII= SAIES COMPARISCN APPROACH TO VALUE (CONT.)
Comparable # 7
Subdivision: Lot 36Q Eagles Landing
Location: same subdivision
Date of Sale: Under Contract 5-28-97
Financing: typical
Number of Lots: one
Total Price: $129,900
Average per Lot: $129,900
Utilities: elec., water, sewer
Streets: public, paved, curbs, storm sewer
Size: 1+ acres
Comments: large golf lot
DIRECT SALES COMPARISON APPROACH TO VALUE (CONT.)
Comparable # 8
Subdivision: Lot 33Q Eagles Landing
Location: same subdivision
Date of Sale: Under Contract within 30 days of plat
Financing: typical-
Number of Lots: one
Total Price: $129,900
Average per Lot: $129,900
Utilities: elec., water, sewer
Streets: public, paved, curbs, storm sewer
Size: 1+ acres
Comments: interior lot
DIRECT SALES COMPARISON APPROACH TO VALUE (CONT.)
Correlation of Values
The lot prices seem to vary even with all the comparables being golf lots.
The developer stated they have sold about 50% of all golf lots in the $125,000
range and 40% of all golf lots in the $105,000 range with the remaining 10%
being sold in the $90,000 range. Based on the comparables and the lots under
contract, the expected sales are as
follows:
8 lots @ $ 89,900 = $ 719,200
15 lots @ $106,000 = $1,590,000
17 lots @ $129,900 = $2,208,300
FINAL RECONCILIATION
Cash Sellout
Having derived the retail- lot prices and projected absorption (1.71 per
month), the next step is to determine deductions from the gross retail
proceeds. These deductions include marketing costs, holding costs (taxes),
and entrepreneurial or investor's profit. Marketing costs include sales
commissions and advertising. We have projected this category at 5% of gross
sales. With a development of this size, the holding costs are $150 per lot,
per year. Entrepreneurial profit represents the return required to induce an
investor to undertake the risk associated with acquiring the unsold lots and
marketing lots over the projected sellout period. Our research indicates that
entrepreneurial profit needs no deduction. The typical investor buys the lots
to make money on the improvements.
Deducting the marketing costs, holding costs, and investors profit results in
periodic net revenues. To arrive at a value indication, these periodic net
revenues must be discounted to present value. The discount rate selected
should reflect the risk incurred by the investor during the sellout period.
The discount rate can be viewed as the sum of the rate earned on a "safe,
investment such as a treasury bill or certificate of deposit, plus a premium
to account for risk. Currently, treasury bills and certificates of deposit
yeild between 4% and 5%. As there is some economic uncertainty at present, we
have considered a 5% risk premium appropriate, yeilding a range of between 9%
& 10%. We have concluded that a 10% rate reasonable reflects the market for the
subject property. The discount rate has been applied on a future value basis.
That is the net present value of the future proceeds. We have project a two
year sellout period which is an asorption rate of 1-71 per month. Total lot
sales are estimated at $4,517,500.
gross Proceeds = $4,517,500
Expenses And Profit.
sales commission/marketing expense @ 5% x lot values $225,875
taxes $250 per lot x 36 x lst year sell out $ 9,000
taxes $250 per lot x 18 x 2nd year sell out $ 4,500
Gross Receipts $4,517,500
-$ 225,875
-$ 13,500
Net Value $4,278,125
The market should be able to absorb all 41 lots in 2.0 years. The
discount rate is 10% for a 2.0 year period. The present value of the
proposed lots is $3,800,809.00. We estimate the 41 lot subdivisions to
have a present value of:
$3,800,000
THREE MILLION EIGHT HUNDRED THOUSAND DOLIARS
INSERT MAP OF SUBJECT
ZONING
(5) Minimum rear yard 40 feet
(6) Maximum height 75 feet
Sec. 3-7-157 . PD: planned development district.
(a) Purpose. It is the purpose of the planned development district
to encourage the development of compatible land used within the frame
work of a master development plan for residential and nonresidential
land used within an environmentally compatible setting. The PD district
is designed to be appended to residential, commercial or industrial
zoning districts to provide flexibility in the application of development
standards and site design when approved according to a master development
plan in a manner to promote the conservation of natural environment, more
efficient use of land, and efficiency in the extension of streets and
utilities.
All planned developments shall be located on roads with a minimum
Classification of major arterial. Each area within a Pd project developed
for residential (including open space and recreation), commercial or
industrial land use shall be zoned separately according to the appropriate
zoning district.
( Objectives. To carry out the purpose of this section, a PD district must
provide the following, as appropriate:
(1) A range in the types of residential environment including types of
housing, types of ownership and community facilities available.
(2) Nonresidential land uses, if any, which provide convenient service,
employment an access and yet which are separated from residential areas by
the use of landscaping and natural buffers.
(3) Conservation of natural topographical and geological features with
emphasis upon:
a. Conservation of existing surface and sub-surface water resources;
b. Preservation of major trees and other significant natural environmental
features;
c. Prevention of soil erosion
(4) An efficient network of streets and utilities appropriate to serve the
land uses within the PD district.
(5) A master development plan to guide the PD with specific development
obljective included in restrictive covenants.
(c) Definitions. For the purpose of this section, the following terms shall
have the meaning immediately set forth after the term.
(1) Master development plan. A written and graphic submission for a
planned development which represents a tract of land, proposed subdivision,
the location and bulk of buildings and other structures, density of
development, public and private streets, parking facilities, common open
space, public facilities and all covenants relating to use thereof. The
master development plan is submitted in conjunction with a rezoning
application for the PD district.
(2) Open Space. Land within or related to a development, not individually
owned or dedicated for public use, which is designed and intended for the
common ownership and use by the residents of the developments and may include
complementary structures and improvements as are necessary and appropriate.
(3) Residential land uses. Any variety of residence types as permitted
within respective separately zoned areas of the PD, and as shown on the
approved master development.
(4) Nonresidential land uses. Those designated areas which are not
residential land uses, which includes but is not limited to : commercial or
industrial zoned land, common open space, private streets, drives, service
and parking areas, recreation and other open space areas.
(5) Ownership types. These include all types of residential development
including, but not limited to, single-family, duplex, apartments, townhouses,
rental, such that ownership may be fee simple, leas purchase, leased or
rented, and common ownership of open spaces, recreation facilities, streets
and parking areas.
(6) Net land area. The area calculated in terms of net acres, or the land
devoted to residential, commercial or industrial use exclusive of streets,
rights of way, flood hazard areas and public lands.
(7) Maximum allowable net density. The total number of dwelling units or
housing structures per unit of land based on the net land area.
(8) Planned shopping center. An area within a PD which contains a group of
commercial establishments having a building composition that is an
architectural unit and is not a miscellaneous assemblage of stores; and is
planned, developed, analyzed as a unit, related in location, size and type of
shops to the trade area that the unit serves, and provides on-site parking in
relation to the types and size of stores.
(9) Preliminary concept plan. A preliminary plan of the proposed planned
development, of sufficient accuracy to be used for purpose of reviewing the
proposed land sues and general layout.
(10) Planned industrial district. An area within a PD project designed for
industrial uses with streets, utilities and common architectural controls
regulated by a master development plan and restrictive covenants.
(11) Comprehensive land use plan. The comprehensive long-range plan
containing policies to guide the growth and development of Henry County,
which includes the analysis, recommendations and proposals for the county's
population, economy, housing, transportation, community facilities and land
use.
(12) Professional consultant. The person who is a registered and or
certified engineer, architect or planner who prepared the plan, within the
scope of their respective legal responsibilities.
(d) General Requirements for a Planned Development District:
(1) Area. The minimum area required for a PD district shall be ten (1)
contiguous acres of land. The Planning board may consider projects with less
acreage where the applicant can demonstrate that a smaller parcel will meet
the purpose and objectives of the PD district.
(2) Ownership. The tract of land proposed for PD development shall be in
one (1) ownership, or if in several ownerships, the application for zoning
amendment shall be filed jointly by all of the owners of the properties
included in the plan. Any subsequent change in owners of the properties
involved, or in anyone having a legal or equitable interest in the property,
shall be reported to the community development department. Failure to
provide information on property ownership status shall result in the planning
board and board of commissioners withdrawing approval.
(3) Location of PD district. The Pd district shall be applicable to areas
located on major arterial roads and where public water and sewerage
facilities are available and installed.
(4) Permitted uses:
a. Residential Uses: Residences may be of a variety of housing types and
ownership types. Single-family detached, attached single-family, cluster
homes, two family homes, town houses, and multiple family residential
developments may be permitted within respective separate zoning districts of
the PD.
(1) Residential developments which require R-3, RD or RM zoning districts
shall occupy no more than twenty-five (25) percent of the net land area
developed for residential land use in those classifications. The remainder of
the property shall be other residential, commercial, industrial zoning
classifications and open space.
(2) The maximum allowable net density for single-family residential
development for R-3 detached single-family dwellings and cluster homes shall
be no more than three and six-tenths (3.6) dwellings per acre.
(3) The maximum allowable net density for RD two-family dwellings shall be
two and nine-tenths (2.9) dwellings per acre.
(4) The maximum allowable net density for RM multiple family living units
including apartments and townhouses shall be eight (8) dwelling units per
acre.
(5) Public buildings and recreation facilities for use of the residents of
the PD is permitted. The restrictions as to the use of these facilities
shall be set forth in the covenants and restrictions for the PD development.
b. Office Uses: Office developments shall be designed and landscaped in a
manner which is compatible with residential development and which provides
for through traffic circulation that does not interfere with residential
areas in the PD. Office uses shall include those customarily permitted in an
IO office institutional district.
c. Commercial Uses: Commercial developments shall include those uses in C-
1 or C-2 districts which are part of a planned shopping center or service
center. Commercial development shall be designed and landscaped in a manner
which is compatible with residential development and which provides for
through traffic circulation which does not interfere with residential areas
in the PD. No outside storage or materials or equipment shall be permitted in
commercial areas in a PD.
d. Industrial Uses: Industrial development within a PD shall be designed
and landscaped in a manner which is compatible with residential development.
Industrial areas in a PD shall be designed as an industrial park with
covenants and restrictions concerning building appearance and landscaping.
Any uses permitted within a M-1 District shall be permitted with the
exception of the following:
1. Armories
2. Cold storage, ice plants and freezer lockers.
3. Garage and repair shops.
No outside storage of materials or equipment shall be permitted adjacent to
residential districts in a PD.
(e) Application Procedure:
(1) Preliminary concept plan review. Before an application for rezoning of
a PD is authorized, the applicant shall submit a preliminary concept plan for
review by the community development department. The department shall
coordinate review of the plan and provide a report to the planning
commission. The plan shall be submitted to the planning commission for a
review at a public meeting. The planning commission shall review the plan
and provide comments and recommendations within thirty (3) days. Notice of
the time and place of the public meeting shall be posted on the property and
newspaper advertisement no less than fifteen (15) days prior to the planning
commission meeting.
(a) Required Information: The preliminary concept plan shall include the
following information:
1. Planned development name
2. The owner an developer of the property.
3. Architect, engineer or planner who designed the plan.
4. Location or orientation map of the property.
5. Legal description of the parcel
6. Date, scale, north arrow.
7. Acreage in total tract.
8. Topography at ten-foot contour intervals.
9. Proposed land use and net acreage
10. Proposed street layout.
11. Proposed lot layout.
12. Proposed buffers, open space and natural environmental features such
as surface drainage and open water.
13. General location of proposed buildings to be used for commercial,
industrial, recreational or public facility uses.
(b) Rezoning: Following preliminary concept plan review and approval by
the planning commission, the developer of the PD project may apply for
rezoning pursuant to the requirements of Article XVI of the zoning ordinance,
and master development plan approval.
(2) PD master development plan approval request. A master development plan
which incorporates the comments and modifications made by the planning
commission in its review of the preliminary concept plan shall be submitted
with the application for rezoning.
The master development plan shall include the following information:
a. A site plan for complete development of the planned development project
drawn to a scale of one (1) inch equals fifty (50) feet or one (1) inch
equals one hundred (100) feet. The plan shall include information contained
on the preliminary concept plan and all modifications previously made by the
planning commission. The plan shall include one (1) or more sheets, as
necessary, to accurately show the following information:
1. Property information:
(i) Planned development project name.
(ii) Owner and developer of the property.
(iii) Architect, engineer or planner who designed the plan.
(iv) Date, scale and north arrow.
(v) An area map showing adjacent property owners, zoning classifications
of adjacent parcels, and existing land use within five hundred (500) feet of
the property for the PD project.
(vi) A legal description of the parcel.
2. Existing conditions:
(i) Exising topographical features of the site, with a minimum contour
interval of five (5) feet. The outline of wooded areas and surface drainage
such as streams, lakes and wetlands shall be shown.
(ii) Soil conditions according to U.S. Soil Conservation Service
Classifications for Henry County.
(iii) The location of any flood hazard areas subject to a 100 year flood
according to the Henry County Flood Damage Prevention Ordinance. The
location of the 100 year flood shall be shown relative to contour elevations.
(iv) The location and extent of any aircraft approach zones over the
subject PD property.
(v) The location of any existing property lines within the parcel; the
location, width, right of way, and names of any existing roads: railroads:
utility rights of way or easements; and existing buildings and structures.
(vi) Existing public facilities such as sanitary sewers, water mains,
storm drainage facilities, culverts, bridges, and other underground or above-
ground facilities within the parcel to be developed, or within the rights of
way of roads bordering the parcel, with sizes, grades and invert elevations
from field surveys or other sources.
3. Proposed development conditions:
(i) Phases of the proposed development.
(ii) The location and extent of the proposed interior road system,
including pavement and right of way width.
(iii) Delineation of the proposed residential areas and zoning districts,
including the location of residential land uses, and dwelling unit types,
total number of dwelling units, and total number of lots, and number and
percentage allocation by dwelling unit type.
(iv) Proposed layout and dimensions of lots within each proposed
residential zoning district.
(v) Calculation of residential density in dwelling units per net acres,
by zoning districts and dwelling unit type proposed.
(vi) The delineation of proposed nonresidential areas and zoning
district, including lot layout and dimensions, and general location of proposed
buildings.
(vii) The interior common open space system.
(viii) Proposed dedication or reservation of land for public use, including
streets, parks, schools, and other public buildings and facilities.
(ix) Proposed improvements to existing community facilities including
roads, sewers, drainage and water facilities adjoining or near the site.
b. A written report shall be submitted by the applicant which contains the
following information concerning the master development plan:
1. General description of the proposal.
2. Detailed legal description.
3. Proposed standards for development, including restrictions on the use
of the property, density standards, yard requirements and restrictive
covenants.
4. Proposed dedication or reservation of land for public use, including
streets, easements, parks and school sites.
5. Exceptions or variations form the requirements of the zoning ordinance
and subdivision ordinance, if any, (for) that area being requested.
6. Plans for the provision of utilities , including water, sanitary sewer
and drainage facilities and appropriate calculations regarding the sizing of
drainage areas and pipes.
7. A report from the Henry County Water and Sewerage Authority, or
municipal authority, as appropriate, indicating the adequacy of sanitary
sewer and water services.
8. Plans for the protection of abutting properties.
9. Plans for the maintenance of common open space areas.
10. Tables showing the total number of acres in the proposed development
and the percentage designation for each type of proposed land use, including
public facilities. Information shall be provided in net acres.
11. Tabulations of the overall net density for residential uses.
12. An explanation of phasing or stages of the PD project.
13. Adequacy and arrangement of vehicular traffic access and circulation
including intersections, road widths, channelization structures and traffic
controls.
14. Adequacy and arrangement of pedestrian traffic access and circulation
including separation of pedestrian from vehicular traffic, and pedestrian
convenience.
15. Location, arrangement, appearance and sufficiency of off-street
parking and loading.
16. Location, arrangement, size and placement of buildings, lighting and
signs.
17. Certification by the applicant that a professional consultant is being
utilized in the planning process for the PD project, including preparation of
the application.
18. Planned development projects for which two thousand (2,000) or more
average daily vehicle trips will be generated and/or which at least twenty-
thousand (20,000) gallons per day of sewage treatment plant capacity will be
required must submit with application an environmental impact report. The
report shall follow the format prepared by the community development
department. The report shall objectively discuss positive and negative
impacts of the proposed development on land uses; public water and sewerage
facilities; traffic patterns, volumes and road improvements; storm drainage
facilities, school enrollment; tax base and economic bas, natural vegetation;
wildlife habitat; and, area appearance and aesthetics. The report shall be
prepared by a professional consultant.
(f) Review of Application. In reviewing the application for PD preliminary
development plan approval and zoning approval, the planning board and board
of commissioners shall consider those items listed in section 3-7-313 (Review
of application for amendment) concerning zoning map amendments.
The consideration of a PD District approval or disapproval and master
development plan shall also include, but not be limited to, the following:
(1) Relation to the comprehensive plan;
(2) Adequacy and arrangement of vehicular traffic access and circulation
including intersections, road widths, channelization structures and traffic
controls;
(3) Adequacy and arrangement of pedestrian traffic access and circulation
including separation of pedestrian from vehicular traffic, and pedestrian
convenience;
(4) Location, arrangement, appearance and sufficiency of off-street
parking and loading;
(5) Location, arrangement, size and placement of buildings(s), lighting
and signs;
(6) Arrangement of landscape features and buffer areas;
(7) Adequacy of public water supply;
(8) Adequacy of storm water and sanitary waste disposal facilities; and
(9) Adequacy of structures, roadways, in areas with moderate to high
susceptibility to flooding and ponding and/or erosion.
(Ord. No. 80-23, 12-19-89)
Sec. 3-7-158. FP: flood protection district.
(a) Purpose. Within the land area covered by this chapter, there exists
land which is subject to periodic flooding and inundation. Development of
these lands is regulated by provisions contained in the Federal Insurance
Administration Flood Hazard Boundary Map for Henry County of which is made a
part of the Henry County Zoning Ordinance by reference.
The flood hazard boundary maps (FHBM) and the flood insurance rate maps
(FIRM) for Henry County are also made a part of the Henry County Zoning
Ordinance by reference and shall be used to determine the location and extent
of flood-prone areas.
(b) Permitted Uses. Any use permitted in provisions of the Henry County
Flood Protection..
DEPOSIT RECEIPT AND CONTRACT FOR SALE AND PURCHASE
(CONSUMERS ONLY)
KILLEARN PROPERTIES, INC. of GA, a Georgia corporation whose principal place of
business is 375 Country Club Drive, Stockbridge, Georgia 30281, telephone
number (770) 389-9800, hereinafter called Seller, and FAROOQ AND FARAHAKBAR
whose address is 104 MILL CHASE WAY, WARNER ROBBINS, GA 31088 and telephone
number is 912-329-0089, hereinafter called Buyer agree that Seller shall sell
and Buyer shall buy the following property upon the terms and conditions
hereinafter set forth.
1. COMMUNITY UNIT BLOCK LOT LANDLOT DISTRICT PLATBOOK PAGE
EL 6 FUTURE PHASE
2. METHOD OF PAYMENT:
a) Deposit to KILLEARN PROPERTIES, INC. of GA $5,000
b) Mortgage amount NA
c) Approximate balance to close NA
(excluding Buyer's expenses subject to prorations)
TOTAL PURCHASE PRICE SEE PARAGRAPH 13
3. TIME FOR ACCEPTANCE: If this offer is not executed by Seller and Buyer
prior to 3-3-97 the deposit shall be returned to Buyer and this offer shall be
null and void. The date of this contract shall be the date when the last party
has signed this contract and initialed any corrections.
4. CLOSING AND POSSESSION: This contract shall be closed and the deed
delivered on or before within 7 days of County Recording unless extended by
other provisions of this contract. Possession of the property shall be
delivered to Buyer at closing.
5. EVIDENCE OF TITLE: Seller shall order for delivery to the Buyer, at
Buyer's expense, a title binder to be followed by title insurance issued by
Smith, Welch, and Studdard & Brittain, 1229-B Eagle's Landing Parkway,
Stockbridge, Georgia agreeing to issue Buyer upon recording of the conveyance
hereafter mentioned, an owner's title insurance policy in the amount of the
purchase price mentioned, an owners title insurance policy in the amount of the
purchase price and a mortgagee's title insurance policy in the loan amount (if
any) and any required endorsements, insuring the title to that real property,
subject only to liens, encumbrances, exceptions or qualifications set forth in
this contract and those which shall have reasonable time, not to exceed ninety
days, to clear same at his expense. If any such title defect cannot be cured,
Buyer shall have the option of accepting the title as it then is, or receiving
a refund of the deposit.
DEPOSIT RECEIPT AND CONTRACT FOR SALE AND PURCHASE
(CONSUMERS ONLY)
KILLEARN PROPERTIES, INC. of GA, a Georgia corporation whose principal place of
business is 375 Country Club Drive, Stockbridge, Georgia 30281, telephone
number (770) 389-9800, hereinafter called Seller, and NoelShumann whose address
is P.O. Box 225 Pond Trace, Fayetteville, GA and telephone number is
770-389-6883, hereinafter called Buyer agree that Seller shall sell
and Buyer shall buy the following property upon the terms and conditions
hereinafter set forth.
1. COMMUNITY UNIT BLOCK LOT LANDLOT DISTRICT PLATBOOK PAGE
EL 6 Q 44
2. METHOD OF PAYMENT:
a) Deposit to KILLEARN PROPERTIES, INC. of GA $1,000
b) Mortgage amount NA
c) Approximate balance to close $84,000
(excluding Buyer's expenses subject to prorations)
TOTAL PURCHASE PRICE $85,000
3. TIME FOR ACCEPTANCE: If this offer is not executed by Seller and Buyer
prior to 3-28-97 the deposit shall be returned to Buyer and this offer shall be
null and void. The date of this contract shall be the date when the last party
has signed this contract and initialed any corrections.
4. CLOSING AND POSSESSION: This contract shall be closed and the deed
delivered on or before 5-15-97 unless extended by other provisions of this
contract. Possession of the property shall be delivered to Buyer at closing.
5. EVIDENCE OF TITLE: Seller shall order for delivery to the Buyer, at
Buyer's expense, a title binder to be followed by title insurance issued by
Smith, Welch, and Studdard & Brittain, 1229-B Eagle's Landing Parkway,
Stockbridge, Georgia agreeing to issue Buyer upon recording of the conveyance
hereafter mentioned, an owner's title insurance policy in the amount of the
purchase price mentioned, an owners title insurance policy in the amount of the
purchase price and a mortgagee's title insurance policy in the loan amount (if
any) and any required endorsements, insuring the title to that real property,
subject only to liens, encumbrances, exceptions or qualifications set forth in
this contract and those which shall have reasonable time, not to exceed ninety
days, to clear same at his expense. If any such title defect cannot be cured,
Buyer shall have the option of accepting the title as it then is, or receiving
a refund of the deposit.
DEPOSIT RECEIPT AND CONTRACT FOR SALE AND PURCHASE
(CONSUMERS ONLY)
KILLEARN PROPERTIES, INC. of GA, a Georgia corporation whose principal place of
business is 375 Country Club Drive, Stockbridge, Georgia 30281, telephone
number (770) 389-9800, hereinafter called Seller, and Randy and Jennifer Glass
whose address is 293 Colonial Homes Dr., Atlanta, GA 30309 and telephone
number is 404-609-9180, hereinafter called Buyer agree that Seller shall sell
and Buyer shall buy the following property upon the terms and conditions
hereinafter set forth.
1. COMMUNITY UNIT BLOCK LOT LANDLOT DISTRICT PLATBOOK PAGE
THE ENCLAVE I A 35
2. METHOD OF PAYMENT:
a) Deposit to KILLEARN PROPERTIES, INC. of GA $5,000
b) Mortgage amount NA
c) Approximate balance to close $73,900
(excluding Buyer's expenses subject to prorations)
TOTAL PURCHASE PRICE $78,900
3. TIME FOR ACCEPTANCE: If this offer is not executed by Seller and Buyer
prior to 4-8-97 the deposit shall be returned to Buyer and this offer shall be
null and void. The date of this contract shall be the date when the last party
has signed this contract and initialed any corrections.
4. CLOSING AND POSSESSION: This contract shall be closed and the deed
delivered on or before Upon 7 days after plat is recorded with County. Unless
extended by other provisions of this contract. Possession of the property
shall be delivered to Buyer at closing.
5. EVIDENCE OF TITLE: Seller shall order for delivery to the Buyer, at
Buyer's expense, a title binder to be followed by title insurance issued by
Smith, Welch, and Studdard & Brittain, 1229-B Eagle's Landing Parkway,
Stockbridge, Georgia agreeing to issue Buyer upon recording of the conveyance
hereafter mentioned, an owner's title insurance policy in the amount of the
purchase price mentioned, an owners title insurance policy in the amount of the
purchase price and a mortgagee's title insurance policy in the loan amount (if
any) and any required endorsements, insuring the title to that real property,
subject only to liens, encumbrances, exceptions or qualifications set forth in
this contract and those which shall have reasonable time, not to exceed ninety
days, to clear same at his expense. If any such title defect cannot be cured,
Buyer shall have the option of accepting the title as it then is, or receiving
a refund of the deposit.
DEPOSIT RECEIPT AND CONTRACT FOR SALE AND PURCHASE
(CONSUMERS ONLY)
KILLEARN PROPERTIES, INC. of GA, a Georgia corporation whose principal place of
business is 375 Country Club Drive, Stockbridge, Georgia 30281, telephone
number (770) 389-9800, hereinafter called Seller, and David and Kathleen
Richards whose address is 105 Glen Eagle Way, McDonough, Ga 30253 and
Telephone number is 770-507-1845, hereinafter called Buyer agree that Seller
shall sell and Buyer shall buy the following property upon the terms and
conditions hereinafter set forth.
1. COMMUNITY UNIT BLOCK LOT LANDLOT DISTRICT PLATBOOK PAGE
EL 6 Q 40 18 6
2. METHOD OF PAYMENT:
a) Deposit to KILLEARN PROPERTIES, INC. of GA $1,000
b) Mortgage amount NA
c) Approximate balance to close $88,900
(excluding Buyer's expenses subject to prorations)
TOTAL PURCHASE PRICE $89,900
3. TIME FOR ACCEPTANCE: If this offer is not executed by Seller and Buyer
prior to 4-7-97 the deposit shall be returned to Buyer and this offer shall be
null and void. The date of this contract shall be the date when the last party
has signed this contract and initialed any corrections.
4. CLOSING AND POSSESSION: This contract shall be closed and the deed
delivered on or before Within 30 days of County Recording. Unless
extended by other provisions of this contract. Possession of the property
shall be delivered to Buyer at closing.
5. EVIDENCE OF TITLE: Seller shall order for delivery to the Buyer, at
Buyer's expense, a title binder to be followed by title insurance issued by
Smith, Welch, and Studdard & Brittain, 1229-B Eagle's Landing Parkway,
Stockbridge, Georgia agreeing to issue Buyer upon recording of the conveyance
hereafter mentioned, an owner's title insurance policy in the amount of the
purchase price mentioned, an owners title insurance policy in the amount of the
purchase price and a mortgagee's title insurance policy in the loan amount (if
any) and any required endorsements, insuring the title to that real property,
subject only to liens, encumbrances, exceptions or qualifications set forth in
this contract and those which shall have reasonable time, not to exceed ninety
days, to clear same at his expense. If any such title defect cannot be cured,
Buyer shall have the option of accepting the title as it then is, or receiving
a refund of the deposit.
DEPOSIT RECEIPT AND CONTRACT FOR SALE AND PURCHASE
(CONSUMERS ONLY)
KILLEARN PROPERTIES, INC. of GA, a Georgia corporation whose principal place of
business is 375 Country Club Drive, Stockbridge, Georgia 30281, telephone
number (770) 389-9800, hereinafter called Seller, and Jay and Darlene McLendon
whose address is 708 Deerwood Drive, Stockbridge, GA 30281 and telephone
number is 770-507-9128, hereinafter called Buyer agree that Seller
shall sell and Buyer shall buy the following property upon the terms and
conditions hereinafter set forth.
1. COMMUNITY UNIT BLOCK LOT LANDLOT DISTRICT PLATBOOK PAGE
EL 6 Q 33
2. METHOD OF PAYMENT:
a) Deposit to KILLEARN PROPERTIES, INC. of GA $3,000
b) Mortgage amount NA
c) Approximate balance to close $126,900
(excluding Buyer's expenses subject to prorations)
TOTAL PURCHASE PRICE $129,900
3. TIME FOR ACCEPTANCE: If this offer is not executed by Seller and Buyer
prior to 4-24-97 the deposit shall be returned to Buyer and this offer shall be
null and void. The date of this contract shall be the date when the last party
has signed this contract and initialed any corrections.
4. CLOSING AND POSSESSION: This contract shall be closed and the deed
delivered on or before Within 30 days of the recorded plat. Unless
extended by other provisions of this contract. Possession of the property
shall be delivered to Buyer at closing.
5. EVIDENCE OF TITLE: Seller shall order for delivery to the Buyer, at
Buyer's expense, a title binder to be followed by title insurance issued by
Smith, Welch, and Studdard & Brittain, 1229-B Eagle's Landing Parkway,
Stockbridge, Georgia agreeing to issue Buyer upon recording of the conveyance
hereafter mentioned, an owner's title insurance policy in the amount of the
purchase price mentioned, an owners title insurance policy in the amount of the
purchase price and a mortgagee's title insurance policy in the loan amount (if
any) and any required endorsements, insuring the title to that real property,
subject only to liens, encumbrances, exceptions or qualifications set forth in
this contract and those which shall have reasonable time, not to exceed ninety
days, to clear same at his expense. If any such title defect cannot be cured,
Buyer shall have the option of accepting the title as it then is, or receiving
a refund of the deposit.
DEPOSIT RECEIPT AND CONTRACT FOR SALE AND PURCHASE
(CONSUMERS ONLY)
KILLEARN PROPERTIES, INC. of GA, a Georgia corporation whose principal place of
business is 375 Country Club Drive, Stockbridge, Georgia 30281, telephone
number (770) 389-9800, hereinafter called Seller, and Gilbert and Annabelle
Cisneros whose address is 3531 Fallenleaf Pl, Glendale, CA 91206 and telephone
number is 818-792-2745, hereinafter called Buyer agree that Seller
shall sell and Buyer shall buy the following property upon the terms and
conditions hereinafter set forth.
1. COMMUNITY UNIT BLOCK LOT LANDLOT DISTRICT PLATBOOK PAGE
EL 6 Q 27
2. METHOD OF PAYMENT:
a) Deposit to KILLEARN PROPERTIES, INC. of GA $5,000
b) Mortgage amount NA
c) Approximate balance to close $124,900
(excluding Buyer's expenses subject to prorations)
TOTAL PURCHASE PRICE $129,900
3. TIME FOR ACCEPTANCE: If this offer is not executed by Seller and Buyer
prior to 4-8-97 the deposit shall be returned to Buyer and this offer shall be
null and void. The date of this contract shall be the date when the last party
has signed this contract and initialed any corrections.
4. CLOSING AND POSSESSION: This contract shall be closed and the deed
delivered on or before Upon 7 days of plat being recorded with County. Unless
extended by other provisions of this contract. Possession of the property
shall be delivered to Buyer at closing.
5. EVIDENCE OF TITLE: Seller shall order for delivery to the Buyer, at
Buyer's expense, a title binder to be followed by title insurance issued by
Smith, Welch, and Studdard & Brittain, 1229-B Eagle's Landing Parkway,
Stockbridge, Georgia agreeing to issue Buyer upon recording of the conveyance
hereafter mentioned, an owner's title insurance policy in the amount of the
purchase price mentioned, an owners title insurance policy in the amount of the
purchase price and a mortgagee's title insurance policy in the loan amount (if
any) and any required endorsements, insuring the title to that real property,
subject only to liens, encumbrances, exceptions or qualifications set forth in
this contract and those which shall have reasonable time, not to exceed ninety
days, to clear same at his expense. If any such title defect cannot be cured,
Buyer shall have the option of accepting the title as it then is, or receiving
a refund of the deposit.
DEPOSIT RECEIPT AND CONTRACT FOR SALE AND PURCHASE
(CONSUMERS ONLY)
KILLEARN PROPERTIES, INC. of GA, a Georgia corporation whose principal place of
business is 375 Country Club Drive, Stockbridge, Georgia 30281, telephone
number (770) 389-9800, hereinafter called Seller, and Gilbert and Annabelle
Cisneros whose address is 3531 Fallenleaf Pl, Glendale, CA 91206 and telephone
number is 818-792-2745, hereinafter called Buyer agree that Seller
shall sell and Buyer shall buy the following property upon the terms and
conditions hereinafter set forth.
1. COMMUNITY UNIT BLOCK LOT LANDLOT DISTRICT PLATBOOK PAGE
ENCLAVE 1 A 30
2. METHOD OF PAYMENT:
a) Deposit to KILLEARN PROPERTIES, INC. of GA $5,000
b) Mortgage amount NA
c) Approximate balance to close $73,900
(excluding Buyer's expenses subject to prorations)
TOTAL PURCHASE PRICE $78,900
3. TIME FOR ACCEPTANCE: If this offer is not executed by Seller and Buyer
prior to 4-8-97 the deposit shall be returned to Buyer and this offer shall be
null and void. The date of this contract shall be the date when the last party
has signed this contract and initialed any corrections.
4. CLOSING AND POSSESSION: This contract shall be closed and the deed
delivered on or before Upon 7 days of plat being recorded with County. Unless
extended by other provisions of this contract. Possession of the property
shall be delivered to Buyer at closing.
5. EVIDENCE OF TITLE: Seller shall order for delivery to the Buyer, at
Buyer's expense, a title binder to be followed by title insurance issued by
Smith, Welch, and Studdard & Brittain, 1229-B Eagle's Landing Parkway,
Stockbridge, Georgia agreeing to issue Buyer upon recording of the conveyance
hereafter mentioned, an owner's title insurance policy in the amount of the
purchase price mentioned, an owners title insurance policy in the amount of the
purchase price and a mortgagee's title insurance policy in the loan amount (if
any) and any required endorsements, insuring the title to that real property,
subject only to liens, encumbrances, exceptions or qualifications set forth in
this contract and those which shall have reasonable time, not to exceed ninety
days, to clear same at his expense. If any such title defect cannot be cured,
Buyer shall have the option of accepting the title as it then is, or receiving
a refund of the deposit.
DEPOSIT RECEIPT AND CONTRACT FOR SALE AND PURCHASE
(CONSUMERS ONLY)
KILLEARN PROPERTIES, INC. of GA, a Georgia corporation whose principal place of
business is 375 Country Club Drive, Stockbridge, Georgia 30281, telephone
number (770) 389-9800, hereinafter called Seller, and Claudette Jacobs whose
address is 812 Country Club Drive, North Palm Beach, FL 33408 and telephone
number is 561-626-0611, hereinafter called Buyer agree that Seller
shall sell and Buyer shall buy the following property upon the terms and
conditions hereinafter set forth.
1. COMMUNITY UNIT BLOCK LOT LANDLOT DISTRICT PLATBOOK PAGE
EL 6 Q 36
2. METHOD OF PAYMENT:
a) Deposit to KILLEARN PROPERTIES, INC. of GA $1,000
b) Mortgage amount NA
c) Approximate balance to close $128,900
(excluding Buyer's expenses subject to prorations)
TOTAL PURCHASE PRICE $129,900
3. TIME FOR ACCEPTANCE: If this offer is not executed by Seller and Buyer
prior to 4-28-97 the deposit shall be returned to Buyer and this offer shall be
null and void. The date of this contract shall be the date when the last party
has signed this contract and initialed any corrections.
4. CLOSING AND POSSESSION: This contract shall be closed and the deed
delivered on or before 5-28-97 unless extended by other provisions of this
contract. Possession of the property shall be delivered to Buyer at closing.
5. EVIDENCE OF TITLE: Seller shall order for delivery to the Buyer, at
Buyer's expense, a title binder to be followed by title insurance issued by
Smith, Welch, and Studdard & Brittain, 1229-B Eagle's Landing Parkway,
Stockbridge, Georgia agreeing to issue Buyer upon recording of the conveyance
hereafter mentioned, an owner's title insurance policy in the amount of the
purchase price mentioned, an owners title insurance policy in the amount of the
purchase price and a mortgagee's title insurance policy in the loan amount (if
any) and any required endorsements, insuring the title to that real property,
subject only to liens, encumbrances, exceptions or qualifications set forth in
this contract and those which shall have reasonable time, not to exceed ninety
days, to clear same at his expense. If any such title defect cannot be cured,
Buyer shall have the option of accepting the title as it then is, or receiving
a refund of the deposit.
CERTIFICATION OF THE APPRAISER
I certify that, to the best of my knowledge and belief,
1. The statements of the fact contained in this report are true and correct.
2. The reported analysis, opinion, and conclusions are limited only by the
reported assumptions and limited conditions, and are my personal, unbiased
professional analyses, opinions and conclusions.
3. I have no present or prospective interest in the porperty that is the
subject of this report, and I have no personal interest or bias with respect to
the parties involved.
4. My compensation is not contingent on an action or event resulting from the
analyses, opinions, or conclusions in, or the use of, this report.
5. My analyses, opinions, and conclusions were developed, and this report has
been prepared, in conformity with the requirements of the Code of Professional
Ethics and the Standards of Professional Practice of the American Institute of
Real Estate Appraisers.
6. I am currently certified under the continuing education program of the
State of Georgia Appraisers Board.
7. I have made a personal inspection of the subject property.
8. No one provided significant professional assistance to the person(s)
signing this report, except as noted in the report if applicable.
9. Appraisal is in compliance with the Uniform Standards of Professional
Appraisal Practice.
10. I was not required to report a predetermined value or direction in value
that favors the cause of the client or any related party, the amount of value
estimate, the attainment of a specific result, or the occurance of a subsequent
event in order to receive my compensation.
/s/ John K. Selfe, III #534
JOHN K. SELFE, III
(b 5.) - APPRAISAL OF WINDSONG PHASE VI DATED AS OF AUGUST 15, 1996
PREPARED BY JOHN K. SELFE III
August 15, 1996
Mr. Burt Blackmon RE: Killearn Properties, Inc.
First Community Bank Windsong Plantation Phase VI
McDonough, Georgia Stockbridge, Georgia
Dear Mr. Blackmon:
In response to your request, the undersigned has completed an appraisal of
the captioned property.
Please be informed that a careful and personal inspection was made of this
site and due consideration was given to all factors and forces that
influence property values at the subject location. Based upon the
information that I have gathered and applied to the subject property, and
upon my general experience in the field of real estate appraising, and as
a result of my investigations and findings it is my considered and
professional opinion that the subject property warrants a Market Value as
of this date of:
ONE MILLION SIX HUNDRED FIFTY THOUSAND DOLLARS
($1,650,000)
The attached report is the culmination of careful analysis of the subject
property and the economic factors influencing its market value. The data
reasoning utilized in arriving at this value estimate are also presented
in the attached report.
I thank you for this assignment and if I can be of further service to you
in this or other matters, please do not hesitate to call on me.
Respectfully submitted,
/s/ John K. Selfe III
JOHN K. SELFE,
Quality Appraisal Service, Inc.
BASIC ASSUMPTIONS AND LIMITING CONDITIONS
This appraisal is subject to the following conditions:
1. The legal description/survey furnished is assumed to be correct. No
responsibility is assumed for matters legal in character nor is any
opinion rendered as to the title, which as assumed to be good and
marketable and in fee simple.
2. All existing liens and encumbrances have been disregarded unless
otherwise stated, and the property is appraised as though free and clear
under responsible ownership and competent management.
3. Any proposed or incomplete improvements included in this report are
assumed to be completed in accordance with approved plans and
specifications and in a workmanlike manner.
4. Information furnished by others is believed to be reliable, but no
responsibility is assumed for its accuracy.
5. Any sketches, plats or drawings included in this report are included
to assist the reader in visualizing the property. We have made no survey
of the property, and assume no responsibility in connection with such
matters
6. Unless otherwise noted herein, it is assumed that there are no
encroachments, zoning restrictions, or violations existing in the subject
property
7. We are not required to give testimony or attendance in court by reason
of this appraisal, with reference to the property in question unless
arrangements have been made previously therefor.
8. Disclosure of the contents of this appraisal report is governed by the
Bylaws and Regulations of the National Association of Real Estate
Appraisers.
Therefore, except as hereinafter provided, the party for whom this
appraisal report was prepared may distribute copies of this appraisal
report, in is entirety, to such third parties as may be selected by the
party for whom this appraisal report shall not be given to third parties
without the prior consent of the signatories of this appraisal report.
Further neither all nor any part of this appraisal report shall be
disseminated to the general public by the use of advertising media or
other media for public communication without the prior written consent of
the signatories of this appraisal report.
9. No responsibility is assumed for engineering matters, neither
structural or mechanical. Good structure and mechanical conditions are
assumed to exist, and no opinion as to these matters is to be inferred or
construed from the attached report.
10. The value, estimate applies only to the entire property, and cannot
be prorated to individual portions or fractional interests. Any proration or
division of interest will invalidate the value estimate, unless such
proration or division of interests is set forth in this report.
11. The forecasts or projections included in this report are utilized to
assist in the valuation process. They are based on current market
conditions, current short-term supply and demand factors, and continued
stable economy. These forecasts are, therefore, subject to changes in
future conditions which cannot be accurately predicted by the appraiser,
and these changes could affect the future income and/or value estimates.
12. In this appraisal assignment the existence of potentially hazardous
material such as asbestos, urea formaldehyde foam insulation, radon gas, or
or any other toxic material, has not been considered. The appraiser is
not qualified to detect such substances and, if desired, recommend that
the client retain an expert in this field.
13. It is assumed that all utilities are available to the subject
property, and that no undue expense wi11 be incurred in providing them to
the site.
IDENTIFICATION AND PURPOSE OF THE APPRAISAL, (CONT.)
Highest and Best Use of the Subject Property (cont.)
Appraisal literature breaks down the analysis of highest and best use
into the following four areas:
1.) physically possible uses;
2.) legally permissible uses;
3.) financially feasible uses; and
4.) maximally productive uses.
Site Analysis
In ascerting the highest and best use of a site, it is necessary to study
the four previously mentioned factors. These are physical adaptability of
the site, lagality of use, the marketability of the use, and the most
profitable use. While normally the lagality of use and physical adapt-
ability of a site is readily ascertainable, rarely is the most profit-
able marketable use apparent.
As previously mentioned, the Subject property is zoned RM. Uses
permitted in this District are included in this report. See attached.
This zoning could be described as favorable but somewhat limited in its
utilization.
Physically, all the lots have appropriate access with a minimum of 40
feet of road frontage and are large enough to allow for most uses
under the current zoning. No utility problems can be anticipated.
Out of the possible and permissable uses, the next step is to consider
those used which will produce a positive return to the owner (i.e.
feasible uses). Given the economic growth of the neighborhood, and
the propertys specific location, the subject's highest and best use
is the current zoning Residential ... RM (Planned Development District).
IDENTIFICATION AND PURPOSE OF APPRAISAL (CONT.)
Topography
All lots are considered buildable with average topography and terrain.
Land is considered rolling.
Flood Data
According to FEMA Maps dated November 2, 1983 no portion of subject
is in a flood area. It does not appear that any lots are affected by
water. Flood panel number 130468 0070B. See attached copies of Flood
Map and Survey.
Census Tract
701.03
Purpose and Conditions of Appraisal
The appraisal is made at the request of Mr. Burt Blackmon, First
Community Bank, McDonough, GA, for the purpose of estimating, the market
value of the subject property. The undersigned assumes:
1. there are no adverse easements, encroachments or other conditions
that would adversely affect the marketabililty of this property.
2 that all lots which will have sept3-c tanks are so approved by
county.
3 that the final plat will receive county approval.
In addition, we have not examined any engineering studies done on the
site however, in lieu of any contradicting evidence, it is assumed that
the sites have adequate drainage capabilities and load bearing qualities.
Typical Lot
The typical lot measures 100 feet by 148 feet and has 15,000 s.f.
All lots can be visualized with the plat attached to this report.
IDENTIFICATION AND PURPOSE OF THE APPRAISAL, (CONT.)
Highest and Best Use of the Subject Property
The highest and best use of a site is subject to the dynamics of the
marketplace and thus is not defined in permanent terms but rather is a
concept whereby the utility of a site evolves depending upon the character
of the market as defined by the pulsating parameters of supply and demand.
Thus, as one evaluates a property's highest and best use, one obviously
needs to examine the specific constraints governing present and alternative
uses of the property. The specific time at which the highest and best use is
evaluated recognizes the market forces that ultimately create value.
The American Institute of Real Estate Appraisers in their authoritative
text, The Appraisal of Real Estate, 8th Edition, 1983, defines highest and
best use as follows:
"The reasonable and probable use that supports the highest present
value, as defined, as of the date of the appraisal. Alternatively,
it is said to be the use, from among reasonably probable and legal
alternative uses, found to be physically possible, appropriately
supported, financially feasible, and that results in the highest
present land value.
Obviously, the highest and best use of a property is a determination made
in subjective terms based on the appraiser's judgement and analytical
skills. In layman's terms, the highest and best use is that use
which will yield the owner the greatest potential benefit, generally
interpreted and measured in term of present and future income streams
generated from the subject.
IDENTIFICATION AND PURPOSE OF THE APPRAISAL, (CONT.)
Definition of 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 is the
consummation of a sale as of a specified date and the passing of title
from seller to buyer under conditions whereby:
a. buyer and seller are typically motivated;
b. both parties are well informed or well advised, and each acting
in what he considers his own best interest;
c. a reasonable time is allowed for exposure in the open market;
d. payment is made in terms of cash in U. S. dollars or in terms of
financial arrangements comparable thereto; and
e. 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.
Definition of Highest and Best Use
That reasonable and probable use that will support the highest present
value, as defined, as of the effective date of the appraisal. "(Real Estate
Appraisal Terminology, published by the American Institute of Real Estate
Appraisers and the Society of Real Estate Appraisers, 1975.)
KILLEARN PROPERTIES, INC.
ZONING: M1
600 COUNTRY CLUB DRIVE
STOCKBRIDGE, GA 30281
DEVELOPMENT DATA
WINDSONG PLANTATION UNITS 6 AND 7
1. Subdivider: KILLEARN PROPERTIES, INC.
A. Address: 100 EAGLE'S LANDING WAY, STOCKBRIDGE, GA 30281
B. Telephone Number: (770) 389-2020
2. Property Owner: KILLEARN PROPERTIES, INC.
A. Address: 100 EAGLE'S LANDING WAY, STOCKBRIDGE, GA 30281
B. Telephone Number: (770) 389-2020
3. Surveyor: GREENHORNE & O'MARA, INC.
A. Address: 2110 NEWMARKET PKWY., SUITE 208, MARIETTA, GA 30067
B. Telephone Number: (770) 988-9555
4. Subdivision Configuration:
A. Source of Data: BOUNDARY SURVEY PERFORMED BY G&O, INC.
B. Location: EAGLE'S LANDING, STOCKBRIDGE, GA
C. Total Project Area: 67.7+ ACRES
D. Zoning: RM
E. Type of Subdivision: SINGLE-FAMILY RESIDENTIAL
F. Number of Lots: 134 lots
G. Density: 2 UNITS/ACRES
H. Lot Size: AVERAGE 100' X 150'
I Topographic Source: TOPOGRAPHIC SURVEY BY G&O, INC. AND AERIAL
2' CONTOUR MAPS BY JACK BERRY & ASSOC., INC.
J. Contour Interval: 2 FOOT
K. Datum: NGVD
L. Street Length: 8,200 LF PROPOSED
M. Type of Streets: PUBLIC
N. R/W Width: 50'
O. Pavement Width: 26' B.O.C. TO B.O.C.
P. Street Maintenance: HENRY COUNTY
Q. Building Setbacks: FRONT: 50'
REAR: 40'
SIDE: 10'
SIDE-CORNER: 37.5
R. Minimum Lot Size Permitted: 5,445 SF
S. Minimum Building Size Permitted: 1,150 SF
5. Utilities:
A. Water: HENRY COUNTY WATER AND SEWERAGE AUTHORITY
B. Sanitary Sewer: HENRY COUNTY WATER AND SEWERAGE AUTHORITY
C. Electric: GEORGIA POWER COMPANY
6. Conceptual Stormwater Management Plan:
A. Temporary erosion control plan: SILT FENCE, HAY BALES, AND
GRASS & MULCH
B. Areas to be cleared: STREETS AND UTILITY EASEMENTS.
C. Internal drainage system: INLETS AND PIPE SYSTEM
D. Offsite water: DRAINAGE FROM OFFSITE, IF ANY, WILL BE ROUTED
THROUGH THE PROJECT TO THE CREEK NORTH OF THE PROPERTY.
7. General Notes:
A. ADDITIONAL DRAINAGE OR UTILITY EASEMENTS NOT SHOWN HEREON WILL
BE PROVIDED WHERE NECESSARY IN FINL DESIGN.
IDENTIFICATION AND PURPOSE OF APPRAISAL
Description of Property
The subject property consists of 56 proposed lots in phase VI of
Windsong Plantation at Eagles Landing. The property is located
inside Stockbridge City Limits approximately 2 miles south of
downtown.
Date of Appraisal
August 15, 1996
Legal Description
Land Lot 14 of the 6th Land District, Henry, County, Georgia,
and is part of a survey containing 67.7 acres. The subject lot's
are located on approximately 30 acres.
Property Rights Appraised
Fee Simple Interest
Zoning
The subject property is zoned RM, within a Planned Development
District. This subdivision is also restricted by covenants.
Utilities
The utilities available are as follows: electricity, public water,
telephone, cable television, and sewage. No utility problems can be
anticipated.
Street
Street will be paved with asphalt per code. The subdivision will
have curbs, storm sewers, street lights and underground electricity.
MAJOR EMPLOYERS IN HENRY COUNTY
OVER 500 EMPLOYEES
Henry County Schools 1400
Snapper Power Equipment 856
Henry General Hospital 750
250-499 EMPLOYEES
NEC Technologies 487
Dowling Textile Mftg. Co. 285
Smead Manufacturing Co. 281
Southern States 261
100-249 EMPLOYEES
Georgia Pacific Corporation 112
Hoyne Industries, Inc. 230
50-99 EMPLOYEES
International Paper Co. 92
Simmons Manufacturing Co. 90
Toppan Interamerica, Inc. 75
Costal Chemical Co. 63
Ecolab 60
Faulkner Concrete Pipe Co. 55
Ceramic & Metal Coatings 50
Hospitex/American Supply 50
DIRECT SALES COMPARISON APPROACH TO VAUIE (CONT.)
Ccmparable #4
Subdivision: Lot 22M Windsong
Location: same subdivision
Date of Sale: 4-96
Financing: typical
Number of Lots: one
Total Price: $32,000.00
Average per Lot: $32,000.00
Utilities: elec., water, sewer
Streets: public, paved, curbs, storm sewer
Size: 15,000 square feet
Comments: typical lot
DIRECT SALES COMPARISON APPROACH TO VALUE (CONT.)
Comparable #5
Subdivision: Lots 18J and 32L Windsong
Location: same subdivision
Date of Sale: 3-96
Financing: typical
Number of Lots: one
Total Price: $62,000.00
Average per Lot: $31,000.00
Utilities: elec., water, sewer
Streets: public, paved, curbs, storm sewer
Size: 15,000 square feet
Comments: typical lots
DIRECT SALES COMPARISON APPROACH TO VALUE (CONT.)
Correlation of Values
Comps 1 thru 5 range from $30,500 to $34,000 per lot. From these
sales, a price of $34,000 can be supported. It is common for
lot prices to increase with each phase of a subdivision. The sales
approach to value is as follows:
56 lots at $34,000 each = $1,904,000
Attached: Subject Site and Street Scene
METROPOLITAN ATLANTA OVERVIEW (CONT.)
The 1973 expansion of the Atlanta NSA resulted in a substantial growth
in land area, from 1,728 square miles to 4,236 square miles. This was
an increase of 245%. At the same time the effective buying income
increased only 10.34%. The 1and area was expanded by an additional 806
square miles in 1981 when three counties were added to the present
MSA, increasing the 1and area to 5,042 square miles. As of December 31,
1990, Retail- Sales in the Atlanta MSA were 24.2 billion, and expected to
reach 30 billion by 1995.
To quantify the anticipated growth of the Atlanta Metro Area, consider
that the Georgia Office of Planning and Budget is predicting a
population of 3.1 million by the year 2010. Georgia's population is
expected to reach almost 8 million by the year 2010, a 2.9 million
increase in a period of three decades. By comparison, there was only
a two million increase over the past 40 years.
Finance
Atlanta is the heart of finance in the southeast region. In addition
to being the headquarters location of the Sixth District Federal
Reserve Bank, Atlanta has approximately 75 banks with more than 400
branches and total resources of 8.8 bi11ion. Metropolitan Atlanta
ranks ninth in the nation in bank clearings. There are 21 savings
and loan associations with home offices in the region. Additionally,
there are several foreign financial institutions located in Atlanta
including, Barclays Bank International, Ltd., Swiss Credit Bank, and
the French Banking Corporation.
(Attached Area Map)
METROPOLITAN ATLANTA OVERVIEW
The City of Atlanta is considered the financial, communication, and
transportation center of the southeastern region of the United
States. Atlanta serves as the seat of the Fulton County government and
as the capital city of the State of Georgia. Atlanta has consistently
had one of the stronger economies in the United States, attributable
largely to its strategic location, diversified economic base and lack
of physical and geographic barriers.
The Atlanta Metropolitan Statistical Area (MSA) was enlarged from 15 to
18 counties in the 1980 population census. As of December 31, 1980, the
population of the 15 county MSA was about 2,064,200 the 18th largest in
the nation. Since that time, the three additional counties, Coweta,
Barrow and Spalding, have MSA population increases of 110,200 persons
for a total 1980 MSA population of 2,174,000. By December 31, 1990 the
population in the 18 county area had increased to 2,914,000.
The Atlanta MSA was first enlarged in 1973 from 5 to 15 counties,
making long-term analysis of population trends difficult. At year
end 1974 (the first full year after the expansion) the total Metro
population was 1,791,400. The net growth between 1974 and 1980 was
272,800 persons or 15.2%...The population in this region is expected to
increase to 3,334,OOO by the year 1995, which represents a growth of
14.4% from December 1990.
METROPOLITAN ATLANTA OVERVIEW (CONT.)
Employment
The Atlanta MSA, had a non-agricultural employment force of 1,513,200
as of July, 1994. In the five year period from December 1985 to
December, 1990, the total non-agricultural employment of the Atlanta
Metro Area increased by 185,380 persons; this represents an increase
of about 15% over the five year period.
The employment mix has remained fairly stable and well-diversified.
A breakdown by employment group for the 18 county Atlanta MSA as of
April, 1994, was:
NON-AGRICULTURAL EMPLOYMENT BY INDUSTRY
INDUSTRY # EMPLOYED % of TOTAL EMPLOYED
Mining 1,000 0%
Construction 55,900 4%
Retail Trade 268,800 17%
Wholesale Trade 136,700 9%
Transportation 139,9OO 9%
Services 378,300 26%
Manufacturing 184,100 12%
Government 23O,8OO 16%
Real Estate 117,900 7%
Totals 1,513,200 100%
The current unemployment rate for the Atlanta MSA is 4.3% ( down from
4.9% in July, 1991), which is lower than the State of Georgia's 5.4%,
and the U.S. average of 5.8%.
METROPOLITAN ATLANTA OVERVIEW (CONT.)
An evidence of Atlanta' s emergence from a regional city to a national
trade and business center, most of the fortune 500 top industrial firms
in the nation have operations in Atlanta. Additionally, over twenty
companies have chosen to located their national and/or international
headquarters in Atlanta including the following firms .......
Coca Cola International, Coca Cola Enterprises, Georgia Gulf, Georgia
Pacific, Goldkist, National Service Industries, Oxford Industries,
Scientific Atlanta, Equifax, Genuine Parts, Turner Broadcasting, Delta
Air Lines, Holiday Inn, Colonial Pipeline, United Parcel Services, Bank
South-Wachovia, SunTrust Bank, Home Depot, Bell South, Southern
Company, and Oglethorpe Power.
Some of the large manufacturing employers in this region include
General Motors, Lockheed of Georgia, Western Electric - AT&T, Ford
Motor Company, and Atlantic Steel. This widely diverse manufacturing
base accounts for about 12% of the Atlanta area's total employment.
After gaining 21,300 jobs in 1993,'the area has been forecated as
adding 39,000 jobs in 1995.
METROPOLITAN ATLANTA OVERVIEW (CONT.)
Industrial Market
The Atlanta Industrial Market contains approximately 233 million square
feet of warehouse and 14 million square feet of business space. In
addition, approximately 42 million square feet of distribution space
and 3 million square feet of business service space is vacant.
Industrial absorption was down from 534,000 square feet in 1991
to 378,000 square feet in the second quarter of 1994.
Several major reasons for Metro Atlanta's appeal as an industrial
location include: moderate climate; large, comparatively inexpensive
labor force; low energy cost; abundant water resources; and the city's
extensive public transportation facilities.
Housing
The number of housing units in the Atlanta Region grew approximately
46% during the 1980's. Of the tota1 housing units, 7.8% were vacant in
1990, compared with 8.0% in 1989 and 6.3% in 1980. The average
household in the area was 2.61 in 1990, showing a decline of 4.7%
from 2.7% in 1980.
In early 1994 the average apartment rented for $555. Average occupancy
levels for the entire metro area ranged from 82% to 85%, down
approximately 4% from late 1992. Rents increased only slightly during
1992, generally less than 1% and approximately 20 apartment foreclosures
per month due mainly to low occupancies and lower than expected rents.
However, the trend is upward due to apartment permits being down.
METROPOLITAN ATLANTA OVERVIEW (CONT.)
The median house value in 1990 was $89,277 in the Atlanta MSA. The
median contract rent in 1990 was $441, with 68.2% of the units renting
between $350 and $749.
Office Market
The Atlanta office market was reported to have 84.1 million square feet
existing as of December, 1991, with 19.3% overall vacancy. The office
market absorbed 2.3 million square feet in 1991. There are 3.3 million
square feet of office space under construction with 69% pre-leased.
Carter & Associates reported that the approximate rental rates per
square feet quoted were: $17.65 in all existing buildings, $20.58 in
class A buildings, and $27 in buildings under construction; however,
average rental rates decreased approximately $1.28 per square foot
during the last twelve months.
The office market forecast for 1994 includes a total of 89 million
square feet of office space, approximately 20% vacant, an average
rental rate of $18.00, and net absorption of 1.9 million square feet,
the most since 1992.
Transportation and Communication
Atlanta is a transportation hub, with a busy international airport, an
inner city rapid transit rail system, and an expansive highway system.
Approximately 90% of the U.S. population is within three hours flying
time from Hartsfield International Airport. Atlanta is considered to
have an excellent transportation network.
METROPOLITAN ATLANTA OVERVIEW (CONT.)
Convention Center
Another pertinent factor should be noted regarding the economic base
of Atlanta. The city is rapidly becoming known as one of the nations
most important convention centers, ranking fourth nationally in annual
delegate attendance. In the ten year period from 1980 to 1990, the
number of conventioneers meeting in Atlanta has almost doubled
increasing from one million to 1.9 million. The construction of the
Georgia World Congress Center and 12 major hotels since 1973 has
allowed this expansion. The World Congress Center, a trade show and
convention facility, houses the largest single-level exhibition hall in
the world at 650,000 square feet, which was expanded to 952,000 square
feet in 1992. It contains 70 meeting rooms, a 2,000 seat auditorium
(with simultaneous language-translating services), and a 33,000 square
feet ballroom. The center was expanded in 1992 to a total of 2.1 million
square feet.
Government
The local government of the City of Atlanta consists of a mayor and an
aldermanic board, both having reasonably good relationships with the
local business community. The majority of involved parties has the
common goal of gaining for Atlanta the reputation as an international
city. As stated earlier, Atlanta serves not only as the Fulton County
Government seat, but as the Capital City of the State of Georgia. The
city is also the regional headquarters for various federal agencies.
METROPOLITAN ATLANTA OVERVIEW (CONT.)
Summarv
In summary, the basic forces which influence real estate values are
currently considered to be favorable and in reasonable harmony. These
forces may be segregated into the following categories: population,
economic, governmental, and social. The preceding paragraphs have
addressed the more important elements within each category,
specifically as they relate to the influences on real property values
in the Atlanta Region. During the late 1980s and early 1990s, the
national as well as the local economies experienced recessionary
characteristics. However, based partially on current increases in
occupancy levels and consumer spending, we believe the economy is
beginning to show signs of recovery. It is concluded that in general
these forces are currently combining to afford this area a very
positive outlook with regard to anticipated levels of demand for
local real estate. Having been chosen as the site of the 1994 National
Football League Championship "Superbowl" and the 1996 International
Summer 0lympic Games, local business leaders project positive short-
term impact on construction and the apartment market, in addition to a
long term positive impact of the perception of Atlanta as an
international city. Because of the anticipated continued growth in
demand, the potential for the likelihood of increasing real estate
values in the Altanta area and in the subject vicinity is good.
HENRY COUNTY OVERVIEW
Henry County has recently become the fastest growing county in the Metro
Atlanta area. Located just south of downtown Atlanta and bisected by
Interstate 75, the population has increased by over 50% in the last
ten years.
During the last two decades, north Henry County, including Stockbridge has
witnessed unimaginable growth. North Henry is, by far, the residential
and retail center of the county. The population has more than doubled
since 1970.
Central Henry County, including the county seat of McDonough, has also
experienced growth. About 37% of the county's population is located
in central Henry County.
Hampton and Locust Grove are the holdouts. The growth in these two areas
has been very slight. Currently, these two towns are expected to be the
last in the county to develop. However, the proposed Outer Perimeter
Highway and the proposed second Atlanta Airport could have significant
impact on their development.
Henry County has a young, relatively uneducated population. The median
age is just over 30 with a median house-hold income of $40,208. For the
year 1989, 95% of the potential workforce was employed.
Henry County has been fortunate to receive its share of industrial
development. Japan-based NEC Technologies got the ball rolling in 1985
when they announced plans to build their first plant in Georgia. They
have been followed by BellSouth Services, Carbonic Industries, Ecolab,
Toppan Interamerica, Disco, and more recently, Pep Boys, Nestle, and Ford
Motor Company Parts Distribution.
Henry County has been very fortunate over the last ten years. Henry
County has planned and managed our remarkable growth. The balanced growth
between residential, industrial and retail is expected to make Henry
County the Crown Jewel of the Southern Crescent for the next20 years.
HENRY COUNTY DEMOGRAPHIC DATA
POPULATION 1980 CURRENT
36,309 59,300
AVERAGE HOUSEHOLD INCOME $20,644 $40,208
AVERAGE PER CAPITA EBI $10,101 $16,187
TOTAL RETAIL SALES $116,937,000 $248,125,000
(Attached Map of Eagle's Landing Master Plan)
HENRY COUNTY
Known as the "Mother of Counties," Henry County was split up to form
several adjoining counties, including Fulton,, Dekalb and Clayton. Named
after Patric Henry, the county was ceded by the Creek Indians in the
Treaty of 1821. McDonough, the county seat was incorporated in 1823.
Stockbridge began as a settlement in 1829. Locust Grove was named for a
grove of flowering locust trees and incorporated in 1893. Hampton was
named for a Confederate war hero and has a number of historical houses and
the Atlanta International Raceway.
As one of Georgia's fastest growing counties, Henry County is
strategically located on the southeastern side of Atlanta where 675 and 75
connect. Henry County, originally a cotton-growing county, was devastated
during the Civil War. Rebuilding, the county concentrated on
diversification and became independent of cotton and is now home to many
industries and offices including a major Federal Aviation Administration
Facility. With quick interstate access, Henry County has developed into a
bedroom community for Atlanta.
Henry County has become a popular location with Hollywood directors.
Movies like "Glory" and "Murder in Mississippi" were filmed in Henry
County.
Henry County's Atlanta Motor Speedway holds the record for the largest
attendance (92,000+) at a one day, paid sporting event.
Henry County's Eagles Landing Country Club is host to the LPGA golf
tournament.
MILEAGE METER
(from mid-country)
Atlanta Motor Speedway 8 miles
Cyclorama 27 miles
Disney World 450 miles
Downtown Atlanta 29 miles
Fulton County Stadium 22 miles
Hartsfield International Airport 19 miles
Interstate 20 26 miles
Interstate 285 19 miles
Interstate 675 8 miles
Six Flags Over Georgia 39 miles
Southlake Mall 14 miles
Stone Mountain 42 miles
Zoo Atlanta 27 miles
APPROACHES TO VALUE
The Cost Approach to Value is based on the theory that the value of a
property is the sum of the value of the land plus the reproduction
cost of all the improvements, less depreciation from all causes.
The Income Approach to Value is based on the theory that the present
value of a property is equal to the present value of its future
capacity to produce income including the proceeds of a sale at a
future date.
The most readily accepted method of valuing vacant sites is the
Direct Sales Comparison Approach to Value. This approach involves
the analysis of sales of competitive properties . A comparison is made
between the appraised property and the comparable sales which have
sold within a reasonably close time frame. The essence of the Direct
Sales Comparison Approach to Value is to discover what competitive
properties have sold for in order to determine the market value
indication of the appraised property. From the data a pattern
generally emerges to indicate a value for the subject.
Due to the nature of the subject property it is necessary to combine the
income and sale comparison approach. The sales comparison approach is
used to establish a value for each lot. The absorption rate determines
at what rate the lots will sell (income stream). The income approach
is then used to establish the present value of the sales (income stream).
Neighborhood Data
The subject property is located in the Northern sector of Henry
County. The neighborhood be defined as being bound by
Jodeco Road to the south, the City of Stockbridge to the North,
State Highway 42 to the East and Interstate 75 to the West. This area
is suburban, with 65% single family residences, 5% commercial, 5% multi,
and 25% vacant. The growth rate for this area is steady with some
increases in property values. The supply/demand seems to be in
balance. Marketing time is considered to be four to six months with
average market appeal. Overall Henry County is one of the fastest
growing counties in Metro Atlanta and should be able to absorb all the
subject properties within 1.00 year.
The Eagles Landing Development is one of the nicest and most successful
developments in Henry County and the State of Georgia. Homes are
valued from 150 thousand to l.3 million. The Golf Course will be
hosting an LPGA Tour event this summer.
Windsong price range is $135,000 to $280,000. The total development
will have 423 lots situated on 235.76 acres. By the time phase VI
is completed, all other phases should be sold out.
Windsong Lot Sales
Over the past nine months Windsong Plantation has sold 40 lots.
This is and absorption rate of 4.44 lots per month. Since Windsong
was first developed every phase has experienced an absorption rate of
between 4 to 6 lots per month. Windsong has consistently been at the
top of Henry County in lot and home sales. Windsong has also had
a large number of resales which has not slowed development. The first
four months of 1996 Windsong sold 27 lots. Considering the past and
the forecasted explosion of Henry County, phase VI should experience an
and absorption rate of 5 lots per month. Sell-out period is as follows:
56 lots
56 lots / 5 lots per month = 11.2 months sellout
say
ONE YEAR SELLOUT PERIOD
COMPARABLE SITE SALES
Sale No. 1
Location: Jodeco Road, 3 miles southwest
Grantor: Claude E. Corbin
Grantee: Jerry Steele
Date of Sale: August 1994
Lot Size: 24.804 acres
Sales Price: $452,400
Zoning: RM
Reference: DB 1943 PG 87
Comments: This property is an equal location. RM zoning is
more favorable.
Sale No. 2
Location: Walt Stephens Road, 4 miles west
Grantor: Lassiter Properties
Grantee:. Breckenridge Properties
Date of Sale: June 1993
Lot Size: 150.88 acres
Sales Price: $982,700
Zoning: Residential
Reference: Deed Records
Comments: Location is considered equal.
COMPARABLE SITE SALES (CONT.)
Sale No. 3
Location: Jodeco Road, 2 Miles west
Grantor: Hiram E. Cook
Grantee: ECS Development Corp
Date of Sale: November 1992
Lot Size: 48.13 acres
Sales Price: $280,000
Zoning: R2
Reference: Deed Records
Comments: This property location is considered equal.
Sale No. 4
Location: Eagles Landing Parkway
Grantor: Killearn Properties
Grantee: Eagles Landing Village Associates
Date of Sale: September 1994
Lot Size: 12.43 acres
Sales Price: $967,000
Zoning: RM
Reference: DB 1956 PG 134
Comments: Comp several lots on golf course with very high
land value. $45,000 typical lots.
Comparable site sales range from $5,800 to $77,795 per acre. Taking
into consideration the size of all comparables is the most similar to
subject and was given the most weight. The subjects price per acre is
established at $18,000 per acre or $540,000.
COST APPROACH TO VALUE (CONT.)
Costs: 3198 lineal feet of streets
Engineering and Surveying $ 22,800
Land Value $ 540,000
Clearing and Grading $ 35,400
Storm Drainage $ 29,500
Water $ 44,250
Sewer $ 110,654
Curbing $ 29,500
Paving $ 56,050
Club House and Pool N/AOO
Landscaping and Sign N/A
Contingencies $ 100,000
Overhead and Profit and 28% $271,083
Cost Estimate say $1,239,237
These figures for this cost estimate were taken from the figures
supplied by the developer and from the undersigns professional
experience of appraising other similar developments. In the final
reconciliation all emphasis was given the Sales Comparison Approach
which was intergrated with the Income Approach. This approach is
considered much more reliable when dealing with this type development.
DIRECT SALES COMPARISON APPROACH TO VALUE
A comparable analysis has been made of properties thought to be
generally under similar influences. Our analysis of these sales has
utilized the price per lot unit of comparison. The features
influencing the value of a site such as the subject include general
location, size, road frontage, availability of utilities, topography,
zoning, and time of sale.
The comparable sales are located in Henry county and are considered to
be under similar influences as the subject. All sales are situated
within two miles of the subject and are vacant residential lots in
subdivisions. Comparables are as follows:
Camparable # 1
Subdivision: Lots 16L and 18L Windsong
Location: same subdivision
Date of Sale: 4-96
Financing: typical
Number of Lots: two
Total Price: $61,000.00
Average per Lot: $30,500.00
Utilties: elec., water, sewer
Streets: public, paved, curbs, storm sewer
Size: approximately 15,000 square feet each
Comments: Typical lots
DIRECT SALES COMPARISON APPROACH TO VALUE (CONT.)
Comparable # 2
Subdivision: Lot 39L Windsong
Location: same subdivision
Date of Sale: 4-96
Financing: typical
Number of Lots: one
Total Price: $34,000
Average per Lot: $34,000
Utilities: elec., water, sewer
Streets: public, paved, curbs, storm sewer
Size: approximately 15,000 square feet
Comments: typical lot
DIRECT SALES COMPARISON APPROACH TO VALUE (CONT.)
Comparable # 3
Subdivision: Lots 21M and 34L Windsong
Location: same subdivision
Date of Sale: 4-96
Financing: typical
Number of Lots: two
Total Price: $66,000
Average per Lot: $33,000
Utilities: elec., water, sewer
Streets: public, paved, curbs, storm sewer
Size: approximately 15,000 square feet each
Comments: typical lots
FINAL RECONCILIATION OR INCOME APPROACH
Cash Sellout
Having derived the retail lot prices and projected absorption (5 lots per
month), the next step is to determine deductions from the gross retail
proceeds. These deductions include marketing costs, holding costs
(taxes), and entrepreneurial or investor's profit. Marketing costs
include sales commissions and advertising. We have projected this
category at 5% of gross sales. With a development of this size, the
holding costs are $125 per lot, per year. Entrepreneurial profit
represents the return required to induce an investor to undertake the
risk associated with acquiring the unsold lots and marketing lots
over the projected sellout period. Our research indicates that typical
investors by the lots to make money on the improvements not the lots.
Profit is not deducted in this market.
Deducting the marketing costs, holding costs, and investors profit
results in periodic net revenues. To arrive at a value indication,
these periodic net revenues must be discounted to present value. The
discount rate selected should reflect the risk incurred by the investor
during the sellout period. The discount rate can be viewed as the sum
of the rate earned on a "safe" investment such as a treasury bill or
certificate of deposit, plus a premium to account for risk. Currently,
treasury bills and certificates of deposit yeild between 3% and 6%. As
there is some economic uncertainty at present, we have considered a 4%
risk premium appropriate, yeilding a range of between 7% & 10%. We have
concluded that a 9% rate reasonable reflects the market for the
subject property. The discount rate has been applied on a future value
basis. That is the net present value of the future proceeds.
FINAL RECONCILIATION (CONT.)
We have projected a sellout period of 1.00 years which is an asorption
rate of 5 lots per month.
From the Direct Sales Comparison Approach we have established a value
of $34,000 for each of the 56 lots in phase VI.
56 Lots: $34,000 x 56 = $1,904,000
gross proceeds = $1,904,000
Expenses And Profit:
sales commission/marketing expense @ 5% x lot values $ 95,200
taxes @ $125 per lot x 57 x lst year sell out $ 7,000
Gross Receipts $1,904,000
-$ 95,200
-$ 7,000
Value $1,801,800
The market should be able to absorb all 56 lots in 1.00 years. The
discount rate is 9% for a 1.00 year period. The present value of the
proposed lots is $1,652,294. Value was figured on an annual
time frame. We estimate the 56 lot phase VI of Windsong to have a
present value of:
$1,650,000
ONE MILLION SIX HUNDERD FIFTY THOUSAND DOLLARS
ZONING
(5) Minimum rear yard 40 feet
(6) Maximum height 75 feet
Sec. 3-7-157 . PD: planned development district.
(a) Purpose. It is the purpose of the planned development district
to encourage the development of compatible land used within the frame
work of a master development plan for residential and nonresidential
land used within an environmentally compatible setting. The PD district
is designed to be appended to residential, commercial or industrial
zoning districts to provide flexibility in the application of development
standards and site design when approved according to a master development
plan in a manner to promote the conservation of natural environment, more
efficient use of land, and efficiency in the extension of streets and
utilities.
All planned developments shall be located on roads with a minimum
Classification of major arterial. Each area within a Pd project developed
for residential (including open space and recreation), commercial or
industrial land use shall be zoned separately according to the appropriate
zoning district.
( Objectives. To carry out the purpose of this section, a PD district must
provide the following, as appropriate:
(1) A range in the types of residential environment including types of
housing, types of ownership and community facilities available.
(2) Nonresidential land uses, if any, which provide convenient service,
employment an access and yet which are separated from residential areas by
the use of landscaping and natural buffers.
(3) Conservation of natural topographical and geological features with
emphasis upon:
a. Conservation of existing surface and sub-surface water resources;
b. Preservation of major trees and other significant natural environmental
features;
c. Prevention of soil erosion
(4) An efficient network of streets and utilities appropriate to serve the
land uses within the PD district.
(5) A master development plan to guide the PD with specific development
obljective included in restrictive covenants.
(c) Definitions. For the purpose of this section, the following terms shall
have the meaning immediately set forth after the term.
(1) Master development plan. A written and graphic submission for a
planned development which represents a tract of land, proposed subdivision,
the location and bulk of buildings and other structures, density of
development, public and private streets, parking facilities, common open
space, public facilities and all covenants relating to use thereof. The
master development plan is submitted in conjunction with a rezoning
application for the PD district.
(2) Open Space. Land within or related to a development, not individually
owned or dedicated for public use, which is designed and intended for the
common ownership and use by the residents of the developments and may include
complementary structures and improvements as are necessary and appropriate.
(3) Residential land uses. Any variety of residence types as permitted
within respective separately zoned areas of the PD, and as shown on the
approved master development.
(4) Nonresidential land uses. Those designated areas which are not
residential land uses, which includes but is not limited to : commercial or
industrial zoned land, common open space, private streets, drives, service
and parking areas, recreation and other open space areas.
(5) Ownership types. These include all types of residential development
including, but not limited to, single-family, duplex, apartments, townhouses,
rental, such that ownership may be fee simple, leas purchase, leased or
rented, and common ownership of open spaces, recreation facilities, streets
and parking areas.
(6) Net land area. The area calculated in terms of net acres, or the land
devoted to residential, commercial or industrial use exclusive of streets,
rights of way, flood hazard areas and public lands.
(7) Maximum allowable net density. The total number of dwelling units or
housing structures per unit of land based on the net land area.
(8) Planned shopping center. An area within a PD which contains a group of
commercial establishments having a building composition that is an
architectural unit and is not a miscellaneous assemblage of stores; and is
planned, developed, analyzed as a unit, related in location, size and type of
shops to the trade area that the unit serves, and provides on-site parking in
relation to the types and size of stores.
(9) Preliminary concept plan. A preliminary plan of the proposed planned
development, of sufficient accuracy to be used for purpose of reviewing the
proposed land sues and general layout.
(10) Planned industrial district. An area within a PD project designed for
industrial uses with streets, utilities and common architectural controls
regulated by a master development plan and restrictive covenants.
(11) Comprehensive land use plan. The comprehensive long-range plan
containing policies to guide the growth and development of Henry County,
which includes the analysis, recommendations and proposals for the county's
population, economy, housing, transportation, community facilities and land
use.
(12) Professional consultant. The person who is a registered and or
certified engineer, architect or planner who prepared the plan, within the
scope of their respective legal responsibilities.
(d) General Requirements for a Planned Development District:
(1) Area. The minimum area required for a PD district shall be ten (1)
contiguous acres of land. The Planning board may consider projects with less
acreage where the applicant can demonstrate that a smaller parcel will meet
the purpose and objectives of the PD district.
(2) Ownership. The tract of land proposed for PD development shall be in
one (1) ownership, or if in several ownerships, the application for zoning
amendment shall be filed jointly by all of the owners of the properties
included in the plan. Any subsequent change in owners of the properties
involved, or in anyone having a legal or equitable interest in the property,
shall be reported to the community development department. Failure to
provide information on property ownership status shall result in the planning
board and board of commissioners withdrawing approval.
(3) Location of PD district. The Pd district shall be applicable to areas
located on major arterial roads and where public water and sewerage
facilities are available and installed.
(4) Permitted uses:
a. Residential Uses: Residences may be of a variety of housing types and
ownership types. Single-family detached, attached single-family, cluster
homes, two family homes, town houses, and multiple family residential
developments may be permitted within respective separate zoning districts of
the PD.
(1) Residential developments which require R-3, RD or RM zoning districts
shall occupy no more than twenty-five (25) percent of the net land area
developed for residential land use in those classifications. The remainder of
the property shall be other residential, commercial, industrial zoning
classifications and open space.
(2) The maximum allowable net density for single-family residential
development for R-3 detached single-family dwellings and cluster homes shall
be no more than three and six-tenths (3.6) dwellings per acre.
(3) The maximum allowable net density for RD two-family dwellings shall be
two and nine-tenths (2.9) dwellings per acre.
(4) The maximum allowable net density for RM multiple family living units
including apartments and townhouses shall be eight (8) dwelling units per
acre.
(5) Public buildings and recreation facilities for use of the residents of
the PD is permitted. The restrictions as to the use of these facilities
shall be set forth in the covenants and restrictions for the PD development.
b. Office Uses: Office developments shall be designed and landscaped in a
manner which is compatible with residential development and which provides
for through traffic circulation that does not interfere with residential
areas in the PD. Office uses shall include those customarily permitted in an
IO office institutional district.
c. Commercial Uses: Commercial developments shall include those uses in C-
1 or C-2 districts which are part of a planned shopping center or service
center. Commercial development shall be designed and landscaped in a manner
which is compatible with residential development and which provides for
through traffic circulation which does not interfere with residential areas
in the PD. No outside storage or materials or equipment shall be permitted in
commercial areas in a PD.
d. Industrial Uses: Industrial development within a PD shall be designed
and landscaped in a manner which is compatible with residential development.
Industrial areas in a PD shall be designed as an industrial park with
covenants and restrictions concerning building appearance and landscaping.
Any uses permitted within a M-1 District shall be permitted with the
exception of the following:
1. Armories
2. Cold storage, ice plants and freezer lockers.
3. Garage and repair shops.
No outside storage of materials or equipment shall be permitted adjacent to
residential districts in a PD.
(e) Application Procedure:
(1) Preliminary concept plan review. Before an application for rezoning of
a PD is authorized, the applicant shall submit a preliminary concept plan for
review by the community development department. The department shall
coordinate review of the plan and provide a report to the planning
commission. The plan shall be submitted to the planning commission for a
review at a public meeting. The planning commission shall review the plan
and provide comments and recommendations within thirty (3) days. Notice of
the time and place of the public meeting shall be posted on the property and
newspaper advertisement no less than fifteen (15) days prior to the planning
commission meeting.
(a) Required Information: The preliminary concept plan shall include the
following information:
1. Planned development name
2. The owner an developer of the property.
3. Architect, engineer or planner who designed the plan.
4. Location or orientation map of the property.
5. Legal description of the parcel
6. Date, scale, north arrow.
7. Acreage in total tract.
8. Topography at ten-foot contour intervals.
9. Proposed land use and net acreage
10. Proposed street layout.
11. Proposed lot layout.
12. Proposed buffers, open space and natural environmental features such
as surface drainage and open water.
13. General location of proposed buildings to be used for commercial,
industrial, recreational or public facility uses.
(b) Rezoning: Following preliminary concept plan review and approval by
the planning commission, the developer of the PD project may apply for
rezoning pursuant to the requirements of Article XVI of the zoning ordinance,
and master development plan approval.
(2) PD master development plan approval request. A master development plan
which incorporates the comments and modifications made by the planning
commission in its review of the preliminary concept plan shall be submitted
with the application for rezoning.
The master development plan shall include the following information:
a. A site plan for complete development of the planned development project
drawn to a scale of one (1) inch equals fifty (50) feet or one (1) inch
equals one hundred (100) feet. The plan shall include information contained
on the preliminary concept plan and all modifications previously made by the
planning commission. The plan shall include one (1) or more sheets, as
necessary, to accurately show the following information:
1. Property information:
(i) Planned development project name.
(ii) Owner and developer of the property.
(iii) Architect, engineer or planner who designed the plan.
(iv) Date, scale and north arrow.
(v) An area map showing adjacent property owners, zoning classifications
of adjacent parcels, and existing land use within five hundred (500) feet of
the property for the PD project.
(vi) A legal description of the parcel.
2. Existing conditions:
(i) Exising topographical features of the site, with a minimum contour
interval of five (5) feet. The outline of wooded areas and surface drainage
such as streams, lakes and wetlands shall be shown.
(ii) Soil conditions according to U.S. Soil Conservation Service
Classifications for Henry County.
(iii) The location of any flood hazard areas subject to a 100 year flood
according to the Henry County Flood Damage Prevention Ordinance. The
location of the 100 year flood shall be shown relative to contour elevations.
(iv) The location and extent of any aircraft approach zones over the
subject PD property.
(v) The location of any existing property lines within the parcel; the
location, width, right of way, and names of any existing roads: railroads:
utility rights of way or easements; and existing buildings and structures.
(vi) Existing public facilities such as sanitary sewers, water mains,
storm drainage facilities, culverts, bridges, and other underground or above-
ground facilities within the parcel to be developed, or within the rights of
way of roads bordering the parcel, with sizes, grades and invert elevations
from field surveys or other sources.
3. Proposed development conditions:
(i) Phases of the proposed development.
(ii) The location and extent of the proposed interior road system,
including pavement and right of way width.
(iii) Delineation of the proposed residential areas and zoning districts,
including the location of residential land uses, and dwelling unit types,
total number of dwelling units, and total number of lots, and number and
percentage allocation by dwelling unit type.
(iv) Proposed layout and dimensions of lots within each proposed
residential zoning district.
(v) Calculation of residential density in dwelling units per net acres,
by zoning districts and dwelling unit type proposed.
(vi) The delineation of proposed nonresidential areas and zoning
district, including lot layout and dimensions, and general location of
proposed buildings.
(vii) The interior common open space system.
(viii) Proposed dedication or reservation of land for public use, including
streets, parks, schools, and other public buildings and facilities.
(ix) Proposed improvements to existing community facilities including
roads, sewers, drainage and water facilities adjoining or near the site.
b. A written report shall be submitted by the applicant which contains the
following information concerning the master development plan:
1. General description of the proposal.
2. Detailed legal description.
3. Proposed standards for development, including restrictions on the use
of the property, density standards, yard requirements and restrictive
covenants.
4. Proposed dedication or reservation of land for public use, including
streets, easements, parks and school sites.
5. Exceptions or variations form the requirements of the zoning ordinance
and subdivision ordinance, if any, (for) that area being requested.
6. Plans for the provision of utilities , including water, sanitary sewer
and drainage facilities and appropriate calculations regarding the sizing of
drainage areas and pipes.
7. A report from the Henry County Water and Sewerage Authority, or
municipal authority, as appropriate, indicating the adequacy of sanitary
sewer and water services.
8. Plans for the protection of abutting properties.
9. Plans for the maintenance of common open space areas.
10. Tables showing the total number of acres in the proposed development
and the percentage designation for each type of proposed land use, including
public facilities. Information shall be provided in net acres.
11. Tabulations of the overall net density for residential uses.
12. An explanation of phasing or stages of the PD project.
13. Adequacy and arrangement of vehicular traffic access and circulation
including intersections, road widths, channelization structures and traffic
controls.
14. Adequacy and arrangement of pedestrian traffic access and circulation
including separation of pedestrian from vehicular traffic, and pedestrian
convenience.
15. Location, arrangement, appearance and sufficiency of off-street
parking and loading.
16. Location, arrangement, size and placement of buildings, lighting and
signs.
17. Certification by the applicant that a professional consultant is being
utilized in the planning process for the PD project, including preparation of
the application.
18. Planned development projects for which two thousand (2,000) or more
average daily vehicle trips will be generated and/or which at least twenty-
thousand (20,000) gallons per day of sewage treatment plant capacity will be
required must submit with application an environmental impact report. The
report shall follow the format prepared by the community development
department. The report shall objectively discuss positive and negative
impacts of the proposed development on land uses; public water and sewerage
facilities; traffic patterns, volumes and road improvements; storm drainage
facilities, school enrollment; tax base and economic bas, natural vegetation;
wildlife habitat; and, area appearance and aesthetics. The report shall be
prepared by a professional consultant.
(f) Review of Application. In reviewing the application for PD preliminary
development plan approval and zoning approval, the planning board and board
of commissioners shall consider those items listed in section 3-7-313 (Review
of application for amendment) concerning zoning map amendments.
The consideration of a PD District approval or disapproval and master
development plan shall also include, but not be limited to, the following:
(1) Relation to the comprehensive plan;
(2) Adequacy and arrangement of vehicular traffic access and circulation
including intersections, road widths, channelization structures and traffic
controls;
(3) Adequacy and arrangement of pedestrian traffic access and circulation
including separation of pedestrian from vehicular traffic, and pedestrian
convenience;
(4) Location, arrangement, appearance and sufficiency of off-street
parking and loading;
(5) Location, arrangement, size and placement of buildings(s), lighting
and signs;
(6) Arrangement of landscape features and buffer areas;
(7) Adequacy of public water supply;
(8) Adequacy of storm water and sanitary waste disposal facilities; and
(9) Adequacy of structures, roadways, in areas with moderate to high
susceptibility to flooding and ponding and/or erosion.
(Ord. No. 80-23, 12-19-89)
Sec. 3-7-158. FP: flood protection district.
(a) Purpose. Within the land area covered by this chapter, there exists
land which is subject to periodic flooding and inundation. Development of
these lands is regulated by provisions contained in the Federal Insurance
Administration Flood Hazard Boundary Map for Henry County of which is made a
part of the Henry County Zoning Ordinance by reference.
The flood hazard boundary maps (FHBM) and the flood insurance rate maps
(FIRM) for Henry County are also made a part of the Henry County Zoning
Ordinance by reference and shall be used to determine the location and extent
of flood-prone areas.
(b) Permitted Uses. Any use permitted in provisions of the Henry County
Flood Protection..
(ATTACHED, ZONING MAP)
(b 6.) - APPRAISAL OF PARKSIDE PHASE III DATED AS OF APRIL 3, 1996
PREPARED BY JOHN K. SELFE III
April 3, 1996
Mr. Burt Blackmon RE: Killearn Properties, Inc.
First Community Bank Parkside Phase III
McDonough, Georgia Stockbridge, Georgia
Dear Mr. Blackmon:
In response to your request, the undersigned has completed an appraisal of
the captioned property.
Please be informed that a careful and personal inspection was made of this
site and due consideration was given to all factors and forces that influence
property values at the subject location. Based upon the information that I
have gathered and applied to the subject property, and upon my general
experience in the field of real estate appraising, and as a result of my
investigations and findings it is my considered and professional opinion that
the subject property warrants a Market Value as
of this date of:
ONE MILLION ONE HUNDRED FIFTY THOUSAND DOLLARS
($1,150,000)
The attached report is the culmination of careful analysis of the subject
property and the economic factors influencing its Market Value. The data
reasoning utilized in arriving at this value estimate are also presented
in the attached report.
I thank you for this assignment and if I can be of further service to you
in this or other matters, please do not hesitate to call on me.
Respectfully submitted,
/s/ John K. Selfe, III
JOHN K. SELFE, III
BASIC ASSUMPTIONS AND LIMITING CONDITIONS
This appraisal is subject to the following conditions:
1. The legal description/survey furnished is assumed to be correct. No
responsibility is assumed for matters legal in character nor is any opinion
rendered as to the title, which is assumed to be good and marketable and in
fee simple.
2. All existing liens and encumbrances have been disregarded unless
otherwise stated, and the property is appraised as though free and clear
under responsible ownership and competent management
3. Any proposed or incomplete improvements included in this report are assumed
to be completed in accordance wath approved plans and specifications and in a
workmanlike manner.
4. Information furnished by others is believed to be reliable, but no
responsibility is assumed for its accuracy.
5. Any sketches, plats or drawings included in this report are included to
assist the reader in visualizing the property. We have made no survey of the
property, and assume no responsibility in connection with such matters
6. Unless otherwise noted herein, it is assumed that there are no
encroachments, zoning restrictions, or violations existing in the subject
property.
7. We are not required to give testimony or attendance in court by reason
of this appraisal, with reference to the property in question unless
arrangements have been made previously therefor.
8. Disclosure of the contents of this appraisal report is governed by. the
Bylaws and Regulations of the National Association of Real Estate
Appraisers.
Therefore, except as hereinafter provided, the party for whom this appraisal
report was prepared may distribute copies of this appraisal report, in is
entirety, to such third part3.es as nay be selected by the party for whom this
appraisal report shal1 not be given to third parties without the prior consent
of the signatories of this appraisal report. Further neither all nor any part
of this appraisal report shall be disseminated to the general public by the use
of advertising media or other media for public communication without the prior
written consent of the signatories of this appraisal report.
9. No responsibility is assumed for engineering matters, neither structural or
mechanical. Good structure and mechanical conditions are assumed to exist, and
no opinion as to these matters is to be inferred or construed from the attached
report.
10. The value estimte applies only to the entire property, and. cannot be
prorated to individual portions or fractional interests. Any proration or
division of interest will invalidate the value estimate, unless such
proration or division of interests is set forth in this report.
11. The forecasts or projections included in this report are utilized to
assist in the valuation process. They are based on current market
conditions, current short-term supply and demand factors,, and continued
stable economy. These forecasts are, therefore, subject to changes in
future conditions which cannot be accurately predicted by the appraiser,
and these changes could affect the future income and/or value estimates.
12. In this appraisal assignment the existence of potentially hazardous
material such as asbestos, urea formaldehyde foam isolation, radon gas,
or any other toxic material, has not been considered. The appraiser is
not qualified to detect such substances and, if desired, recommend that
the client retain an expert in this field.
13. It is assumed that all utilities are available to the subject
property, and that no undue expense wi11 be incurred in providing them to
the site.
PICTURE SUBJECT SITE
PICTURE SUBJECT SITE STREET
MAP PLAT OF UNIT ONE
IDENTIFICATION AND PURPOSE OF APPRAISAL
Description of Property
The subject property consists of 64 proposed lots in phase III of
Parkside. The property is located Approximately 2 miles south
of Stockbridge and is part of the Eagles Landing Development.
Subdivision is located approximately 2 miles east of Interstate 75.
Date of Appraisal
April 1, 1996
Legal Description
Land Lot 1 of the 7 District and Land Lot 1 of the 11 District, Henry
County, Georgia, containing 21.97 acres.
Property Rights Appraised
Fee Simple Interest
Zoning
The subject property is zoned RM , within a Planned Development
District. This subdivision is also restricted by covenants.
Utilities
The utilities available are as follows: electricity, public water,
telephone, cable television, and sewage. No utility problems can be
anticipated.
Street
Street will be paved with asphalt per code. The subdivision wi11
have curbs, storm sewers, street lights and underground electricity.
IDENTIFICATION AND PURPOSE OF THE APPRAISAL, (CONT.)
Definition of 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 is the
consummation of a sale as of a specified date and the passing of title
from seller to buyer under conditions whereby:
a. buyer and sel1 er are typically motivated;
b. both parties are well informed or well advised, and each acting
in what he considers his own best interest;
C. a reasonable time is allowed for exposure in the open market;
d. payment is made in terms of cash in U.S. dollars or in terms of
financial arrangements comparable thereto; and
e. 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.
Definition of Highest and Best Use
"That reasonable and probable use that will support the highest present
value, as defined, as of the effective date of the appraisal."
(Real Estate Appraisal Terminology, published by the American Institute
of Real Estate Appraisers and the Society of Real Estate Appraisers,1975.)
IDENTIFICATION AND PURPOSE OF THE APPRAISAL, (CONT.)
Highest and Best Use of the Subject Property
The highest and best use of a site is subject to the dynamics of the
marketplace and thus is not defined in permanent terms but rather is a
concept whereby the utility of a site evolves depending upon the character
of the market as defined by the pulsating parameters of supply and demand.
Thus, as one evaluates a property's highest and best use, one obviously
needs to examine the specific constraints governing present and alternative
uses of the property. The specific time at which the highest and best use is
evaluated recognizes the market forces that ultimately create value.
The American Institute of Real Estate Appraisers in their authoritative text,
The Amraisal of Real Estate, 8th Edition, 1983, defines highest and best use as
follows:
"The reasonable and probable use that supports the highest present
value, as defined, as of the date of the appraisal. Alternatively,
it is said to be the use, from among reasonably probable and legal
alternative uses, found to be physically possible, appropriately
supported, financially feasible, and that results in the highest
present land value.
Obiviously, the highest and best use of a property is a determination made
in subjective terms based on the appraiser's judgement and analytical
skills. In layman's terms, the highest and best use is that use
which will yield the owner the greatest potential benefit, generally
interpreted and measured an terms of present and future income streams
generated from the subject.
IDENTIFICATION AND PURPOSE OF THE APPRAISAL, (CONT.)
Hiqhest and Best Use of the Subject Property, (cont.)
Appraisal literature breaks down the analysis of highest and best use
into the following four areas:
1.) physically possible uses;
2.) legally permissible uses;
3.) financially feasible uses; and
4.) maximally productive uses.
Site Analysis
In ascertaining the highest and best use of a site, it is necessary to study
the four previously mentioned factors. These are physical adaptability of the
site, legality of use, the marketability of the use, and the most profitable
use. While normally the legality of use and physical adaptability of a site is
readily ascertainable, rarely is the most profitable marketable use apparent.
As previously mentioned, the Subject property is zoned RM. Uses permitted in
this District are included in this report. See attached.
This zoning could be described as favorable but somewhat limited in its
Utilization.
Physically, all the lots have appropriate access with a minimum of 70
feet of road frontage and are large enough to allow for most uses
under the current zoning. No utility problems can be anticipated.
Out of the possible and permissable uses, the next step is to consider
those used which will produce a positive return to the owner (i.e.
feasible uses) . Given the economic growth of the neighborhood, and
the propertys specific location, the subject's highest and best use
is the current zoning (Planned Development District).
DESCRIPTION OF LOTS
There will be 64 total lots in Phase III. Blocks and numbers are as
follows.
Block D, Lots 14 thru 36
Block E, Lots 2 thru 18, and lots 20 thru 43
It is assumed that all lots when developed will meet county guidelines.
The subdivision will have curbs, storm sewers, underground electricity,
and street lights.
The other amenities for Parkside include, clubhouse, swimming pool,
playground, and nature trail.
The homes in Parkside range from $120,000 to $165,000. They are
considered semi-custom homes with good functional utility. Exterior
maintenance and upkeep is considered good. Location is considered very
good. Overall, the lots and improvements are very marketable and
should experience a high absorption rate. The railroad is
effecting the second phase but should not effect the subject lots.
MAP AREA MAP
METROPOLITAN ATLANTA OVERVIEW
The City of Atlanta is considered the financial, communication, and
transportation center of the southeastern region of the United States. Atlanta
serves as the seat of the Fulton County government and as the capital city of
the State of Georgia. Atlanta has consistently had one of the stronger
economies in the United States, attributable largely to its strategic location,
diversified economic base, and lack of physical and geographic barriers.
The Atlanta Metropolitan Statistical Area (MSA) was enlarged from 15 to 18
counties in the 1980 population census. As of December 31, 1980, the
population of the 15 county MSA was about 2,064,200 the 18th largest in the
nation. Since that tine, the three additional counties, Coweta, Barrow and
Spalding, have MSA population increases of 110,200 persons for a total 1980 MSA
population of 2,174,000. By December 31, 1990 the population in the 18 county
area had increased to 2,914,000.
The Atlanta MSA was first enlarged in 1973 from 5 to 15 counties, making long
term analysis of population trends difficult. At year end 1974 (the first full
year after the expansion) the total Metro population was 1,791,400. The net
growth between 1974 and 1980 was 272,800 persons or 15.2%. The population in
this region is expected to increase to 3,334,000 by the year 1995, which
represents a growth of 14.4% from December 1990.
Employment
The Atlanta MSA had a non-agricultural employment force of 1,513,200 as of
July, 1994. In the five year period from December 1985 to December 1990, the
total non-agricultural employment of the Atlanta Metro Area increased by
185,380 persons; this represents an increase of about 15% over the five year
period.
The employment mix has remained fairly stable and well-diversified. A
breakdown by employment group for the 18 county Atlanta MSA as of
April, 1994, was:
NON-AGRICULTURAL EMPLOYMENT BY INDUSTRY
IMUSTRY #EMPLOYED % of TOTAL EMPLOYED
Mining 1,000 0%
Construction 55,900 4%
Retail Trade 268,800 17%
Wholesale Trade 136,700 9%
Transportation 139,900 9%
Services 378,300 26%
Manufacturing 184,100 12%
Government 230,800 16%
Real Estate 117,900 7%
Totals 1,513,200 100%
The current unemployment rate for the Atlanta MSA is 4.3% (down from 4.9% in
July, 1991), which is lower than the State of Georgia's 5.4%, and the U.S.
average of 5.8%.
METROPOLITAN ATLANTA OVERVIEW (CONT.)
An evidence of Atlanta's emergence from a regional city to a national
trade and business center, most of the fortune 500 top industrial firms
in the nation have operations in Atlanta. Additionally, over twenty
companies have chosen to located their national and/or international
headquarters in Atlanta including the following firms:
Coca Cola International, Coca Cola Enterprises, Georgia Gulf, Georgia Pacific,
Goldkist, National Service Industries, Cxford Industries, Scientific Atlanta,
Equifax, Genuine Parts, Turner Broadcasting, Delta Air Lines, Holiday Inn,
Colonial Pipeline, United Parcel Services, Bank South-Wachovia, Suffrust Bank,
Home Depot, Bell South, Southern Company, and Oglethorpe Power.
Some of the large manufacturing employers in this region include General
Motors, Lockheed of Georgia, Western Electric - AT&T, Ford Motor Company, and
Atlantic Steel. This widely diverse manufacturing base accounts for about 12%
of the Atlanta area's total employment. After gaining 21,300 jobs in 1993, the
area has been forecated as adding 39,000 jobs in 1995.
METROPOLITAN ATLANTA OVERVIEW (CONT.)
Convention Center
Another pertinent factor should be noted regarding the economic base of
Atlanta. The city is rapidly becoming known as one of the nations most
important convention centers, ranking fourth nationally in annual delegate
attendance. In the ten year period from 1980 to 1990, the number of
conventioneers meeting in Atlanta has almost doubled increasing from one
million to 1.9 million. The construction of the Georgia World Congress Center
and 12 major hotels since 1973 has allowed this expansion. The World Congress
Center, a trade show and convention facility, houses the largest single-level
exhibition hall in the world at 650,000 square feet, which was expanded to
952,000 square feet in 1992. It contains 70 meeting rooms, a 2,000 seat
auditorium (with simultaneous language-translating services), and a 33,000
square feet ballroom. The center was expanded in 1992 to a total of 2.1
million square feet.
Government
The local government of the City of Atlanta consists of a mayor and an
aldermanic board, both having reasonably good relationships with the local
business community. The majority of involved parties has the common goal of
gaining for Atlanta the reputation as an international city. As stated
earlier, Atlanta serves not only as the Fulton County Government seat, but as
the Capital City of the State of Georgia. The city is also the regional
headquarters for various federal agencies.
METROPOLITAN ATLANTA OVERVIEW (CONT.)
Summary
In summary, the basic forces which influence real estate values are currently
considered to be favorable and in reasonable harmony. These forces may be
separated into the following categories: population, economic, governmental,
and social. The preceding paragraphs have addressed the more important
elements within each category, specifically as they relate to the influences
on real property values in the Atlanta Region. During the late 1980s and early
1990s, the national as well as the local economies experienced recessionary
characteristics. However, based partially on current increases in occupancy
levels and consumer spending, we believe the economy is beginning to show signs
of recovery. It is concluded that in general these forces are currently
combining to afford this area a very positive outlook with regard to
anticipated levels of demand for local real estate. Having hosted the 1994
National Football League Championship "Superbowl" and the 1996 International
Summer Olympic Games, the local economy has experienced short and long-term
positive impact. The impact has reached almost every facit of the local
economy and the perception of Altanta as an international city. Because of the
anticipated continued growth in demand, the potential for the likelihood of
increasing real estate values in the Altanta area and in the subject vicinity
is good.
HENRY COUNTY OVEWIEW
Henry County has recently become the fastest growing county in the Metro
Atlanta area. Located just south of downtown Atlanta and bisected by
Interstate 75, the population has increased by over 50% in the last ten years.
During the last two decades, north Henry County, including Stockbridge has
witnessed unimaginable growth. North Henry is, by far, the residential and
retail center of the county. The population has more than doubled since 1970.
Central- Henry County, including the county seat of McDonough, has also
experienced growth. About 37% of the county's population is located in central
Henry County.
Hampton and Locust Grove are the holdouts. The growth in these two areas has
been very slight. Currently, these two towns are expected to be the last in
the county to develop. However, the proposed Outer Perimeter Highway and the
proposed second Atlanta Airport could have significant impact on their
development.
Henry County has a young, relatively well-educated population. The median age
is just over 30 with a median house-hold income of $40,208. For the year 1989,
95% Of the potential workforce was employed.
Henry County has been fortunate to receive its share of industrial
Development. Japan-based NEC Technologies got the ball rolling in 1985 when
they announced plans to build their first plant in Georgia. They have been
followed by BellSouth Services, Carbonic Industries, Ecolab, Toppan
Interamerica, Disco, and more recently, Pep Boys, Nestle, and Ford Motor
Company Parts Distribution.
Henry County has been very fortunate over the last ten years. Henry County has
Planned and managed our remarkable growth. The balanced growth between
residential, industrial and retail is expected to make Henry County the Crown
Jewel of the Southern crescent for the next 20 years.
HENRY COUNTY DEMOGRAPHIC DATA
1980 CURRENT
POPULATION 36,309 59,300
AVERAGE HOUSEHOLD INCOME $20,644 $40,208
AVERAGE PER CAPITA EBI $10,101 $16,187
TOTAL RETAIL SALES $116,937,000 $248,125,000
MAJOR EMPLOYERS IN HENRY COUNTY
OVER 500 EMPLOYEES
Henry County Schools 1400
Snapper Power Equipment 856
Henry General Hospital 750
250-499 EMPLOYEES
NEC Technologies 487
Dowling Textile Mftg. Co. 285
Smead Manufacturing Co. 281
Southern States 261
100-249 EMPLOYEES
Georgia Pacific Corporation 112
Hoyne Industries, Inc. 230
50-99 EMPLOYEES
International Paper Co. 92
Siumns Manufacturing Co. 90
Toppan InterAmerica, Inc. 75
Costal Chemical Co. 63
Ecolab 60
Faulkner Concrete Pipe co. 55
Ceramic & Metal Coatings 50
Hospitex/American Supply 50
HENRY COUNTY
Known as the "Mother of Counties," Henry County was split up to form several
adjoining counties, including Fulton, Dekalb and Clayton. Named after Patrick
Henry, the county was ceded by the Creek Indians in the Treaty of 1821.
McDonough, the county seat was incorporated in 1823. Stockbridge began as a
settlement in 1829. Locust Grove was named for a grove of flowering locust
trees and incorporated in 1893. Hampton was named for a Confederate war hero
and has a number of historical- houses and the Atlanta International Raceway.
As one of Georgia's fastest growing counties, Henry County is
strategically located on the southeastern side of Atlanta where 675 and 75
connect. Henry County, originally a cotton-growing county, was devastated
during the Civil War. Rebuilding, the county concentrated on diversification
and became independent of cotton and is now home to many industries and
offices, including a major Federal Aviation Administration Facility. With
quick interstate access, Henry County has developed into a bedroom community
for Atlanta.
Henry County has become a popular location with Hollywood directors. Movies
like "Glory" and "Murder in Mississippi" were filmed in Henry County.
Henry County's Atlanta Motor Speedway holds the record for the largest
attendance (92,000+) at a one day, paid sporting event.
Henry County's Eagles Landing Country Club is host to the LPGA golf
tournament.
MILEAGE METER
(from mid-county)
Atlanta Motor Speedway 8 miles
Cyclorama 27 miles
Disney World 450 miles
Downtown Atlanta 29 miles
Fulton County Stadium 22 miles
Hartsfield International Airport 19 miles
Interstate 20 26 miles
Interstate 285 19 miles
Interstate 675 8 miles
Six Flags Over Georgia 39 miles
Southlake Mall 14 miles
Stone Mountain 42 miles
Zoo Atlanta 27 miles
MAP HENRY COUNTY
Neighborhood Data
The subject property is located in the Northern sector of Henry
County. The neighborhood could roughly be defined as being bound by
Jodeco Road to the South, the City Of Stockbridge to the North,
State Highway 42 to the East and Interstate 75 to the West. This area
is suburban, with 65% single family residences, 5% commercial, 5% Multi,
and 25% vacant. The growth rate for this area is steady with some
increases in property values. The supply/demand seems to be in
balance. Marketing time is considered to be four to six months with
average market appeal. Overall Henry County is one of the fastest
growing counties in Metro Atlanta and should be able to absorb all the
subject prcperties within 2.5 years. ( this includes existing lots
The Eagles Landing Development is one of the nicest and most successful
developments in Henry County and the State of Gerogia. Homes are
valued from 150 thousand to 1.3 million. The Golf Course will be
hosting an LPGA Tour event this summer.
Parkside price range will is $90,000 to $140,000. There are two similar
developments, with comparable priced houses within 4 miles of subject.
They are, St. Andrews and The Vineyards. These two developments have
sold 52 and 73 units respectively during the past year. Killearn Properties
is also the developer of Windsong, with houses ranging from $135,000 to
$210,000. This development has sold 44 units during the same time frame.
It is the opinion of the undersigns that based on these facts and taking into
consideration the price range of the units in Parkside that the market will
absorb 3.5 units per month. Phase I of Parkside has sold 59 lots in five
months.
Neiqhborhood Data
Parkside sold 2.1 lots per month from January 1995 thru January 1996.
The property was under poor management over this period. Up until
January 1995, Parkside had averaged over four lots per month. Killearn
Properties has put the subdivision under new management. Since
February 1996, Parkside has sold eight lots and has seven more under
contract. This is an absorption rate of five lots per month when April
is included. Considering all data, an absorption rate of 3.5 lots per
month is appropriate.
APPROACHES TO VALUE
The Cost Approach to Value is based on the theory that the value of a
property is the sum of the value of the land plus the reproduction
cost of all the improvements, less depreciation from all causes.
The Income Approach to Value is based on the theory that the present
value of a property is equal to the present value of its future
capacity to produce income including the proceeds of a sale at a
future date.
The most readily accepted method of valuing vacant sites is the
Direct Sales Comparison Approach to Value. This approach involves
the analysis of sales of competitive properties. A comparison is made
between the appraised property and the comparable sales which have
sold within a reasonably close time frame. The essence of the Direct
Sales Comparison Approach to Value is to discover what competitive
properties have sold for in order to determine the market value
indication of the appraised property. From the data a pattern
generally emerges to indicate a value for the subject.
Due to the nature of the subject property it is necessary to combine the
income and sale comparison approach. The sales comparison approach is
used to establish a value for each lot. The absorption rate determines
at what rate the lots will sell (income stream). The income approach
is then used to establish the present value of the sales (income stream).
COMPARABLE SITE SALES
Sale No. 1
Location: Hollaway Road
Grantor: Killearn Properties
Grantee: Steele
Date of Sale: March 1994
Lot Size: 18.832 acres
Sales Price: $296,200
Zoning: RM with a single family residence variance.
Reference: Deed Book 1845 Page 105
Comments: Location is considered equal. Comparable is zoned
RM. $15,728 per acre in a small tract. Has sewage.
Sale No. 2
Location: Jodeco Road
Grantor: Killearn Properties
Grantee: Cameron
Date of Sale: August 1994
Lot Size: 33.44 acres
Sales Price: $501,600
Zoning: RM with a single family residence variance.
Reference: Deed Book 1935 Page 328
Comments: This is a sale of the subject. Comparable is zoned
RM. $15,000 per acre with sewage.
COMPARABLE SITE SALES (CONT.)
Sale No. 3
Location: Corner of Jodeco Road and McCurry Road
Grantor: Corbin
Grantee: Steele
Date of Sale: October 1994
Lot Size: 24.804 acres
Sales Price: $452,4OO
Zoning: RM with a single family residence variance.
Reference: Deed Book 1943 Page 87
Comments: Loccation is considered superior. Comparable is zoned
RM. .$18,238 per acre. One corner lot was available
for commercial use. Has sewage.
COMPARABLE SITE SALES (CONT.)
Sale No. 4
Location:.. Brannan Road
Grantor: Clark
Grantee: Henry County Board of Education
Date of Sale: January 1995
Lot Size: 30.706 acres
Sales Price: $307,100
Zoning: RA: residential-agricultural
Reference: Deed Book 2021 Page 38
Comments: Location is considered equal. Comparable is zoned
RA. $10,001 per acre with sewage.
Comparable site sales range from $10,001 to $18,238 per acre. Taking
into consideration the size of all comparables is the most similar to
subject and was given the most weight. The subjects price per acre is
established at $15,000 per acre or $329,550.
COST APPROACH TO VALUE
Definition of Cost Approach to Value
In this process, the land value is estimated separately through a market
comparison. The properties which were chosen for comparison and adjustment to
the Subject site are considered to be under similar environmental and
economic influences. The details of these "comparable" site sales are listed
in a preceding section of this report. The value estimate by the Cost
Approach is then arrived at by adding the estimated land value to the
depreciated value of the improvements.
The rationale of this approach is that the replacement of cost new plus land
value represents the upper limit of value.
Deduction of depreciation from all causes, if properly estimated, should
reflect market value.
Depreciation
Depreciation of the subject improvements is an important factor in the Cost
Approach to Value. It has been defined by the American Institute of Real
Estate Appraisers in its Appraisal Terminology Handbook as follows:
Depreciation...An effect caused by deterioration and/or obsolenscence.
Deterioration is evidenced by wear and tear, decay, dry rot, cracks,
encrustations,or structural defects. Obsolescence is divisible into two
parts, functional and economic. Functional obsolescence is the adverse effect on
value resulting from defects in design and impaired utility. It can also be
caused by changes over the years that havemade some aspect of the structural,
material, or design obsolete by current standards. Functional obsolescence
may be due to poor plan, mechanical inadequacy or superadequacy, functional
inadequacy or superadequacy due to size, age, or other. It is evidenced by
conditions within the property. Economic obsolescence is caused by factors
external to the property, such as inharmonious property uses. It is caused
by adverse factors which result in some degree of market rejection. The
extent of this item is the extent of the loss in market value.
COST APPROACH TO VALUE (CONT.)
Costs:
Engineering and Surveying $ 51,100
Land Value $329,550
Clearing and Grading $ 39,895
Storm Drainage $ 63,090
Water $ 55,803
Sewer $l40,831
Curbing $ 30,353
Paving $ 68,700
Club House and Pool $100,000
Landscaping and Sign n/a
Contingencies $ 90,000
Cost Estimate say $ 968,322
These figures for this cost estimate were taken from the figures
supplied by the developer and from the undersigns professional
experience of appraising other similar developments. In the final
reconciliation all emphasis was given the sales Comparison Approach
which was integrated With the Income Approach. This approach is
considered much more reliable when dealing with this type development.
DIRECT SALES COMPARISON APPROACH TO VALUE
A comparable analysis has been made of properties thought to be
generally under similar influences. Our analysis of these sales has
utilized the price per lot unit of comparison. The features
influencing the value of a site such as the subject include general
location, size, road frontage, availability of utilities, topography,
zoning,, and time of sale.
The comparable sales are located in Henry County and are considered to
be under similar influences as the subject. All sales are situated
within two miles of the subject and are vacant residential lots in
subdivisions. Comparables are as follows:
Comparable # 1
Subdivision: Lot 8F Parkside
Location: . same subdivision
Date of Sale: March 1996
Financing: typical
Number of lots: one
Total Price: $22,500.00
Average per Lot: $22,500.00,
Utilities: elec., water, sewer
Streets: public, paved, curbs, storm sewer
Size: approximately 10,000 square feet each
Comments: Typical lots
DIRECT SALES COMPARISON APPROACH TO VALUE (CONT.)
Comparable # 2
Subdivision: Lot 17F Parkside
Location: . same subdivision
Date of Sale: March 1996
Financing: typical
Number of lots: one
Total Price: $22,500.00
Average per Lot: $22,500.00,
Utilities: elec., water, sewer
Streets: public, paved, curbs, storm sewer
Size: approximately 11,000 square feet
Comments: Typical lot
DIRECT SALES COMPARISON APPROACH TO VALUE (CONT.)
Comparable # 3
Subdivision: Lot 3F Parkside
Location: . same subdivision
Date of Sale: March 1996
Financing: typical
Number of lots: one
Total Price: $22,500.00
Average per Lot: $22,500.00,
Utilities: elec., water, sewer
Streets: public, paved, curbs, storm sewer
Size: approximately 10,000 square feet
Comments: Typical lot
DIRECT SALES COMPARISON APPROACH TO VALUE (CONT.)
Comparable # 4
Subdivision: Lot 19F Parkside
Location: . same subdivision
Date of Sale: March 1996
Financing: typical
Number of lots: one
Total Price: $24,000.00
Average per Lot: $24,000.00,
Utilities: elec., water, sewer
Streets: public, paved, curbs, storm sewer
Size: 12,000 square feet
Comments: Typical subdivision
DIRECT SALES COMPARISON APPROACH TO VALUE (CONT.)
Comparable # 5
Subdivision: Lot 26F Parkside
Location: . same subdivision
Date of Sale: April 1996 - Under Contract
Financing: typical
Number of lots: one
Total Price: $20,000.00
Average per Lot: $20,000.00,
Utilities: elec., water, sewer
Streets: public, paved, curbs, storm sewer
Size: 10,000 square feet
Comments: Typical lot
DIRECT SALES COMPARISON APPROACH TO VALUE (CONT.)
Correlation of Values
Comps 1 thru 5 range frcn $20,000 to $24,000 per lot. From these
sales a price per square foot of $22,000 can be supported. The
comparables used are considered very similar to the subject. The
comps are also in Parkside and give a good indication of value.
FINAL RECONCILLATION OR INCOME APPROACH
Cash Sellout
Having derived the retail lot prices and projected absorption (3.5 lot
month), the next step is to determine deductions from the gross retail
proceeds. These deductions include marketing costs, holding costs
(taxes),, and entrepreneurial or investor's profit. Marketing costs
include sales commissions and advertising. We have projected this
category at 5% of gross sales. With a development of this size, the
holding costs are $125,per lot, per year. Entrepreneurial profit
represents the return required to induce an investor to undertake the
risk associated with acquiring the unsold lots and marketing lots
over the projected sellout period. Our research indicates that typical
investors by the lots to make money on the improvements not the lots.
Profit is not deducted in this market.
Deducting the marketing costs, holding costs, and investors profit
results in periodic net revenues. To arrive at a value indication,
these periodic net revenues must be discounted to present value. The
discount rate selected should reflect the risk incurred by the investor
during the sellout period. The discount rate can be viewed as the sum
of the rate earned on a "safe" investment such as a treasury bill or
certificate of deposit, plus a premium to account for risk. Currently,
treasury bills and certificates of deposit yield between 3% and 6%. As
there is some economic uncertainty at present, we have considered a 5%
risk premium appropriate, yielding a range of between 8% & 11%. We have
concluded that an 8% rate reasonable reflects the market for the
subject property. The discount rate has been applied on a future value
basis. That is the net present value of the future proceeds.
FINAL RECONCILIATION (CONT.)
We have projected a sellout period of 2.5 years which is an absorption
rate of 3.5 lots per month. This includes 41 existing lots.
From the Direct Sales Comparison Approach we have established a value
of $22,000 for each of the 64 lots in phase III.
64 Lots: $22,000 x 64 = $1,408,000.00
gross proceeds = $1,,408,000.00
Expenses And Profit:
sales commission/marketing expense @ 5% x lot values $70,400
taxes @ $125 per lot x 64 x lst year sell out $ 8,000
taxes @ $125 per lot x 64 x 2nd year sell out $ 8,000
taxes $125 per lot x 16 x 3rd year sell out $ 2,000
Gross Receipts $1,408,000
-$ 70,400
-$ 18,000
Value $1,319,600
The market should be able to absorb all 64 lots in 2.5 years. The
discount rate is 8% for a 2.50 year period. The present value of the
proposed lots is $1,131,341. We estimate the 64 lot phase III of
Parkside to have a present value of:
$1,150,000
ONE MILLION ONE HUNDRED FIFTY THOUSAND DOLLARS
(ROUNDED)
INSERT 3-7-149 HENRY COUNTY CODE
(3) Crop gardens.
(4) Local, state and federal governmental buildings.
(5) Publicly owned and operated parks and recreation areas.
(6) Temporary buildings and storage of materials in conjunction with
construction or a building on a lot or adjacent lots where residential
construction is taking place.
(c)Accessory Uses. Those accessory uses common to all single-family
residential districts.
(d)Conditional Uses. Upon application to, and recommendation by the planning
commission and favorable decision thereon by the board of county commissioners,
the following conditional uses are permitted in this district:
(1) Those conditional uses common to all single family residential districts
with the exception of garage apartments and basement apartments.
(2) Move-in houses.
(e)Conditional Exceptions. Those conditional exceptions common to all single
family residential districts with the exception of taxidermy.
(f) Space Limits:
(1) Minimum lot are - 30,000 square feet
(2) Minimum lot width - 125 feet
(3) Minimum front yard - 60 feet from right of way line
(4) Minimum side yard - 30 feet (15 feet each side)
(5) Minimum rear yard - 40 feet
(6) Maximum height - 35 feet
(7) Minimum floor area (heated space) - 800 square feet (per dwelling unit)
(8) Curb and gutter - Yes
(9) Paved driveway - Yes
(10)Sewage system - Sanitary sewer required
(11)Water system - County water system
(Ord. No. 90-09,9-19-90)
Sec. 3-7-149. RM: multiple family residence district.
(a) Purpose: It is the intent of this district to provide for the development
of multiple family residences at moderate to high densities on lots where
public water and sewer systems are provided.
(b) Permitted Uses:
(1) Multiple-family dwellings, including fee simple townhouses or cluster homes.
(2) Boarding and rooming houses
(3) Local, state and federal governmental buildings.
(4) Publicly owned and operated parks and recreation areas.
(5) Temporary buildings and storage of materials in conjunction with
construciton of a building on a lot or adjacent lots where residential
construction is taking place.
(c) Accessory Uses. None
(d) Conditional Uses. Upon application to, and recommendation by the planning
commission and favorable decision theron by the board of county commissioners,
the following conditional uses are permitted in this district:
Those conditional uses common to all single family residential districts with
the exception of garage apartments and basements apartments.
(e) Conditional Exceptions. Those conditional exceptions common to all single-
family residential districts with the exception of taxidermy.
(f) Space Limits:
(g) Miscellaneous Provisions. For the purpose of promoting innovative design
and building sitting, all multiple-family developments shall be treated as one
(1) lot with setbacks applying to exterior property lines. The maximum
permissible density for a multiple-family development shall be ten (10) dwelling
units per acre. Any portion of a multiple family site designated as floodplain
shall not be included in the density calculation. (Ord. No. 89-19, 11-7-89)
1. Minimum lot area - 5,445 sq feet per dwelling unit, 18 dwelling units/acre.
2. Minimum lot width - 100 feet.
3. Minimum Front yard - 60 feet from right of way line.
4. Minimum side yard - 15 feet
5. Minimum rear yard - 20 feet
6. Maximum height - 4 stories or 45 feet, whichever is less
7. Minimum floor area heated space - 650 square feet for a one bedroom unit;
950 square feet per two bedroom unit;(and for three or more bedroom units,) 200
additional square feet per bedroom.
8. Curb and gutter - Yes
9. Paved driveway - Yes
10.Sewage system - Sanitary sewer required
11.Water system - County water system
Sec. 3-7-150 RMH: mobile home development district.
a.Purpose. It is the purpose of this district to accommodate mobile home
developments in accordance with the procedures, requirements and limitations
set forth in Article IX of theis chapter. Within such developments, mobile
home developments may be established subject to the requirements and
limitations set forth in these and other regulations of Henry County. It is
intended that such mobile home developments shall be so located, designed, and
improved as to provide a desirable residential environment, protection from
potentially adverse neighboring influences, protection from adjacent
residential properties, and access for vehicular traffic without traversing
local streets in adjoining residential neighborhoods. Mobile home
developments, including mobile home parks and mobile home subdivisions, shall
be located on a thoroughfare having the minimum classification of arterial.
b. Permitted Uses:
(1).Mobile homes on individual lots.
(2).Mobile home developments and communities including mobile home parks and
subdivisions.
(3).Manufactured housing.
(4).Local, state and federal governmental buildings.
(5).Publicly owned and operated parks and recreation areas.
c. Accessory Uses:
(1).One (1) office/maintenance building incidental to use by residents of a
mobile home park.
(2).Commercial and service establishments intended to serve only persons within
the mobile home park when located within mobile home parks and occupying not
more.
INSERT - GENERAL NOTES
GENERAL NOTES:
1. OWNER/DEVELOPER
KILLEARN PROPERTIES, INC. OF GEORGIA
100 EAGLE'S LANDING WAY
STOCKBRIDGE, GA 30281
PHONE 770-389-2020
24 HR. CONTACT: JOE WILLIAMS
3. PHASE THREE CONTAINS 21.97 ACRES AND 64 LOTS.
4. PROPERTY IS ZONED RM.
5. BUILDING SETBACKS ARE AS FOLLOWS:
FRONT YARD 40'
SIDE YARD 10'
REAR YARD 40'
CUL-DE-SAC FRONT 30'
6. PROPERTY WILL BE SERVED BY PUBLIC SANITARY
SEWER AND WATER SUPPLIED BY HENRY CO.
INSERT MAP OF SUBJECT AREA
</R
Promissory Note # 1 ($ 194,155.00 )
Borrower's Name and Address
"I" includes each borrower below, jointly and severally.
THE WIMBERLY INVESTMENT FUND, L.P.
Suite 300
300 Corporate Center Dr.
Morrow, Ga. 30260
Lender's Name and Address
"You" means the Lender, its successors and assigns.
KILLEARN, INC.
100 Eagle's Landing Way
Stockbridge, Ga., 30281
Loan Number:
Date: January 15, 1998
Maturity Date: January 15, 1999
Tax ID#: 58-2025217
For value received, I promise to pay to you, or your order, at your address
listed above the PRINCIPAL sum of ONE HUNDRED THOUSAND ONE HUNDRED FIFTY FIVE
AND 00/100--------------Dollars $194,155.00.
SINGLE ADVANCE: I will receive all of this principal sum on January 15,
1998. No additional advances are contemplated under this note.
INTEREST: I agree to pay interest on the outstanding principal balance from
January 28, 1998 at the rate of 8.5% per year until January 15, 1999
ACCRUAL METHOD: Interest will be calculated on a ACTUAL/365 day basis.
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this
note owing after maturity, and until paid in full, as stated below:
At a rate equal to 10% per annum
PAYMENTS: I agree to pay this note as follows:
INTEREST: I agree to pay accrued interest on January 15, 1999
PRINCIPAL: I agree to pay the principal on January 15, 1999
SECURITY: This note is separately secured by (describe separate document by
type and date):
26,780 shares of common stock of KILLEARN PROPERTIES, INC.
PURPOSE: The purpose of this loan is Investment
SIGNATURES AND SEALS: IN WITNESS WHEREOF, I have signed my name and affixed
my seal on this 28th day of January, 1998. By doing so, I agree to the terms
of this Note (including those on page 2). I have received a copy on today's
Date.
THE WIMBERLY INVESTMENT FUND, L.P.
BY: /s/ JAMES M. BAKER
------------------------------------
President of G.P.
SIGNATURE FOR LENDER
/s/ J.T. WILLIAMS, JR.
- - ---------------------------------------
J. T. Williams, Jr., PRESIDENT
Promissory Note # 2 ($ 2,092,712.50 )
Borrower's Name and Address
"I" includes each borrower below, jointly and severally.
THE WIMBERLY INVESTMENT FUND, L.P.
Suite 300
300 Corporate Center Dr.
Morrow, Ga. 30260
Lender's Name and Address
"You" means the Lender, its successors and assigns.
KILLEARN, INC.
100 Eagle's Landing Way
Stockbridge, Ga., 30281
Loan Number:
Date: January 15, 1998
Maturity Date: January 15, 1999
Tax ID#: 58-2025217
For value received, I promise to pay to you, or your order, at your address
listed above the PRINCIPAL sum of TWO MILLION NINETY TWO THOUSAND SEVEN
HUNDRED TWELVE AND 51/100--------------Dollars $2,092,712.50.
SINGLE ADVANCE: I will receive all of this principal sum on January 15,
1998. No additional advances are contemplated under this note.
INTEREST: I agree to pay interest on the outstanding principal balance from
January 15, 1998 at the rate of 8.5% per year until January 15, 1999
ACCRUAL METHOD: Interest will be calculated on a ACTUAL/365 day basis.
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this
note owing after maturity, and until paid in full, as stated below:
At a rate equal to 10% per annum
PAYMENTS: I agree to pay this note as follows:
INTEREST: I agree to pay accrued interest on January 15, 1999
PRINCIPAL: I agree to pay the principal on January 15, 1999
SECURITY: This note is separately secured by (describe separate document by
type and date):
288,650 shares of common stock of KILLEARN PROPERTIES, INC.
PURPOSE: The purpose of this loan is Investment
SIGNATURES AND SEALS: IN WITNESS WHEREOF, I have signed my name and affixed
my seal on this 15th day of January, 1998. By doing so, I agree to the terms
of this Note (including those on page 2). I have received a copy on today's
Date.
THE WIMBERLY INVESTMENT FUND, L.P.
BY: /s/ JAMES M. BAKER
------------------------------------
President of G.P.
SIGNATURE FOR LENDER
/s/ J.T. WILLIAMS, JR.
- - ---------------------------------------
J. T. Williams, Jr., PRESIDENT
DEFINITIONS: As used on page 1, "__" means the terms that apply to this
loan. "I," "me" or "my" means each Borrower who signs this note and each
other person or legal entity (including guarantors, endorsers, and sureties)
who agrees to pay this note (together referred to as "us"). "You" or "your"
means the Lender and its successors and assigns.
APPLICABLE LAW: The law of the state of Georgia will govern this note. Any
term of this note which is contrary to applicable law will not be effective,
unless the law permits you and me to agree to such a variation. If any
provision of this agreement cannot be enforced according to its terms, this
fact will not affect the enforceability of the remainder of this agreement.
No modification of this agreement may be made without your express written
consent. Time is of the essence in this agreement.
PAYMENTS: Each payment I make on this note will first reduce the amount I
owe you for charges which are neither interest nor principal. The remainder
of each payment will then reduce accrued unpaid interest, and then unpaid
principal. If you and I agree to a different application of payments, we
will describe our agreement on this note. I may prepay a part of, or the
entire balance of this loan without penalty, unless we specify to the
contrary on this note. Any partial prepayment will not excuse or reduce any
later scheduled payment until this note is paid in full (unless, when I make
the prepayment, you and I agree in writing to the contrary).
INTEREST: Interest accrues on the principal remaining unpaid from time to
time, until paid in full. If I receive the principal in more than one
advance, each advance will start to earn interest only when I receive the
advance. The interest rate in effect on this note at any given time will
apply to the entire principal advanced at that time. You and I may provide
in this agreement for accrued interest not paid when due to be added to
principal. Notwithstanding anything to the contrary, I do not agree to pay
and you do not intend to charge any rate of interest that is higher than the
maximum rate of interest you could charge under applicable law for the
extension of credit that is agreed to here (either before or after maturity).
If any notice of interest accrual is sent and is in error, we mutually agree
to correct it, and if you actually collect more interest than allowed by law
and this agreement, you agree to refund it to me.
INDEX RATE: The index will serve only as a device for setting the rate on
this note. You do not guarantee by selecting this index, or the margin, that
the rate on this note will be the same rate you charge on any other loans or
class of loans to me or other borrowers.
ACCRUAL METHOD: The amount of interest that I pay on this loan will be
calculated using the interest rate and accrual method stated on page 1 of
this note. For the purpose of interest calculation, the accrual method will
determine the number of days in a "year." If no accrual method is stated,
then you may use any reasonable accrual method for calculating interest.
POST MATURITY RATE: For purposes of deciding when the "Post Maturity Rate"
(shown on page 1) applies, the term "maturity" means the date of the last
scheduled payment indicated on page 1 of this note or the date you accelerate
payment on the note, whichever is earlier.
SINGLE ADVANCE LOANS: If this is a single advance loan, you and I expect
that you will make only one advance of principal. However, you may add other
amounts to the principal if you make any payments described in the "PAYMENTS
BY LENDER" paragraph below, or if we have agreed that accrued interest not
paid when due may be added to principal.
MULTIPLE ADVANCE LOANS: If this is a multiple advance loan, you and I expect
that you will make more than one advance of principal. If this is closed end
credit, repaying a part of the principal will not entitle me to additional
credit.
PAYMENTS BY LENDER: If you are authorized to pay, on my behalf, charges I am
obligated to pay (such as property insurance premiums), then you may treat
those payments made by you as advances and add them to the unpaid principal
under this note, or you may demand immediate payment of the charges.
SET-OFF: I agree that you may set off any amount due and payable under this
note against any right I have to receive money from you.
"Right to receive money from you" means:
(1) any deposit account balance I have with you;
(2) any money owed to me on an item presented to you or in your possession
for collection or exchange; and
(3) any repurchase agreement or other nondeposit obligation.
"Any amount due and payable under this note" means the total amount of which
you are entitled to demand payment under the terms of this note at the time
you set off. This total includes any balance the due date for which you
properly accelerate under this note.
If my right to receive money from you is also owned by someone who has not
agreed to pay this note, your right of set off will apply to my interest in
the obligation and to any other amounts I could withdraw on my sole request
or endorsement. Your right of set-off does not apply to an account or other
obligation where my rights are only as a representative. It also does not
apply to any Individual Retirement Account or other tax deferred retirement
account.
You will not be liable for the dishonor of any check when the dishonor occurs
because you set off this debt against any of my accounts. I agree to hold
you harmless from any such claims arising as a result of your exercise of
your right of set-off.
REAL ESTATE OR RESIDENCE SECURITY: If this note is secured by real estate or
a residence that is personal property, the existence of a default and your
remedies for such a default will be determined by applicable law, by the
terms of any separate instrument creating the security interest and, to the
extent not prohibited by law and not contrary to the terms of the separate
security instrument, by the "Default" and "Remedies" paragraphs herein.
DEFAULT: I will be in default if any one or more of the following occur:
(1) I fail to make a payment on time or in the amount due; (2) I fail to keep
the property insured, if required; (3) I fail to pay, or keep any promise, on
any debt or agreement I have with you; (4) any other creditor of mine
attempts to collect any debt I owe him through court proceedings; (5) I die,
am declared incompetent, make an assignment for the benefit of creditors, or
become insolvent (either because my liabilities exceed my assets or I am
unable to pay my debts as they become due); (6) I make any written statement
or provide any financial information that is untrue or inaccurate at the time
it was provided; (7) I do or fail to do something which causes you to believe
that you will have difficulty collecting the amount I owe you; (8) any
collateral securing this note is used in a manner or for a purpose which
threatens confiscation by a legal authority; (9) I change my name or assume
an additional name without first notifying you before making such a change;
(10) I fail to plant, cultivate and harvest crops in due season; (11) any
loan proceeds are used for a purpose that will contribute to excessive
erosion of highly credible land or to the conversion of wetlands to produce
an agricultural commodity, as further explained in 7 C.F.R. Part 1940,
Subpart G, Exhibit M.
REMEDIES: If I am in default on this note you have, but are not limited to,
the following remedies:
(1) You make demand immediate payment of all I owe you under this note
(principal, accrued unpaid interest and other accrued charges).
(2) You may set off this debt against any right I have to the payment of money
from you, subject to the terms of the "Set-Off" paragraph herein.
(3) You may demand security, additional security, or additional parties to be
obligated to pay this note as a condition for not using any other remedy.
(4) You may refuse to make advances to me or allow purchases on credit by me.
(5) You may use any remedy you have under state or federal law.
By selecting any one or more of these remedies you do not give up your right to
later use any other remedy. By waiving your right to declare an event to be a
default, you do not waive your right to later consider the event as a default if
it continues or happens again.
COLLECTION COSTS AND ATTORNEY'S FEES: I agree to pay all costs of collection,
replevin or any other or similar type of cost if I am in default. In addition,
if you hire an attorney to collect this note, I also agree to pay any fee, not
to exceed 15 percent of the principal and interest then owed, you incur with
such attorney plus court costs (except where prohibited by law). To the extent
permitted by the United States Bankruptcy Code, I also agree to pay the
reasonable attorney's fees and costs you incur to collect this debt as awarded
by any court exercising jurisdiction under the Bankruptcy Code.
WAIVER: I give up my rights to require you to do certain things. I will not
require you to:
(1) demand payment of amounts due (presentment);
(2) obtain official certification of nonpayment (protest);
(3) give notice that amounts due have not been paid (notice of dishonor); or
(4) give me notice prior to seizure of my personal property when you are
seeking to foreclose a secured interest in any of my personal property used
to secure a commercial transaction.
I waive any defenses I have based on suretyship or impairment of collateral.
OBLIGATIONS INDEPENDENT: I understand that I must pay this note even if
someone else has also agreed to pay it (by, for example, signing this form or
a separate guarantee of endorsement). You may sue me alone, or anyone else
who is obligated on this note, or any number of us together, to collect this
note. You may do so without any notice that is has not been paid (notice of
dishonor). You may without notice release any party to this agreement without
releasing any other party. If you give up any of your rights, with or
without notice, it will not affect my duty to pay this note. Any extension
of new credit to any of us, or renewal of this note by all or less than all
of us will not release me from my duty to pay it. (Of course, you are
entitled to only one payment in full.) I agree that you may at your option
extend this note or the debt represented by this note, or any portion of the
note or debt, from time to time without limit or notice and for any term
without affecting my liability for payment of the note. I will not assign my
obligation under this agreement without your prior written approval.
CREDIT INFORMATION: I agree and authorize you to obtain credit information
about me from time to time (for example, by requesting a credit report) and
to report to others your credit experience with me (such as a credit
reporting agency). I agree to provide you, upon request, any financial
statement or information you may deem necessary. I warrant that the
financial statements and information I provide to you are or will be
accurate, correct and complete.
NOTICE: Unless otherwise required by law, any notice to me shall be given by
delivering it or by mailing it by first class mail addressed to me at my last
known address. My current address is on page 1. I agree to inform you in
writing of any change in my address. I will give any notice to you my
mailing it first class to your address stated on page 1 of this agreement, or
to any other address that you have designated.
SECURITY AGREEMENT # 1 ( $ 194,155.00 )
(Collateral Pledge Agreement)
Date: January 28, 1998
Debtor: THE WIMBERLY INVESTMENT FUND, L.P.
Business
Or Residence Suite 300
Address: 300 Corporate Center Drive
City, State
& Zip Code: Morrow, Ga., 30260
Secured Party: KILLEARN, INC.
Address: 100 Eagle's Landing Way
City, State
& Zip Code: Stockbridge, Ga., 30281
1. SECURITY INTEREST AND COLLATERAL.
To secure the debt, liability or obligation of the Debtor to secured party
evidence by the following: Promissory note dated January 28, 1998 in the
amount of $194,155.00 between the parties and any extensions, renewals or
replacements thereof therein referred to as the "Obligations").
Debtor hereby grants Secured Party a security interest (herein called the
"Security Interest") in the property owned by Debtor and held by Secured
Party that is described as follows: 26,780 shares of the common stock of
KILLEARN PROPERTIES, INC. together with all rights in connection with such
property (herein called the "Collateral").
2. REPRESENTATIONS, WARRANTIES AND COVENANTS. DEBTOR REPRESENTS,
WARRANTS AND COVENANTS THAT:
(a) Debtor will duly endorse, in blank, each and every instrument
constituting Collateral by signing on said instrument or by signing a
separate document of assignment or transfer, if required by Secured Party.
(b) Debtor is the owner of the Collateral free and clear of all
liens, encumbrances, security interests and restrictions, except the Security
Interest and any restrictive legend appearing on any instrument constituting
Collateral.
(c) Debtor will keep the Collateral free and clear of all liens,
encumbrances and security interests, except the Security Interest.
(d) Debtor will pay, when due, all taxes and other governmental
charges levied or assessed upon or against any Collateral.
(e) At any time, upon request by Secured Party, Debtor will
deliver to Secured Party all notices, financial statements, reports or other
communications received by Debtor as an owner or holder of the Collateral.
(f) Debtor will upon receipt deliver to Secured Party in pledge
as additional Collateral all securities distributed on account of the
Collateral such as stock dividends and securities resulting from Stock
splits, reorganizations and recapitalizations.
THIS AGREEMENT CONTAINS ADDITIONAL PROVISIONS SET FORTH ON PAGES 2 AND 3
HEREOF, ALL OF WHICH ARE MADE A PART HEREOF.
DEBTOR'S NAME:
THE WIMBERLY INVESTMENT FUND, L. P.
By: /s/ JAMES M. BAKER
------------------------------------
Title: President of G. P.
---------------------------------
SECURITY AGREEMENT # 2 ( $ 2,092,712.50 )
(Collateral Pledge Agreement)
Date: January 15, 1998
Debtor: THE WIMBERLY INVESTMENT FUND, L.P.
Business
Or Residence Suite 300
Address: 300 Corporate Center Drive
City, State
& Zip Code: Morrow, Ga., 30260
Secured Party: KILLEARN, INC.
Address: 100 Eagle's Landing Way
City, State
& Zip Code: Stockbridge, Ga., 30281
1. SECURITY INTEREST AND COLLATERAL.
To secure the debt, liability or obligation of the Debtor to secured party
evidence by the following: Promissory note dated January 15, 1998 in the
amount of $2,092,712.50 between the parties and any extensions, renewals or
replacements thereof therein referred to as the "Obligations").
Debtor hereby grants Secured Party a security interest (herein called the
"Security Interest") in the property owned by Debtor and held by Secured
Party that is described as follows: 288,650 shares of the common stock of
KILLEARN PROPERTIES, INC. together with all rights in connection with such
property (herein called the "Collateral").
2. REPRESENTATIONS, WARRANTIES AND COVENANTS. DEBTOR REPRESENTS,
WARRANTS AND COVENANTS THAT:
(a) Debtor will duly endorse, in blank, each and every instrument
constituting Collateral by signing on said instrument or by signing a
separate document of assignment or transfer, if required by Secured Party.
(b) Debtor is the owner of the Collateral free and clear of all
liens, encumbrances, security interests and restrictions, except the Security
Interest and any restrictive legend appearing on any instrument constituting
Collateral.
(c) Debtor will keep the Collateral free and clear of all liens,
encumbrances and security interests, except the Security Interest.
(d) Debtor will pay, when due, all taxes and other governmental
charges levied or assessed upon or against any Collateral.
(e) At any time, upon request by Secured Party, Debtor will
deliver to Secured Party all notices, financial statements, reports or other
communications received by Debtor as an owner or holder of the Collateral.
(f) Debtor will upon receipt deliver to Secured Party in pledge
ass additional Collateral all securities distributed on account of the
Collateral such as stock dividends and securities resulting from Stock
splits, reorganizations and recapitalizations.
THIS AGREEMENT CONTAINS ADDITIONAL PROVISIONS SET FORTH ON PAGES 2 AND 3
HEREOF, ALL OF WHICH ARE MADE A PART HEREOF.
DEBTOR'S NAME:
THE WIMBERLY INVESTMENT FUND, L. P.
By: /s/ JAMES M. BAKER
------------------------------------
Title: President of G. P.
---------------------------------
ADDITIONAL PROVISIONS
3. RIGHTS OF SECURED PARTY. Debtor agrees that Secured Party may at
any time, whether before or after the occurrence of an Event of Default and
without notice or demand of any kind, (i) notify the obligor on or issuer of
any Collateral to make payment to Secured Party of any amounts due or
distributable thereon, (ii) in Debtor's name or Secured Party's name enforce
collection of any Collateral by suit or otherwise, or surrender, release or
exchange all or any part of it, or compromise, extend or renew for any period
any obligation evidenced by the Collateral, (iii) receive all proceeds of the
Collateral, and (iv) hold any increase or profits received from the
Collateral as additional security for the Obligations, except that any money
received from the Collateral shall, at Secured Party's option, be applied in
reduction of the Obligations, in such order of application as Secured Party
may determine, or be remitted to Debtor.
4. EVENTS OF DEFAULT. Each of the following occurrences shall
constitute an event of default under this Agreement (herein called "Event of
Default"); (i) Debtor shall fail to pay any or all of the Obligations when
due or (if payable on demand) on demand, or shall fail to observe or perform
any covenant or agreement herein binding on it; (ii) any representation or
warranty by Debtor set forth in this Agreement or made to Secured Party in
any financial statements or reports submitted to Secured Party by or on
behalf of Debtor shall prove materially false or misleading; (iii) a
garnishment summons or a writ of attachment shall be issued against or served
upon the Secured Party for the attachment of any property of the Debtor or
any indebtedness owing to Debtor; (iv) Debtor or any guarantor of any
Obligation shall (A) be or become insolvent (however defined); (B)
voluntarily file, or have filed against it involuntarily, a petition under
the United States Bankruptcy Code; or (C) if a corporation, partnership or
organization, be dissolved or liquidated or, if a partnership, suffer the
death of a partner or, if an individual, die; or (D) go out of business; (v)
Secured Party shall in good faith believe that the value then realizable by
collection or disposition of the Collateral, after deduction of expenses of
collection and disposition, is less than the aggregate unpaid balance of all
Obligations then outstanding; (vi) Secured Party shall in good faith believe
that the prospect of due and punctual payment of any or all of the
Obligations is impaired.
5. REMEDIES UPON EVENT OF DEFAULT. Upon the occurrence of an Event of
Default and at any time thereafter, Secured Party may exercise any one or
more of the following rights or remedies: (i) declare all unmatured
Obligations to be immediately due and payable, and the same shall thereupon
be immediately due and payable, without presentment or other notice or
demand; (ii) exercise all voting and other rights as a holder of the
Collateral; (iii) exercise and enforce any or all rights and remedies
available upon default to a secured party under the Uniform Commercial Code,
including the right to offer and sell the Collateral privately to purchasers
who will agree to take the Collateral for investment and not with a view to
distribution and who will agree to the imposition of restrictive legends on
the certificates representing the Collateral, and the right to arrange for a
safe which would otherwise qualify as exempt from registration under the
Securities Act of 1933; and if notice to Debtor of any intended disposition
of the Collateral or any other intended action is required by law in a
particular instance, such notice shall be deemed commercially reasonable if
given at least 10 calendar days prior to the date of intended disposition or
other action; (iv) exercise or enforce any or all other rights or remedies
available to Secured Party by law or agreement against the Collateral,
against Debtor or against any other person or property. Upon the occurrence
of the Event of Default described in Section 4(iv)(B), all Obligations shall
be immediately due and payable without demand or notice thereof.
6. MISCELLANEOUS. Any disposition of the Collateral is the manner
provided in Section 5 shall be deemed commercially reasonable. This
Agreement can be waived, modified, amended, terminated or discharged, and the
Security Interest can be released, only explicitly in a writing signed by
Secured Party. A waiver signed by Secured Party shall be effective only in
the specific instance and for the specific purpose given. Mere delay or
failure to act shall not preclude the exercise or enforcement of any of
Secured Party's rights or remedies. All rights and remedies of Secured Party
shall be cumulative and may be exercised singularly or concurrently, at
Secured Party's option, and the exercise or enforcement of any one such right
or remedy shall neither be a condition to nor bar the exercise or enforcement
of any other. All notices to be given to Debtor shall be deemed sufficiently
given if delivered or mailed by registered or certified mail, postage
prepaid, to Debtor at its address set forth above or at the most recent
address shown on Secured Party's records. Secured Party's duty of care with
respect to Collateral in its possession (as imposed by law) shall be deemed
fulfilled if Secured Party exercises reasonable care in physically
safekeeping such Collateral or, in the case of Collateral in the custody or
possession of a bailee or other third person, exercises reasonable care in
the selection of the bailee or other third person, and Secured Party need not
otherwise preserve, protect, insure or care for any Collateral. Secured Party
shall not be obligated to preserve any rights Debtor may have against prior
parties, to exercise at all or in any particular manner any voting rights
which may be available with respect to any Collateral, to realize on the
Collateral at all or in any particular manner or order, or to apply any cash
proceeds of Collateral in any particular order of application. Debtor will
reimburse Secured Party for all expenses (including reasonable attorney's
fees and legal expenses) incurred by Secured Party in the protection, defense
or enforcement of the Security Interest, including expenses incurred in any
litigation or bankruptcy or insolvency proceedings. This Agreement shall be
binding upon and inure to the benefit of Debtor and Secured Party and their
respective heirs, representatives, successors and assigns and shall take
effect when signed by Debtor and delivered to Secured Party, and Debtor
waives notice of Secured Party's acceptance hereof. This Agreement shall be
governed by laws of the state in which it is executed and, unless the context
otherwise requires, all terms used herein which are defined in Articles 1 and
9 of the Uniform Commercial Code, as in effect in said state, shall have the
meanings therein stated. If any provision or application of this Agreement
is held unlawful or unenforceable in any respect, such illegality or
unenforceability shall not affect other provisions or applications which can
be given effect, and this Agreement shall be construed as if the unlawful or
unenforceable provision or application had never been contained herein or
prescribed hereby. All representations and warranties contained in this
Agreement shall survive the execution, delivery and performance of this
Agreement and the creation and payment of the Obligations. If this Agreement
is signed by more than one person as Debtor, the term "Debtor" shall refer to
each of them separately and to both or all of them jointly, all such persons
shall be bound both severally and jointly with the other(s); and the
Obligations shall include any debts, liabilities and obligations owed to
Secured Party by a Debtor solely or by both or several or all Debtors jointly
or jointly and severally, and all property described in Section 1 shall be
included as part of the Collateral, whether it is owned jointly by both or all
Debtors or is owned in whole or in part by one (or more) of them.
PROMISSORY NOTE
$384,750.00 January 8, 1998
FOR VALUE RECEIVED, the undersigned, Proactive Technologies, Inc., a
Delaware corporation (the "Maker"), promises to pay to the order of O.
Mason Hawkins and Ann Butterfield Hawkins (collectively, "Hawkins") and the
principal sum of THREE HUNDRED EIGHTY-FOUR THOUSAND SEVEN HUNDRED FIFTY
DOLLARS ($384,750.00) on the earlier of (i) July 6, 1998, or (ii) the date
that the shareholders of Killearn Properties, Inc. ("Killearn") are paid
consideration pursuant to a merger between Maker and Killearn (such earlier
date, the "Due Date"), and interest from the date hereof at the "prime
rate" of interest announced from time to time in the Wall Street Journal
plus 1% per annum, payable on the Due Date. Interest shall be calculated
on the basis of a three hundred sixty (360) day year and actual days
elapsed.
This Note constitutes the promissory note referenced in that certain
Put and Call Agreement dated December 24, 1997 by and between Maker and
Hawkins. This Note and the indebtedness evidenced hereby are secured by a
pledge of 40,500 shares of common stock of Killearn pursuant to the terms
of that certain Pledge Agreement of even date herewith.
Maker, at its option, may prepay the indebtedness evidenced by this
Note, in whole or in part, without penalty or premium. Any partial
prepayment of this Note shall be applied first to accrued and unpaid
interest under this Note, and thereafter to outstanding principal.
The principal amount of this Note, and all accrued and unpaid interest
shall be payable to Hawkins in such coin and currency of the United States
of America as at the time of payment shall be legal tender therein for
payment of public and private debts, and may be made by Maker's check
payable to the order of Hawkins, mailed by first-class mail, postage
prepaid, to Hawkins at 6410 Poplar Avenue, Suite 900, Memphis, Tennessee
38119, or such other address as Hawkins shall notify Maker in writing.
This Note may not assigned or transferred by Hawkins and any attempt to
assign or transfer shall be void without the prior written approval of
Maker. This Note shall be deemed to be made under, and shall be construed
in accordance with and governed by the laws of the State of Florida,
without regard to the conflicts of laws principles thereof. This Note
shall be binding upon maker and its successors and assigns, and shall inure
to the benefit of Hawkins an their respective heirs, executors,
representatives and assigns.
IN WITNESS WHEREOF, the undersigned has executed this Note as of the
day and year first written above.
PROACTIVE TECHNOLOGIES, INC.
/s/ Mark A. Conner
MARK A. CONNER,
President
PROMISSORY NOTE
$394,250.00 January 8, 1998
FOR VALUE RECEIVED, the undersigned, Proactive Technologies, Inc., a
Delaware corporation (the "Maker"), promises to pay to the order of O.
Mason Hawkins ("Hawkins") the principal sum of THREE HUNDRED NINETY-FOUR
THOUSAND TWO HUNDRED FIFTY DOLLARS ($394,250.00) on the earlier of (i) July
6, 1998, or (ii) the date that the shareholders of Killearn Properties,
Inc. ("Killearn") are paid consideration pursuant to a merger between
Maker and Killearn (such earlier date, the "Due Date"), and interest from
the date hereof at the "prime rate" of interest announced from time to time
in the Wall Street Journal plus 1% per annum, payable on the Due Date.
Interest shall be calculated on the basis of a three hundred sixty (360)
day year and actual days elapsed.
This Note constitutes the promissory note referenced in that certain
Put and Call Agreement dated December 24, 1997 by and between Maker and
Hawkins. This Note and the indebtedness evidenced hereby are secured by a
pledge of 40,500 shares of common stock of Killearn pursuant to the terms
of that certain Pledge Agreement of even date herewith.
Maker, at its option, may prepay the indebtedness evidenced by this
Note, in whole or in part, without penalty or premium. Any partial
prepayment of this Note shall be applied first to accrued and unpaid
interest under this Note, and thereafter to outstanding principal.
The principal amount of this Note, and all accrued and unpaid interest
shall be payable to Hawkins in such coin and currency of the United States
of America as at the time of payment shall be legal tender therein for
payment of public and private debts, and may be made by Maker's check
payable to the order of Hawkins, mailed by first-class mail, postage
prepaid, to Hawkins at 6410 Poplar Avenue, Suite 900, Memphis, Tennessee
38119, or such other address as Hawkins shall notify Maker in writing.
This Note may not assigned or transferred by Hawkins and any attempt to
assign or transfer shall be void without the prior written approval of
Maker. This Note shall be deemed to be made under, and shall be construed
in accordance with and governed by the laws of the State of Florida,
without regard to the conflicts of laws principles thereof. This Note
shall be binding upon maker and its successors and assigns, and shall inure
to the benefit of Hawkins an their respective heirs, executors,
representatives and assigns.
IN WITNESS WHEREOF, the undersigned has executed this Note as of the
day and year first written above.
PROACTIVE TECHNOLOGIES, INC.
/s/ Mark A. Conner
MARK A. CONNER,
President
PROMISSORY NOTE
$475,000.00 January 8, 1998
FOR VALUE RECEIVED, the undersigned, Proactive Technologies, Inc., a
Delaware corporation (the "Maker"), promises to pay to the order of W.
Reid Sanders ("Sanders") the principal sum of FOUR HUNDRED AND SEVENTY
FIVE THOUSAND DOLLARS ($475,000.00) on the earlier of (i) July
6, 1998, or (ii) the date that the shareholders of Killearn Properties,
Inc. ("Killearn") are paid consideration pursuant to a merger between
Maker and Killearn (such earlier date, the "Due Date"), and interest from
the date hereof at the "prime rate" of interest announced from time to time
in the Wall Street Journal plus 1% per annum, payable on the Due Date.
Interest shall be calculated on the basis of a three hundred sixty (360)
day year and actual days elapsed.
This Note constitutes the promissory note referenced in that certain
Put and Call Agreement dated December 24, 1997 by and between Maker and
Hawkins. This Note and the indebtedness evidenced hereby are secured by a
pledge of 40,500 shares of common stock of Killearn pursuant to the terms
of that certain Pledge Agreement of even date herewith.
Maker, at its option, may prepay the indebtedness evidenced by this
Note, in whole or in part, without penalty or premium. Any partial
prepayment of this Note shall be applied first to accrued and unpaid
interest under this Note, and thereafter to outstanding principal.
The principal amount of this Note, and all accrued and unpaid interest
shall be payable to Hawkins in such coin and currency of the United States
of America as at the time of payment shall be legal tender therein for
payment of public and private debts, and may be made by Maker's check
payable to the order of Hawkins, mailed by first-class mail, postage
prepaid, to Hawkins at 6410 Poplar Avenue, Suite 900, Memphis, Tennessee
38119, or such other address as Hawkins shall notify Maker in writing.
This Note may not assigned or transferred by Hawkins and any attempt to
assign or transfer shall be void without the prior written approval of
Maker. This Note shall be deemed to be made under, and shall be construed
in accordance with and governed by the laws of the State of Florida,
without regard to the conflicts of laws principles thereof. This Note
shall be binding upon maker and its successors and assigns, and shall inure
to the benefit of Hawkins an their respective heirs, executors,
representatives and assigns.
IN WITNESS WHEREOF, the undersigned has executed this Note as of the
day and year first written above.
PROACTIVE TECHNOLOGIES, INC.
/s/ Mark A. Conner
MARK A. CONNER,
President
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT ("Pledge Agreement") is made this 9th day of January,
1998, by Proactive Technologies, Inc., a Delaware corporation ("Pledgor"), and
O. Mason Hawkins (Pledgee").
RECITALS:
WHEREAS, Pledgee and Pledgor have entered into that certain Put and Call
Agreement dated December 24, 1997 (the "Agreement"), pursuant to which Pledgee
granted a call to Pledgor to purchase 41,500 shares of the common stock
(the "Shares") of Killearn Properties, Inc., a Florida corporation (Killearn");
WHEREAS, on January 6, 1998, Pledgor exercised the call to purchase the
Shares;
WHEREAS, Pledgor has executed and delivered that certain Promissory Note
dated of even date herewith, payable to Pledgee in the principal amount of
$394,250.00 (the "Note"), representing the purchase price of the Shares; and
WHEREAS, to secure payment of the Note, Pledgee has required Pledgor to
grant to Pledgee a security interest in the Shares pursuant to the terms and
conditions of this Pledge Agreement.
NOW THEREFORE, in consideration of the mutual covenants set forth herein
and intending to be legally bound, Pledgee and Pledgor hereby agree as
follows:
1. Pledge. Pledgor hereby pledges and grants to Pledgee a security
interest in the Shares to secure the timely payment of all principal and
interest due under the Note (the "Indebtedness").
2. Delivery and Possession of Shares. All certificates or instruments
representing or evidencing the Shares shall be delivered to and held by Pledgee
pursuant hereto and shall be accompanied by a duly executed stock power in
blank. Pledgee shall hold the Shares and all certificates or instruments
related to the Shares, including the Note, until such time as Pledgor has
satisfied its Indebtedness. As long as no Event of Default (as defined in
Section 3 hereof) has occurred (i) Pledgee may not sell, transfer, assign,
encumber or dispose of the Shares during the term hereof, and (ii) Pledgor
shall have the right to vote the Shares, to receive dividends on the Shares
and to exercise any other rights of ownership of the Shares.
3. Events of Default
(a) The occurrence of any of the following shall constitute an "Event
of Default" under this Pledge Agreement:
(i) Failure by Pledgor to pay the principal or interest under the
Note when due, if such failure continues for a period of ten (10)days after
written notice of such failure is given to Pledgor or Pledgee.
(ii) The appointment of a receiver for Pledgor or for any of
Pledgor's assets, or any assignment for the benefit of creditors or filing
of a petition under bankruptcy, insolvency or debtor's relief law that is
not dismissed within 90 days of such filing, or for any readjustment of
indebtedness, composition or extension by Pledgor.
(b) If an event of Default shall occur and be continuing, Pledgee
may exercise any right or remedy provided by the Commercial Code of the
State of Tennessee, as the same may be in effect from time to time,
Including, without limitation, the right of foreclosure.
4. Amendment. No amendment or waiver of any provision of this Pledge
Agreement nor consent to any departure by Pledgor herefrom shall in any event
be effective unless the same shall be in writing and signed by Pledgee and
Pledgor, and then such waiver or consent shall be effective only in the
Specific instance and for the specific purpose for which given.
5. Notices. All notices required hereunder shall be in writing and
shall be deemed given and received upon personal delivery (whether by courier
or messenger delivery) to the person for whom intended, or by facsimile
(confirmed receipt), or upon depositing such notice in the United States Mail,
postage prepaid, addressed to the party for whom intended at the following
address:
Pledgee: O. Mason Hawkins
6410 Poplar Avenue, Suite 900
Memphis, Tennessee 38119
Facsimile: 901-818-5210
Pledgor: Proactive Technologies, Inc.
7118 Beech Ridge Trail
Tallahassee, Florida 32312
Facsimile: 850-668-9100
or to such other address as may be designated by written notice given in
accordance with the provisions hereof.
6. Continuing Security Interest, Assignment, Termination. This Pledge
Agreement shall create a continuing security interest in the Shares and shall
remain in full force and effect until payment in full of the Indebtedness, and
be binding upon Pledgee and Pledgor, and their successors and permitted assigns.
Pledgee shall not assign or otherwise transfer the Note to any other person or
entity, and any attempt to assign or transfer the Note shall be void without the
prior written notice to and approval of Pledgor. Upon the payment in full of
the Indebtedness, this Pledge Agreement shall terminate and Pledgee shall
return to Pledgor the Shares and stock power.
7. Governing Law. This Pledge Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee, without any
regard to the conflicts of law rules thereof.
8. Counterparts. This pledge Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9. Captions. The captions used in this Agreement are used for convenience
only and are not to be used in construing or interpreting this Pledge Agreement.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Pledge Agreement as of the date written above.
PLEDGOR:
PROACTIVE TECHNOLOGIES, INC.
/s/ Mark A. Conner
MARK A. CONNER
President
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT ("Pledge Agreement") is made this 9th day of January,
1998, by Proactive Technologies, Inc., a Delaware corporation ("Pledgor"), and
W. Reid Sanders ("Pledgee").
RECITALS:
WHEREAS, Pledgee and Pledgor have entered into that certain Put and Call
Agreement dated December 24, 1997 (the "Agreement"), pursuant to which Pledgee
granted a call to Pledgor to purchase 50,500 shares of the common stock
(the "Shares") of Killearn Properties, Inc., a Florida corporation (Killearn");
WHEREAS, on January 6, 1998, Pledgor exercised the call to purchase the
Shares;
WHEREAS, Pledgor has executed and delivered that certain Promissory Note
dated of even date herewith, payable to Pledgee in the principal amount of
$475,000.00 (the "Note"), representing the purchase price of the Shares; and
WHEREAS, to secure payment of the Note, Pledgee has required Pledgor to
grant to Pledgee a security interest in the Shares pursuant to the terms and
conditions of this Pledge Agreement.
NOW THEREFORE, in consideration of the mutual covenants set forth herein
and intending to be legally bound, Pledgee and Pledgor hereby agree as
follows:
1. Pledge. Pledgor hereby pledges and grants to Pledgee a security
interest in the Shares to secure the timely payment of all principal and
interest due under the Note (the "Indebtedness").
2. Delivery and Possession of Shares. All certificates or instruments
representing or evidencing the Shares shall be delivered to and held by Pledgee
pursuant hereto and shall be accompanied by a duly executed stock power in
blank. Pledgee shall hold the Shares and all certificates or instruments
related to the Shares, including the Note, until such time as Pledgor has
satisfied its Indebtedness. As long as no Event of Default (as defined in
Section 3 hereof) has occurred (i) Pledgee may not sell, transfer, assign,
encumber or dispose of the Shares during the term hereof, and (ii) Pledgor
shall have the right to vote the Shares, to receive dividends on the Shares
and to exercise any other rights of ownership of the Shares.
3. Events of Default
(a) The occurrence of any of the following shall constitute an "Event
of Default" under this Pledge Agreement:
(i) Failure by Pledgor to pay the principal or interest under the
Note when due, if such failure continues for a period of ten (10)days after
written notice of such failure is given to Pledgor or Pledgee.
(ii) The appointment of a receiver for Pledgor or for any of
Pledgor's assets, or any assignment for the benefit of creditors or filing
of a petition under bankruptcy, insolvency or debtor's relief law that is
not dismissed within 90 days of such filing, or for any readjustment of
indebtedness, composition or extension by Pledgor.
(b) If an event of Default shall occur and be continuing, Pledgee
may exercise any right or remedy provided by the Commercial Code of the
State of Tennessee, as the same may be in effect from time to time,
Including, without limitation, the right of foreclosure.
4. Amendment. No amendment or waiver of any provision of this Pledge
Agreement nor consent to any departure by Pledgor herefrom shall in any event
be effective unless the same shall be in writing and signed by Pledgee and
Pledgor, and then such waiver or consent shall be effective only in the
Specific instance and for the specific purpose for which given.
5. Notices. All notices required hereunder shall be in writing and
shall be deemed given and received upon personal delivery (whether by courier
or messenger delivery) to the person for whom intended, or by facsimile
(confirmed receipt), or upon depositing such notice in the United States Mail,
postage prepaid, addressed to the party for whom intended at the following
address:
Pledgee: O. Mason Hawkins
6410 Poplar Avenue, Suite 900
Memphis, Tennessee 38119
Facsimile: 901-818-5210
Pledgor: Proactive Technologies, Inc.
7118 Beech Ridge Trail
Tallahassee, Florida 32312
Facsimile: 850-668-9100
or to such other address as may be designated by written notice given in
accordance with the provisions hereof.
6. Continuing Security Interest, Assignment, Termination. This Pledge
Agreement shall create a continuing security interest in the Shares and shall
remain in full force and effect until payment in full of the Indebtedness, and
be binding upon Pledgee and Pledgor, and their successors and permitted assigns.
Pledgee shall not assign or otherwise transfer the Note to any other person or
entity, and any attempt to assign or transfer the Note shall be void without the
prior written notice to and approval of Pledgor. Upon the payment in full of
the Indebtedness, this Pledge Agreement shall terminate and Pledgee shall
return to Pledgor the Shares and stock power.
7. Governing Law. This Pledge Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee, without any
regard to the conflicts of law rules thereof.
8. Counterparts. This pledge Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9. Captions. The captions used in this Agreement are used for convenience
only and are not to be used in construing or interpreting this Pledge Agreement.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Pledge Agreement as of the date written above.
PLEDGOR:
PROACTIVE TECHNOLOGIES, INC.
/s/ Mark A. Conner
MARK A. CONNER
President
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT ("Pledge Agreement") is made this 9th day of January,
1998, by Proactive Technologies, Inc., a Delaware corporation ("Pledgor"), and
O. Mason Hawkins and Ann Butterfield Hawkins ("Pledgees").
RECITALS:
WHEREAS, Pledgee and Pledgor have entered into that certain Put and Call
Agreement dated December 24, 1997 (the "Agreement"), pursuant to which Pledgee
granted a call to Pledgor to purchase 40,500 shares of the common stock
(the "Shares") of Killearn Properties, Inc., a Florida corporation (Killearn");
WHEREAS, on January 6, 1998, Pledgor exercised the call to purchase the
Shares;
WHEREAS, Pledgor has executed and delivered that certain Promissory Note
dated of even date herewith, payable to Pledgee in the principal amount of
$384,750.00 (the "Note"), representing the purchase price of the Shares; and
WHEREAS, to secure payment of the Note, Pledgee has required Pledgor to
grant to Pledgee a security interest in the Shares pursuant to the terms and
conditions of this Pledge Agreement.
NOW THEREFORE, in consideration of the mutual covenants set forth herein
and intending to be legally bound, Pledgee and Pledgor hereby agree as
follows:
1. Pledge. Pledgor hereby pledges and grants to Pledgee a security
interest in the Shares to secure the timely payment of all principal and
interest due under the Note (the "Indebtedness").
2. Delivery and Possession of Shares. All certificates or instruments
representing or evidencing the Shares shall be delivered to and held by Pledgee
pursuant hereto and shall be accompanied by a duly executed stock power in
blank.Pledgee shall hold the Shares and all certificates or instruments
related to the Shares, including the Note, until such time as Pledgor has
satisfied its Indebtedness. As long as no Event of Default (as defined in
Section 3 hereof) has occurred (i) Pledgee may not sell, transfer, assign,
encumber or dispose of the Shares during the term hereof, and (ii) Pledgor
shall have the right to vote the Shares, to receive dividends on the Shares
and to exercise any other rights of ownership of the Shares.
3. Events of Default
(a) The occurrence of any of the following shall constitute an "Event
of Default" under this Pledge Agreement:
(i) Failure by Pledgor to pay the principal or interest under the
Note when due, if such failure continues for a period of ten (10)days after
written notice of such failure is given to Pledgor or Pledgee.
(ii) The appointment of a receiver for Pledgor or for any of
Pledgor's assets, or any assignment for the benefit of creditors or filing
of a petition under bankruptcy, insolvency or debtor's relief law that is
not dismissed within 90 days of such filing, or for any readjustment of
indebtedness, composition or extension by Pledgor.
(b) If an event of Default shall occur and be continuing, Pledgee
may exercise any right or remedy provided by the Commercial Code of the
State of Tennessee, as the same may be in effect from time to time,
Including, without limitation, the right of foreclosure.
4. Amendment. No amendment or waiver of any provision of this Pledge
Agreement nor consent to any departure by Pledgor herefrom shall in any event
be effective unless the same shall be in writing and signed by Pledgee and
Pledgor, and then such waiver or consent shall be effective only in the
Specific instance and for the specific purpose for which given.
5. Notices. All notices required hereunder shall be in writing and
shall be deemed given and received upon personal delivery (whether by courier
or messenger delivery) to the person for whom intended, or by facsimile
(confirmed receipt), or upon depositing such notice in the United States Mail,
postage prepaid, addressed to the party for whom intended at the following
address:
Pledgee: O. Mason Hawkins
6410 Poplar Avenue, Suite 900
Memphis, Tennessee 38119
Facsimile: 901-818-5210
Pledgor: Proactive Technologies, Inc.
7118 Beech Ridge Trail
Tallahassee, Florida 32312
Facsimile: 850-668-9100
or to such other address as may be designated by written notice given in
accordance with the provisions hereof.
6. Continuing Security Interest, Assignment, Termination. This Pledge
Agreement shall create a continuing security interest in the Shares and shall
remain in full force and effect until payment in full of the Indebtedness, and
be binding upon Pledgee and Pledgor, and their successors and permitted assigns.
Pledgee shall not assign or otherwise transfer the Note to any other person or
entity, and any attempt to assign or transfer the Note shall be void without the
prior written notice to and approval of Pledgor. Upon the payment in full of
the Indebtedness, this Pledge Agreement shall terminate and Pledgee shall
return to Pledgor the Shares and stock power.
7. Governing Law. This Pledge Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee, without any
regard to the conflicts of law rules thereof.
8. Counterparts. This pledge Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9. Captions. The captions used in this Agreement are used for convenience
only and are not to be used in construing or interpreting this Pledge Agreement.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Pledge Agreement as of the date written above.
PLEDGOR:
PROACTIVE TECHNOLOGIES, INC.
/s/ Mark A. Conner
MARK A. CONNER
President
AGREEMENT
This agreement made and entered into this 2nd day of March 1999 by and
between Killearn, Inc. ("Purchaser") and D. Mason Hawkins, Ann Butterfield
Hawkins, and W. Reid Sanders ("Sellers"):
WITNESSTH THAT
WHEREAS, Sellers are the owners of a promissory note ("Note") dated
January 8, 1998 in the original amount of $1,254,000 executed by
Proactive Technologies, Inc. in favor of Sellers, a copy of which is
attached hereto as Exhibit "A", and
WHEREAS, the Note is secured by 132,000 shares of the common stock
of Killearn Properties, Inc. and such stock certificates are in the
possession of Sellers and,
WHEREAS, Sellers agree to sell the note, and assign, without
recourse, the Note together with the collateral to Purchaser and
Purchaser agrees to Purchase such Note with the related collateral under
the following terms and conditions;
NOW THEREFORE, for and in consideration of the foregoing premises, and
in consideration of the mutual promises and covenants set forth herein, the
receipt and sufficiency thereof are hereby acknowledged, the parties do hereby
agree as follows:
1. Sellers warrant that the present principal balance of the Note is
$1,254,000.
2. Sellers agree to sell the Note and to assign, without recourse
the Note and the related collateral to Purchaser upon the
payment of $1,150,000.
3. Purchaser agrees to pay to Sellers $50,000 upon execution of
this agreement by both parties, and to pay to Sellers
$1,100,000 on or before March 25, 1999.
4. Sellers agree to assign the Note and related collateral to
Purchaser simultaneous with the payment in full, of the $1,150,000.
5. Sellers agree that it will not alter or amend the Note or related
collateral without the written consent of Purchaser and that any
monies paid on the Note will reduce the amount due from Purchaser
by the same amount.
6. In the event either party seeks enforcement of this agreement by court
action, the prevailing party's reasonable legal and court costs shall
be paid by the other party.
7. This agreement shall be governed by the laws of the State of Georgia.
8. This agreement is subject to approval by the Maker of the Note of its
assignment to Purchaser.
IN WITNESS WHEREOF, the parties have executed this document as of the date
first above written.
Killearn, Inc. "Sellers"
/s/ O. Mason Hawkins
O.MASON HAWKINS
/s/ Ann Butterfield Hawkins
ANN BUTTERFIELD HAWKINS
/s/ W. Reid Sanders
W. REID SANDERS
(d) - PROXY STATEMENT OF KILLEARN PROPERYIES, INC
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(A)
of the Securities Exchange Act of 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ]Preliminary proxy statement [ ]Confidential, For Use of the
[X]Definitive proxy statement Commission only (as permitted by
[ ]Definitive additional materials Rule 14a-6(e)(2))
[ ]Soliciting material pursuant to Rule
14a-11(c) or Rule 14a-12
KILLEARN PROPERTIES, INC.
(Name of Registrant as Specified in Its Charter)
KILLEARN PROPERTIES, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[ ]No fee required.
[ ]Fee computed on the table below per Exchange Act Rules 14a-6(i)(1)and 0-11.
(1) Title of each class of securities to which transaction applies:
Common Stock, par value $.10 per share ("Common Stock"), of Killearn
Properties, Inc.
(2) Aggregate number of securities to which transaction applies:
661,279 shares of Common Stock:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11(set forth the amount on which the
filing fee is calculated and state how it was determined):
$5.50 per share in cash-out merger.
(4) Proposed maximum aggregate value of transaction:
$3,637,034.50
(5) Total fee paid: $727.41
[X] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11 (a) (2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date Filed:
KILLEARN PROPERTIES, INC.
385 Country Club Drive
Stockbridge, Georgia 30281
July 16, 1999
Dear Shareholders:
You are cordially invited to attend a special meeting of shareholders of
Killearn Properties, Inc. ("Killearn") to be held on August 9, 1999 at
the Corporate offices located at 385 Country Club Drive, Stockbridge, Georgia,
10:00 a.m. local time.
At this special meeting, you will be asked to consider and vote to approve
the Agreement and Plan of Merger among Killearn, Killearn Development, Inc., a
wholly-owned subsidiary of Killearn, Inc., and Killearn, Inc. (the "Purchaser").
The Purchaser is owned and controlled by J.T. Williams, Jr. and David K.
Williams, who are both officers and directors of Killearn, and John R.
Williams and J.T. Williams, III, who along with David Williams are all sons of
J.T. Williams, Jr. (J.T. Williams, Jr. and his sons are referred to herein as
the "Williams Family"). Pursuant to the agreement and plan of merger, the
Purchaser will acquire all of the capital stock of Killearn in a merger. As a
result of the merger, Killearn's shareholders (other than the Purchaser and
the Williams Family) will be entitled to receive $5.50 in cash for each of their
shares of common stock.
The merger cannot be completed unless the agreement and plan of merger is
approved by shareholders holding a majority of the outstanding shares of
Killearn common stock. The Purchaser and the executive officers of Killearn,
who beneficially own, in the aggregate, approximately 26.7% of the outstanding
shares of Killearn common stock entitled to vote at the special meeting, have
agreed to vote their shares of Killearn common stock in favor of the agreement
and plan of merger in the same proportion as the other shareholders of
Killearn. As a result, a vote of a majority of the unaffiliated shareholders
is required to approve the merger. Completion of the merger is also subject to
the satisfaction of several other conditions. Accordingly, if shareholders
approve the merger, there can be no assurance the merger will be completed.
The agreement and plan of merger has been unanimously approved by
Killearn's Board of Directors, acting on the unanimous recommendation of an
independent special committee of the Board of Directors. In connection with
their evaluation of this agreement, the Board of Directors on behalf of the
special committee engaged American Express Tax & Business Services, Inc. to
act as financial advisor to the special committee. American Express Tax &
Business Services, Inc. has rendered a fairness opinion dated May 10, 1999 to
the special committee to the effect that, as of such date and based upon and
subject to the assumptions, limitations and qualifications set forth in such
opinion, the cash consideration of $5.50 per share to be received by Killearn's
shareholders (other than the Purchaser and the Williams Family) in the merger
is fair from a financial point of view to such shareholders. American Express
Tax & Business Services, Inc.'s opinion is attached as Appendix B to the
accompanying proxy statement. We recommend that you read American Express
Tax & Business Services, Inc.'s opinion in its entirety.
The special committee and the Board of Directors believe that the terms of
the agreement and plan of merger are fair to and in the best interests of
Killearn's shareholders (other than the Purchaser and the Williams Family) and
unanimously recommend that the shareholders approve and adopt the agreement and
plan of merger.
The accompanying proxy statement explains the agreement and plan of merger
and the proposed merger and provides specific information about the parties
involved and their interests. Please read this document carefully.
Please give all this information your careful attention. Whether or not
you plan to attend, it is important that your shares are represented at the
special meeting. A failure to vote will count as a vote against the merger.
Accordingly, you are requested to promptly complete, sign and date the
enclosed proxy card and return it in the envelope provided, whether or not you
plan to attend the special meeting. This will not prevent you from voting
your shares in person if you subsequently choose to attend the special meeting.
Sincerely,
Mallory E. Horne
Chairman of the Board
KILLEARN PROPERTIES, INC.
385 Country Club Drive
Stockbridge, Georgia 30281
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 9, 1999
_________________________
A special meeting of shareholders of Killearn Properties, Inc., a Florida
corporation ("Killearn"), will be held on August 9, 1999 at its corporate
offices at 385 Country Club Drive, Stockbridge, GA, local time, at 10:00 a.m.,
for the following purposes:
1. To consider and vote upon a proposal to approve the Agreement and
Plan of Merger (the "Merger Agreement") dated May 10, 1999 among Killearn,
Killearn Development, Inc. ("Merger Sub"), a Georgia corporation formed by
Killearn, Inc., and Killearn, Inc. (the "Purchaser"). The Purchaser is owned
and controlled by J.T. Williams, Jr. and David K. Williams, who are both
officers and directors of Killearn, and John R. Williams and J.T. Williams,
III, who along with David K. Williams are all sons of J.T. Williams, Jr.
(J.T. Williams, Jr. and his sons are referred to herein as the "Williams
Family"). Pursuant to the Merger Agreement, Killearn will be merged with and
into Merger Sub pursuant to which the holders of Killearn common stock (other
than the Purchaser and the Williams Family) will be entitled to receive $5.50
in cash for each of their shares of Killearn common stock outstanding at the
time of the merger. A copy of the Merger Agreement is attached as Appendix A to
and is described in the accompanying proxy statement.
2. To consider and act upon such other matters as may properly come
before the special meeting or any adjournment or postponement thereof.
Shareholders of record of Killearn common stock at the close of business on
June 15, 1999, will be entitled to notice of, and to vote at, the special
meeting or any adjournment or postponement thereof. A list of shareholders
will be available for inspection for ten days preceding the special meeting at
the office of the Secretary of Killearn, 385 Country Club Drive, Stockbridge,
Georgia 30281, and will be available for inspection at the meeting itself.
Approval of the Merger Agreement and the merger will require the affirmative
vote of the holders of a majority of the shares of Killearn common stock
outstanding on the record date. A form of proxy and a proxy statement
containing more detailed information about the matters to be considered at the
special meeting accompany and form a part of this notice.
By order of the Board of Directors,
Becky Christian
Secretary
Stockbridge, Georgia
July 16, 1999
Whether or not you plan to attend the special meeting, please complete,
sign and date the enclosed proxy card and return it promptly in the enclosed
envelope, which requires no postage if mailed in the United States. Please do
not send in any certificates for your shares at this time.
KILLEARN PROPERTIES, INC.
385 Country Club Drive
Stockbridge, Georgia 30281
PROXY STATEMENT
FOR
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 9, 1999
This proxy statement is furnished to shareholders of Killearn Properties,
Inc., a Florida corporation ("Killearn"), in connection with the solicitation
of proxies by the Board of Directors of Killearn for use at the special
meeting of shareholders to be held on August 9, 1999 at 10:00 a.m.,
local time, at its corporate offices at 385 Country Club Drive, Stockbridge,
Georgia, and at any adjournment or postponement thereof. Proxies in the form
enclosed will be voted at the special meeting, if properly executed, returned
to Killearn prior to the meeting and not revoked. This proxy statement and
the enclosed proxy card are first being mailed to shareholders of Killearn on
or about July 16, 1999.
At the special meeting, holders of Killearn common stock will be asked to
consider and vote upon a proposal to approve the Agreement and Plan of
Merger (the "Merger Agreement") dated May 10, 1999 among Killearn,
Killearn Development, Inc. ("Merger Sub"), a Georgia corporation and
wholly-owned subsidiary of Killearn, Inc., and Killearn, Inc. (the
"Purchaser"). The Purchaser is owned and controlled by J.T. Williams, Jr.
and David K. Williams, who are both officers and directors of Killearn,
and John R. Williams and J.T. Williams, III, who along with David K.
Williams are all sons of J.T. Williams, Jr. (J.T. Williams, Jr. and his
sons are referred to herein as the "Williams Family"). Pursuant to
the Merger Agreement, Killearn will be merged with and into Merger Sub
(the "Merger") and the holders of Killearn common stock (other than the
Purchaser and the Williams Family) will be entitled to receive
$5.50 in cash for each of their shares of Killearn common stock
outstanding at the time of the Merger.
A copy of the Merger Agreement is attached as Appendix A to and is
described in this proxy statement.
The Merger cannot be completed unless the Merger Agreement is approved
by the holders of a majority of the shares of Killearn common stock. The
Purchaser and the executive officers of Killearn, who beneficially own, in
the aggregate, approximately 26.7% of the outstanding shares of Killearn
common stock entitled to vote at the special meeting, have agreed to vote
their shares of Killearn common stock in favor of the Merger Agreement in the
same proportion as the other shareholders of Killearn. As a result, a vote
of a majority of the unaffiliated shareholders is required to approve the
Merger. Completion of the Merger is also subject to the satisfaction of
several other conditions. Accordingly, even if shareholders approve and
adopt the Merger Agreement, there can be no assurance that the Merger will be
completed.
The accompanying proxy, unless the shareholder otherwise specifies in the
proxy, will be voted (i) for adoption and approval of the Merger Agreement and
(ii) at the discretion of the proxy holders on any other matter that may
properly come before the meeting or any adjournment or postponement thereof.
Where shareholders have appropriately specified how their proxies are to be
voted, they will be voted accordingly. If any other matter or business is
properly brought before the special meeting, the proxy holders may vote the
proxies in their discretion. The Board of Directors does not know of any such
other matter or business.
No person has been authorized to give any information or make any
representation other than those contained in this proxy statement, and, if
given or made, such information or representation must not be relied upon as
having been authorized. This proxy statement does not constitute a
solicitation of a proxy in any jurisdiction from any person to whom it is
unlawful to make such proxy solicitation in such jurisdiction. The delivery
of this proxy statement shall not, under any circumstances, create any
implication that there has been no change in the affairs of Killearn since the
date hereof or that the information contained herein is correct as of any time
subsequent to its date.
The Merger has not been approved or disapproved by the Securities and
Exchange Commission nor has the Commission passed upon the fairness or merits
of such transactions nor upon the accuracy or adequacy of the information
contained in this document. Any representation to the contrary is unlawful.
TABLE OF CONTENTS
Questions and Answers About the Merger i
Who Can Help Answer Your Questions iv
Cautionary Statement Concerning Forward-Looking Information v
Summary 1
The Companies 1
The Merger 2
The Special Meeting 2
Record Date; Voting Power; Quorum 2
Vote Required; Security Ownership of Management 3
Fairness of the Merger to the Unaffiliated Shareholders 3
Recommendations of the Board of Directors and Special Committee 3
Opinion of Financial Advisor 4
Conflicts of Interest 4
Federal Income Tax Consequences 4
Accounting Treatment 5
Dissenters' Appraisal Rights 5
Financing of the Merger 5
The Merger Agreement 5
Regulatory Approvals 7
Market Prices for Common Stock and Dividends 7
Summary Financial Information 8
Certain Projections of Future Operating Results 9
Special Factors 9
Background of the Merger 9
Recommendations of the Special Committee and Board of Directors 11
Purchaser's and the Williams Family's Purpose and Reasons for the
Merger 15
Opinion of Financial Advisor 15
Conflicts of Interest 15
The Special Meeting 20
Date, Time and Place 20
Record Date; Voting Power; Quorum 20
Vote Required; Security Ownership of Management 20
Proxies 21
Solicitation of Proxies 21
The Merger 21
Financing 22
Federal Income Tax Consequences 23
Accounting Treatment 24
Dissenters' Appraisal Rights 25
Delisting and Deregistration of Common Stock 25
Regulatory Approvals 25
The Merger Agreement 25
Overview 25
Exchange of Certificates Representing Common Stock 26
Representations and Warranties 26
Conduct of Business Pending the Merger 27
No Solicitation 27
Indemnification 28
Directors' and Officers' Liability Insurance 28
Conditions to the Merger 29
Termination of Merger Agreement 29
Fees and Expenses 30
Estimated Fees and Expenses of the Merger 30
Certain Information Concerning Merger Sub, the Purchaser and Other
Affiliates 31
Beneficial Ownership of Common Stock 32
Independent Public Accountants 33
Documents Incorporated By Reference 33
Available Information 34
APPENDIX A - Agreement and Plan of Merger
APPENDIX B - Opinion of American Express Tax & Business Services, Inc.
APPENDIX C - Transactions involving Killearn's Common Stock effected by the
Purchaser and other Affiliates since May 1, 1997.
QUESTIONS AND ANSWERS ABOUT
THE MERGER
Q: What will happen in the Merger?
A: Killearn will be merged with and into Merger Sub, with the Merger Sub
continuing as the surviving corporation and as a wholly-owned subsidiary of
Purchaser. As a result of the Merger, all of your shares of common stock will
be automatically converted into the right to receive a cash payment of $5.50
per share.
Q: Who will own Killearn after the Merger?
A: After the Merger, Killearn will become a privately held company owned by
the Purchaser. The Purchaser is owned by the Williams Family.
Q: By voting in favor of the Merger Agreement, what am I approving?
A: If you vote in favor of the Merger Agreement, you will be directly
approving the Merger of Killearn with and into the Merger Sub.
Q: What will I receive in the Merger?
A: You will receive $5.50 in cash, without interest, for each share of your
Killearn common stock. This is the "Merger Consideration." For example:
If you own 100 shares of Killearn common stock, upon completion of the Merger
you will receive $5.50 in cash.
Q: How many votes are required to approve and adopt the Merger Agreement?
A. Approval of the Merger Agreement requires the affirmative vote of a
majority of the shares of Killearn common stock outstanding as of the record
date. Therefore, a failure to vote or a vote to abstain will have the same
effect as a vote against the Merger Agreement.
Q: When and where is the special meeting?
A: The special meeting will take place on August 9, 1999, at 10:00 a.m.
local time, at Killearn's offices at 385 Country Club Drive, Stockbridge,
Georgia.
Q: Why is the special committee and Board of Directors recommending that I
vote to approve and adopt the Merger Agreement?
A: In the opinion of the special committee and the Board of Directors, the
terms and provisions of the Merger Agreement are fair to and in the best
interest of Killearn's shareholders (other than the Purchaser and the
Williams Family). To review the background and reasons for the Merger in
greater detail, see pages ___through ___.
Q: When do you expect the Merger to be completed?
A: We are working to complete the Merger by the middle of August 1999.
Q: What are the tax consequences of the Merger to me?
A: There will be tax consequences of the Merger to you. The receipt of the
cash merger consideration by you for your Killearn common stock will be a
taxable transaction for federal income tax purposes. To review your potential
tax consequences in greater detail, see pages __ through __.
The tax consequences of the Merger will depend on your personal situation.
You should consult your tax advisor for a full understanding of the tax
consequences of the Merger to you.
Q: What do I need to do now?
A: Just indicate on your proxy card how you want to vote, and sign and mail
it in the enclosed envelope as soon as possible, so that your shares will be
represented at the meeting. If you sign and send in your proxy card and do
not indicate how you want to vote, your proxy will be counted as a vote for
the Merger Agreement. If you fail to return your proxy card or to vote at the
special meeting, the effect will be a vote against the Merger Agreement.
Q: If my shares are held in "street name" by my broker, will my broker vote
my shares for me?
A: Your broker will vote your shares of Killearn common stock only if you
provide instructions on how to vote. You should instruct your broker how to
vote your shares, following the directions your broker provides to you. If
you do not provide instructions to your broker, your shares will not be voted
and they will not be counted as votes against the Merger Agreement. However,
the effect of not voting your shares will be a vote against the Merger
Agreement.
Q: Can I change my vote or revoke my proxy after I have mailed my signed
proxy card?
A: You can change your vote at any time before your proxy is voted at the
special meeting. You can do this in one of three ways. First, you can send a
written notice stating that you would like to revoke your proxy. Second, you
can complete and submit a new proxy card. If you choose either of these
methods, you must timely submit your notice of revocation or your new proxy
card to Killearn. Third, you can attend the special meeting and vote in
person. Simply attending the special meeting, however, will not revoke your
proxy. If you have instructed a broker to vote your shares, you must follow
directions received from your broker to change your vote.
Q: Should I send in my stock certificates now?
A: No. After the Merger is completed, we will send you written instructions
for exchanging your common stock certificates for the cash merger
consideration.
WHO CAN HELP ANSWER YOUR QUESTIONS
If you would like additional copies of this document, or if you would like
to ask any additional questions about the Merger, you should contact
Killearn's Chief Financial Officer: William E. Daniels, Jr. at (770) 389-2020
or at Killearn Properties, Inc., 385 Country Club Drive, Stockbridge, Georgia
30281.
CAUTIONARY STATEMENT CONCERNING
FORWARD-LOOKING INFORMATION
THIS PROXY STATEMENT AND OTHER STATEMENTS MADE FROM TIME TO TIME BY
KILLEARN CONTAIN CERTAIN FORWARD-LOOKING STATEMENTS. THOSE STATEMENTS INCLUDE
STATEMENTS REGARDING THE INTENT, BELIEF, OR CURRENT EXPECTATIONS OF KILLEARN,
AS WELL AS THE ASSUMPTIONS ON WHICH SUCH STATEMENTS ARE BASED. SUCH FORWARD-
LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE RISKS
AND UNCERTAINTIES, AND ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE
CONTEMPLATED BY SUCH FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS CURRENTLY
KNOWN TO THE MANAGEMENT OF KILLEARN THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE IN FORWARD-LOOKING STATEMENTS INCLUDE, BUT ARE NOT
LIMITED TO, THE RISKS DETAILED HEREIN AND: (I) COMPETITIVE PRESSURES IN THE
REAL ESTATE MARKETS IN WHICH KILLEARN OPERATES; (II) THE ABILITY OF KILLEARN
TO ACQUIRE, DEVELOP, AND MARKET NEW REAL ESTATE DEVELOPMENTS; (III) KILLEARN'S
BUSINESS AND GROWTH STRATEGIES; AND (IV) GENERAL ECONOMIC CONDITIONS. EXCEPT
FOR ITS ONGOING OBLIGATIONS TO DISCLOSE MATERIAL INFORMATION AS REQUIRED BY
THE FEDERAL SECURITIES LAWS, KILLEARN DOES NOT UNDERTAKE AN OBLIGATION TO
UPDATE OR REVISE FORWARD-LOOKING STATEMENTS TO REFLECT CHANGES IN ASSUMPTIONS,
THE OCCURRENCE OF UNANTICIPATED EVENTS, OR CHANGES IN FUTURE OPERATING RESULTS
OVER TIME.
SUMMARY
This summary highlights selected information from the proxy statement but
may not contain all of the information that is important to you. To
understand the Merger Agreement and the Merger fully, you should read this
entire document carefully, as well as the additional documents to which we
refer you. See "Where You Can Find More Information" on page ___. The Merger
Agreement is attached as Appendix A to this proxy statement. We encourage you
to read the Merger Agreement as it is the legal document that governs the
Merger. We have included page references parenthetically, where applicable,
to direct you to a more complete description of the topics in this summary.
The Companies
Killearn Properties, Inc.
385 Country Club Drive
Stockbridge, Georgia 30281
(770) 389-2020
Killearn is engaged in the development of planned communities. Killearn is
currently developing a planned community named the Eagle's Landing. Eagle's
Landing comprises approximately 3,000 acres in Henry County, Georgia and is
approximately 23 miles south of downtown Atlanta and 15 miles south of the
Atlanta International Airport.
This "mixed use" development is presently zoned to allow development in
the categories of office, industrial, retail, multi-family residential, single-
family residential, lodging, schools, municipal services, religious
institutions, parks and recreation, golf course, open space and lakes. The
community is planned around Eagle's Landing golf course and country club,
which was originally developed by Killearn, but is now owned by the Purchaser.
At June 30, 1999, approximately 1778 residential lots and 1600 acres of
other property had been sold by Killearn in Henry County, Georgia. At that
date, approximately 614 platted residential lots remained to be sold and
approximately 570 acres of other property remained to be platted and sold. In
addition, Killearn had, as of June 30, 1999, approximately 40 acres, which
will be used for road right-of-way, utility easements and green areas.
Killearn, Inc. and Killearn Development, Inc.
1570 Rock Quarry Road
Stockbridge, Georgia 30281
The Merger Sub is a wholly-owned subsidiary of the Purchaser. The
Purchaser will acquire Killearn in the Merger. The Purchaser is owned and
controlled by the Williams Family.
The ownership of the Purchaser is set forth in "Questions and Answers
about the Merger-Who will own Killearn after the Merger?" on page ___. For
further information about the Purchaser, see "Certain Information concerning
Merger Sub, the Purchaser and other Affiliates" beginning on page ____.
The Merger (Page__)
Mechanics of the Merger. In the Merger:
Killearn will be merged into Merger Sub with the Merger Sub continuing as
the surviving corporation (the "Surviving Corporation"); and
each share of Killearn's common stock (other than shares owned by the
Purchaser and the Williams Family) will be converted into the
right to receive $5.50 in cash, without interest; and
Consequences of the Merger. As a result of the Merger:
the entire equity interest in Killearn will be owned by the Purchaser;
the unaffiliated shareholders of Killearn will no longer have any interest
in, and will not be shareholders of Killearn, and therefore will not
participate in its future earnings and growth;
J. T. Williams, Jr. and David K. Williams, officers and directors of
Killearn, through their ownership of the Purchaser, will have the
opportunity to benefit from any earnings and growth of Killearn, and will
bear the risk of any decrease in Killearn's value; and
Killearn's common stock will no longer be traded on the American Stock
Exchange, price quotations will no longer be available and the
registration of Killearn's common stock under the Exchange Act, will be
terminated. After such registration is terminated, Killearn will no longer
be required to file periodic reports with the Commission.
The Special Meeting (Page __)
The special meeting will be held on August 9, 1999, at 10:00 a.m.,
local time, at Killearn's offices at 385 Country Club Drive, Stockbridge,
Georgia. At the special meeting, the shareholders of Killearn will be asked
to consider and vote upon a proposal to approve and adopt the Merger Agreement.
Record Date; Voting Power; Quorum (Page ___)
Shareholders of record of Killearn common stock at the close of business
on June 15, 1999 are entitled to notice of and to vote at the special
meeting. As of the record date, there were 887,412 shares of Killearn common
stock issued and outstanding held by approximately 500 holders of record.
Holders of record of Killearn common stock on the record date are entitled
to one vote per share on any matter that may properly come before the special
meeting.
The representation, in person or by proxy, of at least a majority of the
outstanding shares of Killearn common stock entitled to vote at the special
meeting is necessary to constitute a quorum for the transaction of business.
Vote Required; Security Ownership of Management (Page __)
Under Florida law, the affirmative vote of the holders of a majority of
the shares of Killearn common stock outstanding on the record date for the
special meeting is required to approve the Merger Agreement. However, the
Purchaser and each of the executive officers and directors of Killearn have
agreed to vote their shares in favor of the Merger Agreement in the same
proportion as the other shareholders of Killearn. As a result, a vote of a
majority of the unaffiliated shareholders is required to approve the Merger.
For purposes of determining whether the Merger Agreement has received a
majority vote, abstentions and broker non-votes (shares held in "street name"
through a broker or other nominee as to which voting instructions with regards
to the Merger Agreement have not been received from the beneficial owners and
such broker or other nominee is not permitted to exercise voting discretion
with regards to the Merger Agreement) will not be included in the vote total,
although an abstention and a broker non-vote will have the effect of a vote
against the Merger Agreement. Abstentions and broker non-votes will, however,
be counted for determining whether there is a quorum.
As of the record date for the special meeting, Killearn's executive
officers and directors owned, in the aggregate, 237,133 shares of Killearn
common stock or 26.7% of the shares of Killearn common stock then outstanding.
Fairness of the Merger to the Unaffiliated Shareholders
Prior to their offer to merge with Killearn, the Purchaser and the Williams
Family determined that the proposed merger transaction, including the cash
consideration of $5.50 per share, was fair and reasonable to the unaffiliated
shareholders of Killearn. For a more complete discussion of the factors that
contributed to their determination, refer to "Special Factors - Background"
page ___.
Based on a number of factors, including analysis of the merger consideration
and the terms and conditions of the Merger Agreement, the special committee
and the Board of Directors have each determined that the terms of the Merger
Agreement, which were established through arm's-length negotiations with the
Purchaser, and the Merger, are fair to, and in the best interests of,
Killearn and its unaffiliated shareholders. For a more complete discussion
of the factors analyzed by the special committee and the Board of Directors,
see "Special Factors - Recommendations of the Board of Directors
and special committee" page ___.
American Express Tax & Business Services, Inc. has delivered its
written opinion to the special committee to the effect that, as of May 10,
1999, the cash merger consideration is fair, from a financial point of view,
to Killearn's unaffiliated shareholders. For a more complete discussion of
the analysis and valuation techniques used by American Express, see
"Special Factors - Opinion of Financial Advisor" page ___.
Recommendations of the Board of Directors and special committee (Page __)
Because of the potential conflicts of interests of two members of the
Board of Directors of Killearn who are owners of the Purchaser, the Board
established a special committee to act on behalf of the unaffiliated
shareholders of Killearn for the purpose of negotiating the price and other
terms of the Merger with the Purchaser and evaluating the fairness of the
Merger Agreement. The special committee is composed of Mallory E. Horne and
Melvin L. Pope, Jr., both of whom are independent directors.
The special committee and the Board of Directors have each determined that
the terms of the Merger Agreement, which were established through arm's-length
negotiations with the Purchaser and the Merger, are fair to, and in the best
interests of, Killearn and its shareholders (other than the Purchaser and
the Williams Family). Accordingly, the special committee and the Board
of Directors have unanimously approved the Merger Agreement and unanimously
recommend that Killearn's shareholders vote for approval and adoption of the
Merger Agreement.
Opinion of Financial Advisor (Page __)
American Express Tax & Business Services, Inc. has delivered its written
opinion to the special committee to the effect that, as of May 10, 1999, the
cash merger consideration is fair, from a financial point of view, to
Killearn's shareholders (other than the Purchaser and the Williams Family).
A copy of American Express Tax & Business Services, Inc.'s opinion, setting
forth the assumptions made, procedures followed, matters considered, and
limitations on and scope of the review by American Express Tax & Business
Services, Inc., is attached as Appendix B to this proxy statement. You are
encouraged to read such opinion in its entirety.
Conflicts of Interest (Page ___)
In considering the recommendations of the special committee and the Board
of Directors, shareholders should be aware that J.T. Williams, Jr. and
David K. Williams, who are both officers and directors of Killearn, have
interests in the Merger that are different from the interests of Killearn
shareholders generally and which may create potential conflicts of interest.
The Purchaseris owned entirely and controlled by J.T. Williams, Jr. and his
three sons, David K. Williams, John R. Williams and J.T. Williams, III.
The Purchaser will own 100% of the Surviving Corporation's outstanding common
stock. Theownership of the Purchaser by J.T. Williams, Jr. and his three sons,
David K.Williams, John R. Williams and J.T. Williams, III may have presented
J. T. Williams, Jr. and David K Williams with actual or potential conflicts of
interest in connection with the Merger.
Indemnification (Page ___)
The Merger Agreement provides for indemnification and liability insurance
arrangements for the current officers and directors of Killearn.
Federal Income Tax Consequences (Page ___)
There will be tax consequences of the Merger to the holders of Killearn
common stock. The receipt of cash by a shareholder in exchange for his or her
shares of Killearn common stock pursuant to the Merger will constitute a
taxable transaction to such shareholder for federal income tax purposes and
may also be a taxable transaction under applicable state, local and foreign
tax laws. In general, a shareholder will recognize gain or loss equal to the
difference between $5.50 per share and such shareholder's adjusted tax basis
in the shares exchanged.
All shareholders should read carefully the tax discussion in "The Merger-
Federal Income Tax Consequences" beginning on page ___. They are urged to
consult their own tax advisors as to the specific consequences to them of the
Merger under federal, state, local and any other applicable tax laws.
Accounting Treatment (Page ___)
Killearn expects that the Merger will be treated as a recapitalization for
accounting purposes because it will not constitute a change of control under
generally accepted accounting principles. As a result, the historical cost
basis of Killearn's assets and liabilities will not change.
Dissenters' Appraisal Rights (Page ___)
Killearn shareholders are not entitled under Florida law or Killearn's
articles of incorporation to exercise dissenters' appraisal rights in
connection with the Merger.
Financing of the Merger (Page ___)
The total amount of funds necessary to fund the Merger is expected to be
approximately $3.6 million. These funds are expected to come from the
following sources:
the 315,430 shares of Killearn common stock owned by Wimberly
Investment Funds, L.P. will be paid for by the cancellation of $1,734,865
(or $5.50 per share) of the indebtedness (including accrued and unpaid
interest) owed by Wimberly to the Purchaser;
the 132,000 shares of Killearn common stock owned by Proactive
Technologies, Inc. will be paid for by the cancellation of $726,000
(or $5.50 per share) of the indebtedness (including accrued and unpaid
interest) owed by PTI to the Purchaser;
approximately $900,000 will be borrowed by the Purchaser from American
Century Bank pursuant to an existing line of credit; and
The balance of the Merger consideration will be paid with cash of the
Purchaser on hand at the effective time of the Merger estimated to be
approximately $250,000.
The Merger Agreement (Page ___)
Conditions of the Merger (Page ___)
Each party's obligation to effect the Merger is subject to the
satisfaction of a number of conditions, most of which may be waived. The most
significant condition to consummating the Merger includes the approval and
adoption of the Merger Agreement by the holders of a majority of the shares of
Killearn common stock.
No Solicitation (Page ___)
The Merger Agreement prohibits Killearn, its subsidiaries, and any of
Killearn's or its subsidiaries' directors, officers, employees, agents or
representatives from directly or indirectly:
initiating, soliciting, or encouraging any inquiries, discussions or
making any proposal with a third party with respect to any merger,
consolidation or other business combination involving Killearn or any
acquisition of any kind of a material portion of the assets or capital
stock of Killearn or its subsidiaries (a "Takeover Proposal"); or
negotiating, exploring or otherwise communicating in any way with any
third party with respect to any Takeover Proposal or entering into or
consummating any agreement arrangement or understanding requiring it to
abandon, terminate or fail to consummate the Merger.
The Merger Agreement permits Killearn, prior to the special meeting, to
consider an unsolicited Takeover Proposal and to enter into an agreement with
respect to a Takeover Proposal if the following conditions are met: (a) the
special committee of the Killearn Board of Directors determines in good faith
by a majority vote based upon the advice of its outside counsel that the Board
is required to do so by its fiduciary obligations and (b) the Purchaser has
been notified of the Takeover Proposal by Killearn.
Termination (Page ___)
The Merger Agreement may be terminated and the Merger abandoned, at any
time prior to the effective time of the Merger, whether before or after
approval by Killearn's shareholders:
by the mutual written consent of Killearn and the Purchaser;
by either Killearn or the Purchaser if the Merger has not been
consummated by December 31, 1999, unless the failure by the
terminating party to fulfill any obligation under the Merger
Agreement caused or resulted in the failure of the Merger to be
consummated by December 31, 1999;
by either the Purchaser or Killearn if Killearn's Board of Directors
or any committee thereof withdraws or modifies or refrains from
giving its approval or recommendation of the Merger Agreement or the
Merger;
automatically, without action by any party thereto, if the Killearn
shareholders do not approve the Merger Agreement at the special
meeting;
by either Killearn or the Purchaser if the other party breaches any
of its representations, warranties and agreements under the Merger
Agreement and such breach is not cured within 10 days of notice; or
by Killearn subsequent to a Takeover Proposal if its special
committee determines in good faith by a majority vote based upon the
advice of its outside counsel that the Board is required to do so by
its fiduciary obligations, and after it notifies the Purchaser of the
Takeover Proposal.
Fees and Expenses (Page __)
Killearn and the Purchaser will pay their own fees, costs and expenses
incurred in connection with the Merger Agreement (except that Killearn will
bear all expenses incurred in connection with this proxy statement).
Regulatory Approvals (Page __)
Killearn is not aware of any material governmental or regulatory approvals,
which are required for consummation of the Merger.
Market Prices for Common Stock and Dividends
Killearn's common stock is traded on The American Stock Exchange, Inc.
under the symbol "KPI." The following table sets forth for the fiscal quarter
indicated the high and low closing bid prices per share of Killearn's common
stock as reported by the AMEX:
Fiscal Year ended April 30, 1998 High Low
First Quarter $5.63 $4.50
Second Quarter $10.83 $5.50
Third Quarter $9.83 $7.00
Fourth Quarter $9.00 $7.83
Fiscal Year ended April 30, 1999
First Quarter $9.75 $8.38
Second Quarter $10.50 $9.38
Third Quarter $9.63 $4.00
Fourth Quarter $5.38 $4.50
Fiscal Year ended April 30, 2000
First Quarter (through July 12, 1999) $5.38 $4.81
On April 20, 1999, the last trading day prior to the announcement of the
Board's preliminary approval of the Merger, the closing price per share of
Killearn's common stock as reported by AMEX was $4.50. On July 12, 1999,
the closing price per share of Killearn's common stock as reported by AMEX was
$5.38.
Killearn has never paid cash dividends on its common stock.
On the record date for the special meeting, there were approximately 500
holders of record of Killearn's common stock.
Shareholders should obtain current market price quotations for Killearn's
common stock in connection with voting their shares of common stock.
SUMMARY FINANCIAL INFORMATION
The following tables set forth selected financial information for Killearn
for each of the five fiscal years in the period ended April 30, 1998 and for
the nine months ended January 31, 1998 and January 31, 1999. Such information
should be read in conjunction with the historical financial statements of
Killearn and the notes thereto which are incorporated by reference into this
proxy statement. Selected financial information for Killearn as of and for the
nine months ended January 31, 1998 and January 31, 1999 has been derived from
the unaudited historical financial statements of Killearn and, in the opinion
of Killearn's management, includes all adjustments (consisting only of normal
recurring adjustments) that are considered necessary for a fair presentation
of the operating results for such interim periods. Results for the interim
periods are not necessarily indicative of results for the full year.
<TABLE>
<CAPTION>
Unaudited
Year Ended Nine Months Ended
_____________________________________________________________ ______________________
April 30, April 30, April 30, April 30, April 30 January 31 January 31
1994 1995 1996 1997 1998 1998 1999
_________ _________ _________ _________ _________ _________ _________
(in thousands, except earnings per share)
<S> <C> <C> <C> <C> <C> <C> <C>
Total revenues $ 17,821 $ 17,896 $ 16,044 $ 13,194 $ 13,852 $ 11,866 $ 14,475
Operating income 278 1,001 1,960 1,834 921 657 734
Net income 287 621 1,277 1,095 301 410 440
Earnings per common share:
Basic .20 .43 .84 1.23 .34 .46 .50
Diluted .20 .43 .84 1.23 .34 .46 .50
Number of shares used in per share computations:
Basic 1439 1439 1439 887 887 887 887
Diluted 1439 1439 1439 887 887 887 887
Balance Sheet Data (End of Year):
Cash, cash equivalents and investments 683 666 324 269 366 262 324
Working capital 56,279 49,100 46,855 28,213 24,154 29,427 23,015
Total assets 61,151 54,662 55,914 32,812 29,323 33,511 27,493
Total current liabilities 4,872 5,562 9,059 4,599 5,169 4,084 4,478
Long-term debt, net of current portion 38,920 31,121 27,632 25,085 20,776 25,890 19,146
Total stockholders' equity $ 17,358 $ 17,979 $ 19,223 $ 3,127 $ 3,428 $ 3,537 $ 3,869
Unaudited
Year Ended Nine Month Ended
______________________ __________________________
April 30 April 30, January 31 January 31,
1997 1998 1998 1999
_________ _________ __________ __________
Book value per common share $3.52 $3.86 $3.99 $4.36
Common shares outstanding 887,412 887,412 887,412 887,412
</TABLE>
No Projections of Future Operating Results
The Purchaser was not provided with any non-public business or financial
information relating to Killearn, including any projections of Killearn's
future operating performance.
SPECIAL FACTORS
Background of the Merger
J.T. Williams, Jr. and David K Williams, two officers and directors of
Killearn, own directly, or through the Purchaser, as of July 1, 1999,
237,133 shares of Killearn common stock, constituting approximately 26.7%
of the issued and outstanding shares of Killearn common stock. These shares
were acquired from time to time in market transactions commencing in January
1998.
Twice in the last two years, Proactive Technologies, Inc. ("PTI") has
proposed transactions involving Killearn's outstanding stock. PTI is
currently, and in the past has been, a large shareholder of Killearn and the
maker of several promissory notes held by the Purchaser. See "The Merger -
Financing" on page __ and "Beneficial Ownership of Common Stock" on page __.
In addition, from October 1996 to August 1997, Mark A. Conner was Chairman of
the Board and President of both PTI and Killearn. Mr. Conner is no longer
associated with Killearn. From March 1997 to July 1997, David K. Williams, an
officer and director of Killearn, was Chief Financial Officer of both PTI and
Killearn. Mr. Williams ceased his association with PTI in July 1997.
On December 3, 1997, PTI offered to acquire all of the outstanding stock of
Killearn for $9.00 per share. Although Killearn convened a special committee
of the board of directors to consider this proposal, several conditions to the
proposed offer did not occur and the transacting was never consummated.
Then in February 1999, J.T. Williams, Jr., the Chairman of the Board of
The purchaser, was contacted by PTI. During the conversations held in
February 1999, PTI offered to sell to the Purchaser 132,000 shares of
Killearn common stock at a price of $6.50 per share. PTI indicated that the
sale would be subject to the approval of a group controlled by Mr. Mason
Hawkins and other creditors of PTI and who held the Killearn common stock as
collateral for certain loans. Without conducting a formal analysis of the
purchase price or valuation of Killearn's assets, the Purchaser preliminarily
agreed to these terms. In March 1999, PTI advised the Purchaser that PTI was
unable to secure Mr. Hawkins' approval to the proposed transaction and the
agreement to sell the Killearn common stock to the Purchaser was terminated.
In March 1999, Mr. Hawkins contacted the Purchaser and offered to sell the
Purchaser 132,000 shares of Killearn common stock. Mr. Hawkins did not
indicate a proposed sales price for the Killearn common stock. The Purchaser
declined Mr. Hawkins' offer, but offered instead to purchase the notes issued
by PTI in the aggregate principal amount of approximately $1,400,000
(including accrued and unpaid interest), which was secured by these shares,
for $1,150,000. The offer was accepted by Mr. Hawkins, subject to the consent
of PTI, which was required by the terms of the notes. PTI consented to the
transaction, and on March 24, 1999, the Purchaser acquired these notes from
the group controlled by Mr. Hawkins for an aggregate purchase price of
$1,150,000.
On March 9, 1999, Mr. Arthur Weiss, who is the Chairman of the Board of
PTI, requested a meeting with the Purchaser in order to discuss a two step
transaction among Killearn, a partnership controlled by Mr. Weiss, and the
Purchaser. The first step of the proposed transaction would require the
Purchaser to purchase substantially all of the assets of Killearn in exchange
for the Purchaser's shares of Killearn common stock valued at $5.50 per share)
, a promissory note issued to the Purchaser by PTI in the aggregate principal
amount of approximately $1,400,000 (including accrued and unpaid interest)
and the balance, if any, in a promissory note to be issued by the Purchaser.
In the second step, the partnership controlled by Mr. Weiss would contribute
to Killearn certain real estate assets in exchange for shares of Killearn
common stock (each valued at $5.50 per share). Mr. Weiss stated that his
purpose was to acquire the controlling interest of a public corporation which
owns viable real estate assets. Other than shares held by the Purchaser and
shares received by the partnership controlled by Mr. Weiss, the proposed
transactions would not affect Killearn common stock held by the other
shareholders. The Purchaser agreed to consider the proposed transaction.
On March 17, 1999, the Purchaser preliminarily agreed to Mr. Weiss'
proposed offer and presented it to Killearn. The Purchaser, Killearn and the
partnership controlled by Mr. Weiss executed a non-binding letter of intent,
which was specifically subject to approval by the board of directors and
shareholders of Killearn.
Between March 9, 1999 and March 26, 1999, the Purchaser and Killearn
further considered the proposal. The Purchaser and Killearn were unable to
agree upon which assets of Killearn were to be acquired by the Purchaser
and the value of these assets if acquired.
On March 19, 1999, Killearn's board of directors appointed a special
committee, consisting of Mallory E. Horne and Melvin L. Pope, Jr., to analyze
the terms of the proposed transaction among the Purchaser, the partnership
controlled by Mr. Weiss and Killearn, including analyzing the income tax
consequences of the proposed transaction to the shareholders of Killearn.
On March 26, 1999, the special committee of Killearn advised the Board of
Directors of Killearn that they would not recommend the proposed transaction
involving the partnership controlled by Mr. Weiss, the Purchaser and
Killearn. Based on the advice of its tax advisor, the special committee and
the Board determined that the sale of its assets to the Purchaser would force
Killearn to recognize a large taxable gain as a result of its low basis in
these assets. Therefore, the special committee and the Board determined that
the proposed transaction would not be in the best interest of Killearn's
shareholders.
After the Board's decision to reject the Weiss proposal, the Purchaser
and the Williams Family began considering a transaction whereby the Purchaser
would acquire all of the outstanding stock of Killearn. In early April 1999,
the Purchaser offered to purchase in a merger transaction all
of the shares of Killearn common stock not owned by the Purchaser or the
Williams Family for $5.50 per share. The price of $5.50 was determined by
the Purchaser and after considering of a number of factors. First, the then
current book value of the Killearn common stock was $4.36 per share.
Therefore, $5.50 per share represented a significant premium over Killearn's
book value. Second, the Purchaser and the Williams Family had acquired its
26.7% interest in Killearn during the past year and a half for an average
price of $4.99 per share. This suggested that the Purchaser and the Williams
Family had been able to make open market, arms-length purchases of Killearn
common stock and become a significant shareholder, mostly at prices below
$5.50 per share. Third, although the Killearn common stock had traded at
prices above $5.50 per share during certain periods in the last year, at the
time of the offer the market price was $4.50 per share. Fourth, the Purchaser
and the Williams Family calculated that the gross asset value of the land
owned by Killearn was approximately $50 million based on its estimates of
future land sales. The Purchaser and the Williams Family then concluded that
once this amount was discounted for bulk sales and the outstanding debt
attributable to these assets, it left a net asset value would be less than
$5.00 per share. In calculating these numbers, the Purchaser and the Williams
Family discounted the bulk sales by 10% per year for a five to six year sales
period which based on their experience was typical for property of this kind.
Fifth, the Purchaser and the Williams Family considered the previous firm
offers that had been presented to Killearn with respect to its stock. In
particular, they gave weight to the fact that Mr. Weiss had proposed a
transaction whereby he independently attributed a value of $5.50 per share to
the common stock of Killearn. They also noted, but distinguished, the prior
proposed transactions with PTI. Although in the first transaction, PTI
offered $9.00 per share, the deal could not be consummated at that price. In
addition, the transaction for $6.50 per share had only been an offer to sell
the Killearn common stock owned by PTI and the Purchaser had not conducted a
formal valuation or given a definitive acceptance of PTI's offer.
Neither the Purchaser nor the Williams Family considered a going concern
value of Killearn because of the late stage of development of Killearn's
properties. The Purchaser and the Williams Family also dismissed liquidation
values because the Purchaser and the Williams Family believed that a sale of
Killearn's properties in liquidation would generate a lower sales price, and,
therefore, a lower estimate of value of Killearn, than their previous
valuations.
Given their analysis, the Purchaser and the Williams Family believed that
the Merger and the merger consideration of $5.50 per share are fair to the
unaffiliated shareholders of Killearn. The Board of Directors agreed to
consider the proposed transaction with the Purchaser.
On April 19, 1999, the special committee of the Board met with
representatives of American Express Tax and Business Services Inc. to
discuss the Purchaser's proposal. American Express advised the special
committee that its preliminary opinion was that the proposed Merger was fair
from a financial point of view to the unaffiliated shareholders of Killearn.
It told the committee that it based its preliminary opinion upon valuations
of the company, its operation and prospects, including valuations based on
discounted cash flow analysis, market-to-book ratios, historical stock
performance and current trading prices. The special committee advised the
board immediately thereafter that subject to the receipt of a final fairness
opinion and the execution of definitive agreement, which would contain
customary terms and provisions and would require the receipt of shareholder
approval, that they would recommend the proposed transaction.
During the next several weeks, Killearn and the Purchaser and their
respective legal counsel, Greenberg Traurig, P.A. and Montello & Kenney,P.A.
negotiated the terms and conditions of a definitive Merger Agreement. The
parties negotiated the terms of particular representations, warranties and
covenants of each of the parties, as well as certain restrictions on Killearn
from negotiating other takeover proposals. The parties also negotiated the
indemnification provisions to be included in the definitive Merger Agreement.
On May 7, 1999, the special committee, together with representatives of
American Express and Greenberg Traurig, met to review the Purchaser's
proposal, including the negotiated Merger Agreement. Greenberg Traurig
summarized the material terms of the Merger Agreement for the special
committee. American Express then presented the special committee with an
analysis that it had performed to produce a range of implied values for
Killearn's common stock. American Express concluded by delivering an oral
opinion to the special committee, which it later confirmed in writing, that
the merger consideration to be received by Killearn's shareholders (other
than the Purchaser and the Williams Family) was fair from a financial point
of view to such shareholders. Based on American Express' opinion and valuation
analysis presented at the meeting and the proposed terms of the definitive
Merger Agreement, the special committee unanimously determined that the Merger
Agreement and the Merger are fair to, and in the best interest of, Killearn
and its unaffiliated shareholders, and recommended that the Board of Directors
approve the Merger Agreement and the Merger.
Immediately after the special committee's meeting, the Board of Directors
of Killearn met to receive the report of the special committee. At this
meeting, the special committee unanimously recommended that the Board of
Directors adopt and approve the Merger Agreement and the Merger. After
discussing the recommendation of the special committee and other factors, the
Board determined that the Merger Agreement and the Merger are fair to, and in
the best interest of, Killearn and its unaffiliated shareholders, and
unanimously adopted and approved the Merger Agreement and the Merger.
A more complete description of the factors considered by the special
committee and the Board of Directors is set forth under the caption
"Recommendations of the special committee and Board of Directors" on pages ___
through ___.
Recommendations of the special committee and Board of Directors
On May 7, 1999, the special committee unanimously determined that the
Merger Agreement and the Merger, are fair to, and in the best interests of,
Killearn and its unaffiliated shareholders, and recommended that the Board of
Directors approve and adopt the Merger Agreement and that it be recommended to
the shareholders of Killearn.
On May 7, 1999, the Board, based on the unanimous recommendation of the
special committee, unanimously determined that the Merger Agreement and the
Merger, are fair to, and in the best interests of, the unaffilliated
shareholders of Killearn, and recommended that the shareholders approve and
adopt the Merger Agreement.
During their deliberations, the special committee and Board of Directors
were assisted by their financial advisor, American Express Tax & Business
Services, Inc., and their legal counsel, Greenberg Traurig, P.A.
Special Committee Factors. In connection with its recommendation, the
special committee considered a number of factors, including, the following.
1. The special committee reviewed the historical market prices,
recent trading activity and the trading volume of Killearn's common stock.
Although these results were a factor in their recommendation, they were in no
way conclusive. Even though the trading price during the last 18 months had
exceeded $10.50 per share, the committee believed that these prices are not
reflective of the fair market value of Killearn common stock because of the
very small trading volume. The merger consideration of $5.50 per share
did, however, represent a premium of approximately 11.3% over the average
closing price of $4.94 during the 120 business days prior to May 7, 1999, the
date on which the special committee made its unanimous recommendation to the
Board.
2. The special committee was advised by American Express Tax &
Business Services, Inc. which made oral presentations to the special committee
at its April 19, 1999 and May 7, 1999 meetings, as to various financial
matters. The special committee was persuaded by American Express' discussion
with respect to the various valuations of Killearn and has adopted their
conclusions regarding such matters. More specifically, the special committee
was persuaded by the oral opinion of American Express Tax & Business
Services, Inc., later confirmed in writing, addressed and delivered to the
special committee on May 10, 1999, as to the fairness from a financial point
of view of the merger consideration to be received by Killearn's
shareholders (other than the Purchaser and the Williams Family) pursuant to
the Merger Agreement. A copy of American Express Tax & Business Services,
Inc.'s opinion, setting forth the assumptions made, matters considered and
limitations on the review undertaken in connection with such opinion, is
attached as Appendix B to this proxy statement and should be read carefully in
its entirety. Specifically, the special committee was persuaded by American
Express' comparable company market-to-book analysis and its discounted cash
flow analysis both finding the intrinsic value of Killearn to be very close to
the $5.50 per share offered by the Purchaser. In addition, the special
committee rejected liquidation values and values based on earnings or sales
analysis because they found, based on the analysis by American Express, that
these methodologies were ill-suited for valuing companies in late stages of a
real estate development cycle. See "Special Factors - Opinion of Financial
Advisor " on page ______.
3. The special committee received and considered information with
respect to the financial condition, results of operations, business and
prospects of Killearn, as well as the risks involved in achieving such
prospects, and the general economic and market conditions affecting Killearn.
They determined that most of Killearn's real estate projects are in the late
stages of development and will be fully developed and sold during the next
several years. Therefore, in order to continue the business as a going
concern, Killearn would have to identify, purchase and develop new tracts of
real estate. The development of these real estate tracts by Killearn would
take a significant period of time (10-20 years), and initially the development
costs would greatly exceed any related revenues. In addition, such projects
would entail a high degree of risk. There is no assurance that Killearn would
be able to identify a suitable real estate acquisition and attain adequate
returns to its shareholders. In contrast, the special committee considered
the fact that consummation of the Merger would preclude the shareholders from
having the opportunity to participate in Killearn's future earnings or
prospects and that the Williams Family would solely benefit from any increases
in the value of Killearn following the Merger by reason of their ownership of
the Purchaser. Overall, the special committee felt that avoiding future risk
was a factor in favor of the guaranteed proceeds of the Merger.
4. The special committee was influence by the likelihood of
consummation of the Merger, the proposed structure of the Merger and
anticipated closing date, and the conclusion that the Purchaser has the
financial capability of completing the Merger .
5. The special committee reviewed and analyzed the terms and
conditions of the Merger Agreement, including the ability of Killearn, to the
extent required by fiduciary obligations of the special committee to
Killearn's shareholders, to terminate the Merger Agreement in order to
approve a Takeover Proposal on terms more favorable to Killearn's shareholders
than those set forth in the Merger Agreement.
6. The special committee considered the fact that the Purchaser and
certain members of the Williams Family had purchased stock of Killearn within
the last year at prices greater than $5.50 per share. Yet, such factors were
not determinative of their opinion as to the fairness of the Merger from a
financial perspective. In many instances, the purchases occurred when
Killearn's common stock was trading at a higher price than it is currently
trading. The committee also recognized that the thinly-traded market for the
shares of Killearn made exact valuation on a daily basis very difficult. The
special committee concluded that the purchases were not based on a formal
valuation of the company and if such a valuation had been done, then the
Purchaser and/or member of the Williams Family would not have made the
acquisition at such a high price.
7. The special committee also considered the recent transactions that had
been proposed by Mr. Weiss and PTI. The special committee noted that Mr.
Weiss proposed a transaction which attributed a value of $5.50 per share to
the Killearn's outstanding stock. In contrast, the special committee did not
give much weight to the proposed sale by PTI of its Killearn common stock to
the Purchaser for $6.50 because the Purchaser did not conduct a formal
evaluation of the price nor did it make a formal acceptance of the offer.
In view of the various factors considered by the special committee in
connection with its evaluation of the Merger Agreement and the merger
consideration, the special committee did not find it necessary to quantify or
otherwise attempt to assign relative importance to the specific factors
considered in making its determination, nor did it evaluate whether such
factors were of equal importance. However, based upon these factors, the
evaluation of all the relevant information provided to them by Killearn's
financial advisor and taking into account the existing trading ranges for
Killearn's common stock, the special committee determined that the Merger,
including the merger consideration, was fair, to Killearn's unaffiliated
shareholders. In considering the factors described above, individual members
of the special committee may have given different weights to different
factors. Except for above paragraphs (5) and (6), the special committee
considered the foregoing factors to be positive factors supporting its
determination that the Merger is fair and in the best interest of Killearn's
unaffiliated shareholders.
In addition, the special committee determined that the Merger was
procedurally fair because, among other things: (1) the special committee
consisted entirely of non-management, non-affiliated, independent directors
appointed to represent the interests of Killearn's unaffiliated shareholders;
(2) the special committee and Board were represented by Greenberg Traurig,
Killearn's outside legal counsel, whereas the Purchaser and the Williams
Family retained and were represented by separate legal counsel; (3) the
special committee retained American Express Tax & Business Services, Inc. as
its financial advisor to assist it in evaluating a potential transaction and
received advice from American Express; (4) the special committee engaged in
extensive deliberations in evaluating the sales process; (5) the $5.50 per
share cash consideration and the other terms and conditions of the Merger
Agreement resulted from active arm's-length bargaining between the special
committee and its representatives, on the one hand, and the Purchaser and its
representatives, on the other hand; and (6) the Purchaser and the executive
officers and directors of Killearn have agreed to vote their shares in
proportion to the vote cast by the unaffiliated shareholders. The special
committee believed that such safeguards were sufficient to assure that the
Merger is fair to, and in the best interests of Killearn's unaffiliated
shareholders.
Board of Directors Factors. In connection with its recommendation, the
Board considered the following factors: (1) the determinations and
recommendations of the special committee; (2) the factors referred to above as
having been taken into account by the special committee; and (3) the fact that
the cash merger consideration and the terms and conditions of the Merger
Agreement were the result of arm's-length negotiations between the special
committee and Killearn, on the one hand, and the Purchaser, on the other hand.
The Board, after hearing the report of the special committee, adopted the
special committee's analysis as well as the analysis of American Express.
The Board did not consider it practicable to, nor did it attempt to,
quantify, rank or otherwise assign relative weights to the specific factors it
considered in reaching its decision. The Board did not find it necessary to
quantify or otherwise attempt to assign relative importance to the specific
factors considered in making its determination, nor did it evaluate whether
such factors were of equal importance. Rather, the Board reached a general
consensus that the Merger was advisable and in the best interests of
Killearn, its unaffiliated shareholders and Killearn's other constituencies.
In considering the factors described above, individual members of the Board
may have given different weight to different factors. Except for
paragraphs (5) and (6) of the special committee factors, the Board
considered the foregoing factors to be positive factors supporting its
determination that the Merger is fair and in the best interest of Killearn's
unaffiliated shareholders.
The Board determined that the Merger was procedurally fair because, among
other things: (1) the special committee consisted entirely of non-management,
non-affiliated independent directors appointed to represent the interests of
the Killearn's unaffiliated shareholders; (2) the special committee and Board
were represented by Greenberg Traurig, Killearn's outside legal counsel,
whereas J.T. Williams, Jr. and David K. Williams and the Purchaser retained
and were represented by separate legal counsel; (3) the special committee
retained American Express Tax & Business Services, Inc. as its financial
advisor to assist it in evaluating a potential transaction and received
advice from American Express; (4) the special committee engaged in extensive
deliberations in evaluating the sales process; (5) the $5.50 per share cash
consideration and the other terms and conditions of the Merger Agreement
resulted from active arm's-length bargaining between the special committee
and its representatives, on the one hand, and the Purchaser, on the other
hand; and (6) the Purchaser and the executive officers and directors of
Killearn have agreed to vote their shares in proportion to the vote cast by
the unaffiliated shareholders. The Board believed that such safeguards
were sufficient to assure that the Merger is fair to, and in the best
interests of Killearn's unaffiliated shareholders.
Fairness of the Merger. Based on the factors set forth above, Killearn
believes that the consideration to be received by its unaffiliated
shareholders pursuant to the Merger is fair from a financial point of view.
Purchaser's and the Williams Family's Purpose and Reasons for the Merger
The purpose of the Purchaser and the Williams Family for engaging in
the Merger is to gain 100% ownership of Killearn. After gaining 100%
control of Killearn, the Purchaser intends to make a subchapter S election
and continue to operate as an S-corporation. This restructuring has certain
tax advantages over the traditional C-corporation. An S-corporation is
effectively taxed as a partnership and therefore avoids taxation at both the
corporate level and the shareholder level. Instead, the income is only
taxable to the shareholders; there is no separate entity-level tax. The
Purchaser and the Williams Family believe that the after-tax return from
Killearn's future business activities can be improved by making this election.
Also, because of the late stage of development of Killearn's assets, Killearn
is faced with the decision to either wind-down its development operations or
seek additional investment projects and commit to an additional 10-20 year
development cycle. While the Purchaser and the Williams Family believe that
there will be significant opportunities associated with their investment in
Killearn, there are also substantial risks that such opportunities may not be
fully realized. This assessment is based upon publicly available information
regarding Killearn, the Purchaser's and the Williams Family's due diligence
investigation of Killearn and the Purchaser's and the Williams Family's
experience. Therefore, given the advantages of a subchapter S election and
the timing issues discussed above, the Purchaser and the Williams Family feel
that this is an appropriate time to undertake this acquisition.
The proposed acquisition of Killearn has been structured as a merger in
order to permit the acquisition of all of Killearn's common stock. Neither
the Purchaser nor the Williams Family considered other alternatives to the
structure of the transaction, except as described under "Special Factors --
Background of the Merger" on page ___.
Opinion of Financial Advisor
American Express Tax & Business Services, Inc. ("American Express") has
acted as the sole financial advisor to the special committee in connection with
the Merger and has assisted the special committee in its examination of the
fairness, from a financial point of view, to the public shareholders of
Killearn of the consideration to be received by them in the Merger. As used
herein and in the opinion of American Express, the term "public shareholders"
means all shareholders of Killearn other than the Purchaser and the
Williams Family.
American Express indicated to the special committee that it was prepared
to render its opinion as to the fairness of the merger consideration as
proposed by the Purchaser to Killearn's public shareholders from a financial
point of view on April 19, 1999, subject to American Express' review of drafts
of the Merger Agreement and this Proxy Statement. On May 7, 1999, American
Express delivered its oral opinion to the special committee and the Board of
Directors to the effect that, as of the date of such opinion, the $5.50 per
share cash consideration to be received in the Merger is fair to the public
shareholders of Killearn from a financial point of view. The full text of
American Express' written opinion, which sets forth the assumptions made,
procedures followed, matters considered and scope of review by American
Express in rendering its opinion, was delivered on May 10, 1999 and is
attached as Appendix B to this Proxy Statement and is incorporated herein by
reference. Shareholders are urged to read the American Express opinion in its
entirety. In addition, a copy of the written report presented by American
Express to the special committee was filed as an exhibit to the
Rule 13E-3 Transaction Statement on Schedule 13E-3 ("Schedule 13E-3") under
the Exchange Act filed by Killearn, with the Commission with respect to the
transactions described in this Proxy Statement. Copies of the Schedule 13E-3
are available for inspection and copying at the principal executive offices of
Killearn during regular business hours by any interested shareholder of
Killearn, or a representative who has been so designated in writing, and may
be inspected and copied, or obtained by mail, in the manner specified in
"Available Information". The summary set forth below does not purport to be a
complete description of such materials or presentations by American Express.
In arriving at its opinion, American Express (i) considered financial
information with respect to the assets of Killearn through January 31, 1999;
(ii) reviewed certain financial analyses and forecasts of sales and
development activities; (iii) analyzed publicly available information; (iv)
held discussions with management of Killearn; (v) reviewed appraisals and
sales documents; (vi) reviewed historical stock market prices and trading
volumes of Killearn common stock; (vii) reviewed drafts of the Merger
Agreement; and (viii) made such other studies and inquiries and considered
such other data as it deemed relevant. In addition, American Express relied,
without independent verification, on the accuracy and completeness of all
financial and other information that was publicly available or furnished to it
by Killearn. American Express further assumed that projections of sales and
related costs examined by American Express were reasonably prepared on bases
reflecting the best currently available estimates and good faith judgments of
Killearn's management as to the future performance of Killearn. In addition,
in accordance with the special committee's instructions regarding
American Express' review of the Merger, American Express did not advise the
special committee with respect to alternatives to the Merger. No other
limitations were imposed by the special committee or the Board upon
American Express with respect to the investigations made or procedures
followed by American Express in rendering its opinion.
American Express employed several analytical methodologies and no one
method of analysis should be regarded as critical to the overall conclusion it
has reached. Each analytical technique has inherent strengths and limitations,
and the nature of the available information may further affect the value of
particular techniques. Its conclusion is based on all the analyses and factors
it considered taken as a whole and also on application of its experience.
Such conclusions often involve significant elements of judgment and
qualitative as well as quantitative analysis. Hence, it expresses no opinion
as to the probative force standing alone, of any one or more parts of the
material that follows. Its only opinion is the formal written opinion that it
has expressed as to the fairness from a financial point of view of the
consideration being paid in the Merger. Its opinion, analyses and all
conclusions drawn from such analyses are necessarily based upon market,
economic and other conditions that exist and can be evaluated as of the date
thereof, and on information available to it as of the date thereof.
In delivering its opinion and making its presentations to the special
committee and the Board of Directors on May 7, 1999, American Express
considered and presented the financial and comparative analyses of various
indicators of value of Killearn set forth below. This financial and
comparative analyses, including the ranges of share values implied by such
analyses, were based in part upon projections prepared by Killearn.
American Express' financial analyses employed the following two types of
approaches: (i) a comparative company analysis, and (ii) a discounted cash
flow analysis. American Express considered, and to some degree utilized, all
of the analyses described below. American Express considered but rejected use
of break-up or liquidation value analysis.
Comparable Company Analysis. In the comparable company analysis,
American Express compared Killearn's financial performance against that of
publicly traded companies, whose primary operations involved land development.
Although American Express was unable to locate information on specific
companies substantially similar to Killearn, it was able use information
compiled by Ibbotson and Associates with respect to composite, industry-wide
information for real estate and land development companies. Using these
industry composite figures, American Express was able to calculate values for
Killearn based on price-earnings ratios, price-sales ratios, price-cash ratios
and market-to-book ratios. American Express' analysis generated values
ranging from $3.13 to $78.21 per share.
American Express concluded that the operations of Killearn do not
support the values implied by most of these types of analysis. In comparing
Killearn's financial performance over the most recent three years and the
most recent twelve month period against that of the composite information,
American Express observed that Killearn was much smaller than the median
companies in, among other areas, revenues, earnings before interest,
taxes, depreciation and amortization and earnings before interest and taxes.
In addition, since Killearn's assets were in the late stages of
development, it would need to commit to additional investments in new
properties with an investment horizon of 10-20 years in order to maintain its
current levels of sales. Therefore any analysis based on earnings or sales
artificially inflates the value attributable to Killearn. However, the
market-to-book ratios produced more reasonable values ranging from $3.13 to
$9.55. These composite valuations imply that the $5.50 per share offered by
the Purchaser is within the range of comparable company valuations.
Discounted Cash Flow Analysis. American Express used discounted
cash flow analysis to discount Killearn's projected cumulative cash
flows to a present value. This analysis assumed the continued viability of
Killearn, that it will develop and sell land for amounts approximating those
in the forecasts, and will have sufficient capital to acquire and develop
land in the future.
In order to calculate these discounted values American Express used
forecasts and estimates of development and sales of land parcels currently
held by Killearn. In determining its estimate of Killearn's land values,
American Express reviewed independent appraisal reports which had been
conducted over the last five years and estimates provided by the
management of Killearn. The independent appraisals of Killearn's land
were conducted by Bob Sorrells & Associates, and John K. Selfe III
independent real estate appraisers. These appraisals were conducted for
various banks in connection with proposed bank loans to be made by such banks
to Killearn. As a result, the independent appraisers were chosen by these
banks, but Killearn paid the real estate appraisal firm as required by the
banks. All of the appraisals prepared by the real estate appraisal firm are
available for inspection at Killearn's principal executive offices during
Killearn's regular business hours by any interested stockholder of Killearn
or such stockholder's representative who has been so designated in writing.
Of these various estimates of land value, management agreed with all of the
appraisals except for one which appraised approximately 75 acres of
commercial land. This appraisal (the "Appraisal") was prepared in October 1998
by Bob Sorrells & Associates and was the basis of the land sales projections
used by American Express.
In preparing the Appraisal, the appraiser inspected the land held by
Killearn and made assumptions regarding the construction of improvements to
the land including the construction of a public highway through a portion of
the property. The Appraisal concluded that with these improvements the land
could be sold in commercial tracts ranging from $100,000 to $325,000 per acre.
These estimates were based on sales of land in an area approximately 10 miles
closer to downtown Atlanta. The Appraisal then concluded that the total
acreage, when sold, would generate approximately $16,830,000 of sale proceeds
for Killearn.
The management estimates were based on historical land sales by
Killearn to independent, unaffiliated buyers, including a local utility,
Management disagreed with the figures included in the Appraisal because the
appraiser assumed that much of the land would be sold after the construction
of the public highway and would therefore generate higher sales prices. In
addition, management felt that the historical sales prices of properties
owned by Killearn were better indicators of the value of Killearn's
properties than historical sale prices obtained for other properties which had
different amenities and were located closer to downtown Atlanta. Therefore,
management concluded that lots would sell for prices between $100,000 to
$250,000 per acre, for total proceeds of approximately $9,870.000.
Finally, American Express considered both of these estimates of
future sales proceeds and conducted its own general inspection of Killearn's
properties and the comparable properties contained in the Appraisal. Based
upon its inspection, it agreed with management that some of the comparable
properties contained in the Appraisal are different and warrant lower
land values than given by the appraiser. However, based on its own experience
valuing real estate assets, it assigned values to certain tracts of land that
were higher than management's estimates. Therefore, it calculated its own
sales value base on historical data and its estimation of the effect of
improvements to the property and concluded that the tract prices would range
from $100,000 to $275,000, for total proceeds of $13,530,000.
From these sets of estimates (American Express', Killearn's management,
and the Appraisal, American Express deducted forecasts and
projections of commissions, general and administrative expenses, income taxes
and other amounts incident to the sale of the land or operation of Killearn
to arrive at future estimated cash flows. These cash flows were discounted to
their present value using a 12% discount rate which American Express estimated
to be the appropriate rate for an investment in a similar company. It arrived
at this discount rate by considering the effects of inflation, security,
liquidity, and returns on high-grade investments such as United States Treasury
Bonds. It also noted that 12% was consistent with ranges of discount rates on
similar investments as provided by Ibbotson and Associates and ranges used by
certain real estate appraisers of Killearn's properties.
American Express' analysis resulted in values per share of Killearn
common stock under each of these scenarios of $4.79 for the American Express
case, $6.27 per the Appraisal and $2.92 per Killearn management's
estimates. The difference in these values resulted from the disputed
projections of land values as discussed above . American Express
concluded that its base case determination, and therefore the $5.50 per share
offered by the Purchaser, was therefore an appropriate and reasonable
estimate of discounted value.
Comparable Sales Analysis. American Express was unable to identify recent
sales of similar companies with which to complete this analysis.
Liquidation Analyses. American Express considered, but rejected, use of
liquidation value analyses which assume the sale of land "as is", with no
further development cost and a significant reduction of general and
administrative costs. The overall result of this analysis was that the
decrease in sales value of the land significantly outweighed any savings from
cessation of development activity. Also, because of the cessation of
development activity, the deferred tax liability, created out of timing
differences in the capitalization of real estate taxes and interest during
development, converts into a tax payable and further reduces the value of the
stock. The resulting value per share of a liquidation approaches zero.
Other. American Express is regularly engaged in the valuation of
businesses in connection with mergers and acquisitions, private placements and
valuations for estate, corporate and other purposes. The special committee
selected American Express to act as its financial advisor in connection with
the Merger on the basis of American Express' reputation and its experience in
transactions of this type.
In connection with its financial advisory services and the delivery of its
opinion, American Express received a fee of $25,000, which fee was not
contingent upon a favorable opinion. In addition, Killearn agreed to
reimburse American Express for its reasonable out-of-pocket expenses incurred
during its engagement and to indemnify American Express and hold them
harmless against certain liabilities, including certain liabilities under
the federal securities laws, relating to, or arising out of, its rendering of
services under its engagement.
Conflicts of Interest
In considering the recommendations of the special committee and Board of
Directors, Killearn's shareholders should be aware that J.T. Williams, Jr. and
David K. Williams, who are both members of the Board of Directors have
interests in the Merger that are different from the interests of Killearn
shareholders generally and which may create potential conflicts of interest.
Ownership of Purchaser. Two directors of Killearn, J.T. Williams, Jr. and
David K. Williams, own, in the aggregate, approximately 76% of the outstanding
capital stock of the Purchaser. In addition, two other sons of J.T. Williams,
Jr., John R. Williams and J.T. Williams, III, own the remainder of the
outstanding capital stock of the Purchaser.
Director and Officer Indemnification and Insurance. The Merger Agreement
provides that the Surviving Corporation generally will indemnify all directors
and officers of Killearn to the fullest extent permitted by Florida law and in
the Articles of Incorporation and Bylaws of Killearn, as in effect as of the
date of the Merger Agreement, from and against all liabilities, costs, expenses
and claims arising out of actions taken prior to the Merger in performance of
their duties as directors and officers of Killearn. The Merger Agreement
further provides that, except as may be limited by applicable law, for a
period of six years after the Merger the indemnification obligations set
forth in Killearn's Articles of Incorporation and Bylaws shall survive the
Merger and shall not be amended or modified by either Killearn or the
Surviving Corporation in a manner adverse to the rights of former and current
officers and directors of Killearn with respect to matters occurring prior to
the Merger. In addition, the Merger Agreement provides that the Surviving
Corporation will maintain in effect, for three years or until expiration of
the applicable statute of limitations but in no event longer than four years,
after the Merger to maintain directors' and officers' liability insurance for
the benefit of its directors and officers who are currently covered under
Killearn's directors' and officers' liability insurance on terms not
materially less favorable than the existing insurance coverage; provided,
however, the Surviving Corporation is not required to pay an annual premium
in excess of 200% of the last annual premium paid by Killearn prior to the
date of the Merger Agreement.
Special Committee and Board Compensation. Compensation paid to the members
of the special committee and the Board for services rendered in their capacity
as members of the special committee of the Board for the period from December
1998 through May 1999, including, among other things, their analysis and
evaluation of the proposal of the Purchaser as well as their negotiation of the
terms of the Merger Agreement was $9,000 for each of Mr. Horne and Mr. Pope.
This compensation was paid whether or not the special committee approved the
Merger. Similar compensation was given to the members of the special committee
for their service on committees in 1997, including service on a committee to
consider a merger offer by PTI even though the merger was not consummated.
THE SPECIAL MEETING
Date, Time and Place
The special meeting will be held on August 9, 1999, at 10:00 a.m., local
time, at Killearn's offices 385 Country Club Drive, Stockbridge, Georgia.
At the special meeting, Killearn shareholders will be asked to consider and
vote upon a proposal to approve and adopt the Merger Agreement and the Merger.
Record Date; Voting Power; Quorum
Shareholders of record of Killearn common stock at the close of business
on June 15, 1999 are entitled to notice of and to vote at the special meeting.
As of the record date, there were 887,412 shares of Killearn common stock
issued and outstanding held by approximately 500 holders of record.
Holders of record of Killearn common stock on the record date are entitled
to one vote per share on any matter that may properly come before the special
meeting.
The representation, in person or by proxy, of at least a majority of the
outstanding shares of Killearn common stock entitled to vote at the special
meeting is necessary to constitute a quorum for the transaction of business.
Vote Required; Security Ownership of Management
Under Florida law, the affirmative vote of the holders of a majority of
the shares of Killearn common stock outstanding on the record date is required
to approve the Merger Agreement and the Merger. However, the Purchaser
and each of the executive officers and directors of Killearn have agreed to
vote their shares in favor of the Merger Agreement in the same proportion as
the other shareholders of Killearn. As a result, a vote of a majority of the
unaffiliated shareholders is required to approve the Merger. For purposes
of determining whether the Merger Agreement and the Merger have received a
majority vote, abstentions and broker non-votes (shares held in "street name"
through a broker or other nominee as to which voting instructions with regards
to the Merger Agreement and the Merger have not been received from the
beneficial owners and such broker or other nominee is not permitted to
exercise voting discretion with regards to the Merger Agreement or the Merger)
will not be included in the vote total, although an abstention and a broker
non-vote will have the effect of a vote against the Merger Agreement and the
Merger. Abstentions and broker non-votes will, however, be counted for
determining whether there is a quorum.
As of the record date for the special meeting, Killearn's executive
officers and directors owned, in the aggregate, 237,133 shares of Killearn
common stock or 26.7 % of the votes represented by the shares of Killearn
common stock then outstanding. At the special meeting, Killearn will tally
the votes of the unaffiliated shareholders and then the Purchaser and the
executive officers and directors of Killearn will vote their shares in the
same portion as the votes cast by the unaffiliated shareholders. See
"Beneficial Ownership of Common Stock" on page ___.
Proxies
Shareholders are requested to complete, date and sign the accompanying
form of proxy and return it promptly in the enclosed postage-paid envelope.
Any shareholder giving a proxy pursuant to this solicitation has the
power to revoke it at any time before it is voted at the special meeting. A
later dated proxy or written notice of revocation given prior to the vote at
the special meeting to the Secretary of Killearn will serve to revoke such
proxy. Also, a shareholder who attends the special meeting in person may, if
he or she wishes, vote by ballot at the special meeting, thereby
canceling any proxy previously given. Mere presence at the special
meeting will not serve to revoke any proxy previously given.
Solicitation of Proxies
In addition to the use of mails, proxies may be solicited by persons
regularly employed by Killearn, by personal interview, telephone and
telegraph. Such persons will receive no additional compensation for such
services, but will be reimbursed for any out-of-pocket expenses incurred by
them in connection with such services. Arrangements may also be made with
brokerage houses and other custodians, nominees and fiduciaries for the
forwarding of solicitation materials to the beneficial owners of shares of
common stock held of record by such persons, and Killearn may reimburse such
persons for reasonable out-of-pocket expenses incurred by them in connection
therewith.
Killearn will bear the costs of the special meeting and of soliciting
proxies therefor. Killearn may engage a proxy solicitor to assist in the
solicitation of proxies.
THE MERGER
Mechanics of the Merger. In the Merger:
Killearn will be merged into Merger Sub, and Merger Sub will be the
Surviving Corporation; and
each share of Killearn's common stock (other than shares held by the
Purchaser and the Williams Family) will be converted into
the right to receive $5.50 in cash, without interest.
Consequences of the Merger. As a result of the Merger:
the entire equity interest in Killearn will be owned by the Purchaser;
the unaffiliated shareholders of Killearn will no longer have any
interest in, and will not be shareholders of Killearn, and therefore
will not participate in its future earnings or growth;
the Purchaser will have the opportunity to benefit from any earnings
and growth of Killearn, and will bear the risk of any decrease in
Killearn's value;
Killearn's common stock will no longer be traded on The American Stock
Exchange, Inc., price quotations will no longer be available and the
registration of Killearn's common stock under the Exchange Act will be
terminated. After such registration is terminated, Killearn will no
longer be required to file periodic reports with the Commission;
the present Board of Directors of Killearn will be replaced by the
Board of Directors of Merger Sub which is comprised of J.T. Williams,
Jr., David K. Williams, John R. Williams and J.T. Williams, III;
the officers of Killearn will be the officers of the Surviving
Corporation after the effective time of the Merger. See "Certain
Information Concerning Merger Sub and the Purchaser" on page ____.
The Purchaser expects that, following consummation of the Merger, the
business and operations of Killearn will be continued substantially as they
are currently being conducted. The Board of Directors and management of
Killearn will, however, continue to evaluate Killearn's business, operations,
corporate structure and organization and will make such changes as they deem
appropriate.
Financing
The total amount of funds necessary to fund the Merger is expected to
be approximately $3.6 million. These funds are expected to come from the
following sources:
the 315,430 shares of Killearn common stock owned by Wimberly
Investment Funds, L.P. will be paid for by the cancellation of $1,734,865
(or $5.50 per share a portion of the indebtedness (including accrued and
unpaid interest) owed by Wimberly to the Purchaser;
the 132,000 shares of Killearn common stock owned by Proactive
Technologies, Inc. will be paid for by the cancellation of $726,000 (or
$5.50 per share) a portion of indebtedness (including accrued and unpaid
interest) owed by PTI to the Purchaser;
approximately $900,000 will be borrowed from American Century Bank as
described below; and
the balance of the merger consideration will be paid with cash of the
Purchaser on hand at the effective time of the Merger estimated to be
approximately $250,000.
Cancellation of Indebtedness. Pursuant to secured promissory notes,
the Purchaser has loaned to Wimberly approximately $2 million. As security
for the notes and pursuant to two separate security agreements, Wimberly
granted the Purchaser a security interest in 315,430 shares of Killearn
common stock held by Wimberly. The note originally matured in January 1999
and has since been extended twice. The notes are earning interest at a rate
of 8.5% per annum.
Similarly, the Purchaser has previously purchased three promissory
notes under which PTI owes a total of approximately $1.4 million (including
accrued and unpaid interest). Pursuant to pledge agreements, the notes are
secured by 132,000 shares of Killearn common stock held by PTI. The notes
bear interest at the prime rate plus 1%.
The purchase of the 315,430 shares of Killearn common stock held by
Wimberly and the 132,000 shares of Killearn common stock held by PTI will be
paid for by the cancellation of a portion of the indebtedness owed by each to
the Purchaser. Otherwise, the consideration received by Wimberly and PTI is
in no way different than the consideration received by the other shareholders
of Killearn (other than the shares held by the Purchaser and the Williams
Family). Further, the tax consequences of the Merger shall be the same on
Wimberly and PTI as the other shareholders of Killearn (other than the shares
held by the Purchaser and the Williams Family).
Debt Financing. The Purchaser has a revolving line of credit with American
Century Bank in the aggregate amount of $2.0 million having a final maturity
date occurring on or before March 22, 2000 (the "Line of Credit").
Approximately, $1.1 million has been previously borrowed under the Line of
Credit and the balance in the amount of $900,000 available under the Line of
Credit will be used to fund the Merger.
The Line of Credit is secured by 26.77 acres of real estate of the
Purchaser. The interest rate under the Line of Credit is the prime rate plus
1/2 percentage points. The documents for the Line of Credit contain
affirmative, negative and financial covenants and events of default customary
for credit facilities of a size and type similar to the Line of Credit. Draws
under the Line of Credit are subject to the satisfaction of customary
conditions for similar financing.
Federal Income Tax Consequences
There will be federal income tax consequences of the Merger to the
holders of the Killearn common stock. The material tax consequences of the
Merger are summarized in the following discussion, which is based on the
current provisions of the Internal Revenue Code, existing and proposed
Treasury Regulations thereunder and current administrative rulings and court
decisions, all of which are subject to change. Any change, which may or may
not be retroactive, could alter the tax consequences to the holders of
Killearn common stock as described herein. The following discussion is
addressed to a shareholder that holds Killearn common stock as a capital asset
and that, for federal income tax purposes, is a U.S. citizen or resident or a
domestic corporation, partnership, trust or estate. This summary does not
purport to deal with all aspects of taxation that may be relevant to a
particular shareholder in light of his, her or its particular circumstances or
to certain types of taxpayers subject to special treatment under the federal
income tax law, including financial institutions, broker-dealers, foreign
persons, persons holding Killearn common stock as part of a straddle,
"synthetic security" or other integrated investment (including a "conversion
transaction") or persons who acquired their Killearn common stock through the
exercise of an employee stock option or otherwise as compensation.
A holder of Killearn common stock will recognize capital gain or loss for
federal income tax purposes on each share of Killearn common stock exchanged
for the merger consideration pursuant to the Merger. The amount of gain
or loss recognized on a share will be equal to the difference between $5.50
and the holder's basis in the share. The gain or loss will be long-term
capital gain or loss in the case of shares held for more than one year as of
the date of the Merger. In the case of individuals, trusts and estates, net
capital gain for a taxable year (that is, the excess of net long-term capital
gain for the taxable year over any net short-term capital loss for the year)
is subject to a maximum federal income tax rate of 20%. Receipt of the cash
merger consideration in exchange for Killearn common stock pursuant to the
Merger also may be a taxable transaction under applicable state, local and
foreign tax laws.
A holder of Killearn common stock may be subject to backup withholding at
the rate of 31% with respect to the merger consideration received
pursuant to the Merger, unless the holder (a) is a corporation or comes
within certain other exempt categories and, when required, demonstrates that
fact or (b) provides a correct taxpayer identification number ("TIN"),
certifies as to no loss of exemption from backup withholding and otherwise
complies with the applicable requirements of the backup withholdings rules.
To prevent the possibility of backup withholding on payments made to certain
holders with respect to shares of Killearn common stock pursuant to the Merger,
each holder must provide the paying agent (the "Paying Agent") with his, her
or its correct TIN by completing a Form W-9 or Substitute Form W-9. A holder
of Killearn common stock that does not provide his, her or its correct TIN may
be subject to penalties imposed by the Internal Revenue Service (the "IRS"),
as well as to backup withholding. Any amount withheld under these rules will
be refundable or creditable against the holder's federal income tax liability,
provided the required information is furnished to the IRS. Killearn (or its
agent) will report to the holders of Killearn common stock and to the IRS the
amount of any "reportable payments," as defined in Section 3406 of the Code,
and the amount of tax, if any, withheld with respect thereto.
The federal income tax consequences set forth in this proxy statement are
for general information only. The tax consequences for a particular
shareholder will depend upon the facts and circumstances applicable to that
shareholder. Accordingly, each shareholder is urged to consult his, her or
its own tax adviser to determine the tax consequences of the Merger to the
shareholder in light of his, her or its particular circumstances, including
the applicability and effect of state, local, foreign and other tax laws and
any possible changes in those laws. The foregoing discussion may not apply to
shares received pursuant to the exercise of employee stock options or
otherwise as compensation.
Accounting Treatment
Killearn expects that the Merger will be accounted for as a
recapitalization for accounting purposes because it will not constitute a
change of control under generally accepted accounting principles. As a
result, the historical cost basis of Killearn's assets and liabilities will
not change. The aggregate cost of repurchasing the common stock will be
accounted for as a charge to shareholders' equity.
Dissenters' Appraisal Rights
Killearn's shareholders are not entitled under the Florida law or
Killearn's articles of incorporation to exercise dissenters' appraisal rights
in connection with the Merger. Therefore, if a shareholder votes against, or
abstains from voting for, the Merger and a majority of shareholders approve
the Merger, then the dissenting or abstaining shareholder will receive the
Merger Consideration in exchange for their shares.
Delisting and Deregistration of Common Stock
Following the Merger, Killearn's common stock will be no longer traded on
The American Stock Exchange, Inc., price quotations will no longer be
available and the registration of Killearn's common stock under the Exchange
Act will be terminated. After such registration is terminated, Killearn will
no longer be required to file periodic reports with the Commission.
Regulatory Approvals
Killearn is not aware of any material governmental or regulatory approvals
which are required for consummation of the Merger.
THE MERGER AGREEMENT
Overview
The terms and conditions of the Merger are set forth in the Merger
Agreement, the complete text of which is attached as Appendix A to this proxy
statement and is incorporated herein by reference. The summary of the Merger
Agreement contained in this proxy statement does not purport to be complete
and is subject to and qualified in its entirety by reference to the complete
text of such document.
In the Merger:
Killearn will be merged into Merger Sub, and the Merger Sub will be
the Surviving Corporation upon completion of the Merger; and
each share of Killearn's common stock (other than shares held by the
Purchaser and the Williams Family) will be converted into the right to
receive $5.50 in cash, without interest.
Exchange of Certificates Representing Common Stock
Instructions with regard to the surrender of Killearn's stock
certificates, together with a letter of transmittal to be used for this
purpose, will be mailed to Killearn's shareholders as promptly as practicable
after the completion of the Merger. In order to receive the cash merger
consideration, shareholders will be required to surrender their stock
certificates, together with a duly completed and executed letter of
transmittal, to a Paying Agent designated by Merger Sub and approved by
Killearn. Promptly after completion of the Merger, the cash merger
consideration will be deposited in trust with the Paying Agent. Upon receipt
of such stock certificates and letter of transmittal, the Paying Agent will
deliver the cash merger consideration to the registered holder or his
transferee of the shares of Killearn's common stock. No interest will be paid
or accrued on the amounts payable upon the surrender of stock certificates.
Shareholders should not submit their stock certificates for exchange until
the instructions and letter of transmittal are received.
After the effective time of the Merger, there will be no further transfers
on the stock transfer books of Killearn of the shares of Killearn's common
stock that were outstanding immediately prior to the Merger. If a certificate
representing such shares is presented for transfer, subject to compliance
with the requisite transmittal procedures, it will be canceled and exchanged
for the merger consideration.
Each certificate representing shares of Killearn's common stock
immediately prior to the effective time of the Merger will, at such time, be
deemed for all purposes to represent only the right to receive the
merger consideration into which the shares of Killearn's common stock
represented by such certificate were converted in the Merger.
Any merger consideration delivered or made available to the Paying
Agent and not exchanged for stock certificates within 180 days after the
Merger will be returned by the Paying Agent to the Surviving Corporation,
which will thereafter act as Paying Agent. If any certificates representing
shares of Killearn common stock are not surrendered within five years after
the Merger then the unclaimed merger consideration payable in exchange
for such certificates shall, to the extent permitted under applicable
abandoned property, escheat or similar law, become the property of the
Surviving Corporation, free and clear of all claims or interests of any
person previously entitled thereto. None of the Merger Sub, the Purchaser,
Killearn nor the Paying Agent will be liable to a holder of shares of
Killearn's common stock for any of the cash merger consideration delivered to
a public official pursuant to any applicable abandoned property, escheat or
similar law.
Representations and Warranties
Killearn has made representations and warranties in the Merger Agreement
regarding, among other things its organization and good standing, authority
to enter into the transactions, its capitalization, the content and
submission of forms and reports required to be filed by Killearn with the
Commission, requisite governmental and other consents and approvals, and
compliance with all applicable laws.
Each of Merger Sub and Purchaser have made representations and warranties
in the Merger Agreement regarding, among other things, its organization and
good standing, authority to enter into the transactions, the requisite
governmental and other consents and approvals, financing, and the accuracy of
information supplied by it for submission on forms and reports required to be
filed by Killearn with the Commission.
Conduct of Business Pending the Merger
Killearn has agreed that during the period from the date of the Merger
Agreement to the effective time of the Merger, except as otherwise provided
in the Merger Agreement, unless consented to by Purchaser, it shall, and
shall cause its subsidiaries, to, among other things, conduct its business
in the ordinary course and to use its commercially reasonable efforts to
preserve intact its current business organizations, keep available the
services of its current officers, employees and consultants, preserve its
relationships with customers, suppliers, contractors and other persons with
which it or its subsidiaries has significant business relations and maintain
all insurance necessary to the conduct of its business as currently conducted.
Killearn has further agreed that it shall not, and shall cause its
subsidiaries not to, without the prior written consent of Purchaser:
dispose of or encumber any of its properties and assets, other than
sales in the ordinary course of business and collections of receivables
in the ordinary course of business;
issue, sell, or acquire any shares of the capital stock of the
Killearn or securities convertible into, or rights, warrants or options
(including employee stock options) to acquire, any such shares or other
convertible securities;
split, combine or reclassify any shares of its common stock or
declare any dividends on or make other distributions; and
incur, assume or prepay any long-term debt or, except in the
ordinary course of business, incur or assume any short-term debt; assume,
guarantee, endorse or otherwise become liable or responsible for the
obligations of any other person; or make any loans, advances or capital
contributions to, or investments in, any other person.
No Solicitation
The Merger Agreement prohibits Killearn, its subsidiaries, and any of
Killearn's or its subsidiaries' directors, officers, employees, agents or
representatives from directly or indirectly: (i) initiating, soliciting, or
encouraging any inquiries, discussions or making any proposal with respect to
any merger, consolidation or other business combination involving Killearn or
any acquisition of any kind of a material portion of the assets or capital
stock of Killearn or its subsidiaries (a "Takeover Proposal"); or (ii)
negotiating, exploring or otherwise communicating in any way with any third
party with respect to any Takeover Proposal or entering into or consummating
any agreement arrangement or understanding requiring it to abandon, terminate
or fail to consummate the Merger.
However, prior to the special meeting (or any postponement thereof),
Killearn may, if Killearn's Board of Directors determines in good faith by a
majority vote, based upon the advice of its outside counsel, that failing to
take such action would constitute a breach of the fiduciary duties of the
Board of Directors under applicable law, in response to a Takeover Proposal
from any person that was not solicited by Killearn and that did not otherwise
result from the breach of Killearn's obligations to refrain from soliciting
any Takeover Proposal, and upon notifying Merger Sub of the particulars of
such Takeover Proposal and otherwise complying with these obligations,
Killearn may participate in discussion or negotiations with such person
regarding any Takeover Proposal.
Indemnification
The Merger Agreement provides that the Surviving Corporation generally
will indemnify all directors and officers of Killearn to the fullest extent
permitted by Florida law and in the Articles of Incorporation and Bylaws of
Killearn, as in effect as of the date of the Merger Agreement, from and
against all liabilities, costs expenses and claims arising out of actions
taken prior to the effective time of the Merger in performance of their duties
as directors and officers of Killearn in connection with the Merger Agreement.
The Merger Agreement further provides that, except as may be limited by
applicable law, for a period of six years from and after the effective time
of the Merger the indemnification obligations set forth in Killearn's
Articles of Incorporation and Bylaws shall survive the Merger and shall not
be amended or modified by either Killearn or the Surviving Corporation in a
manner adverse to the rights of former and current officers and directors of
Killearn with respect to matters occurring prior to the effective time of the
Merger.
Directors' and Officers' Liability Insurance
The Merger Agreement provides that the Surviving Corporation shall
maintain in effect, for three years or until the applicable statute of
limitations expires but in no event longer than four years after the Merger,
directors' and officers' liability insurance policies covering the persons
who are currently covered in their capacities as such directors and officers
(the "Covered Parties") by Killearn's current directors' and officers'
policies and on terms not materially less favorable than the existing
insurance coverage with respect to matters occurring prior to the Merger;
provided, however, in the event the annual premium for such coverage exceeds
an amount equal to 200% of the last annual premium paid immediately prior to
the date hereof by Killearn for such coverage, the Surviving Corporation shall
notify the Covered Parties who shall then elect as a group either (i) to allow
the Surviving Corporation to obtain as much comparable insurance as possible
for an annual premium equal to 200% of the last annual premium paid
immediately prior to the date hereof by Killearn, or (ii) to seek coverage
from another carrier, in which event the Surviving Corporation shall reimburse
the Covered Parties the cost of such alternative coverage up to an amount
equal to 200% of the last annual premium paid immediately prior to the date
hereof by the Killearn for such coverage.
Conditions to the Merger
Each party's respective obligations to effect the Merger is subject to
satisfaction of the following conditions:
the approval and adoption of the Merger Agreement by the affirmative
vote of the holders of a majority of the outstanding shares of Killearn's
common stock in accordance with Florida Law and Killearn's Articles of
Incorporation;
no order, statute, rule, regulation, executive order, stay, decree,
judgment or injunction shall have been enacted, entered, issued,
promulgated or enforced by any court or governmental authority which
prohibits or materially and adversely restricts the consummation of the
Merger; and
The obligations of Merger Sub and the Purchaser, on the one hand, and
Killearn, on the other hand, to consummate the Merger are subject to the
satisfaction or waiver of further conditions including:
Killearn, Merger Sub and the Purchaser, as the case may be, shall
have performed all of its obligations under the Merger Agreement required
to be performed by it at or prior to the effective time of the Merger;
each of the representations and warranties of Killearn, Merger Sub
and the Purchaser, as the case may be, contained in the Merger Agreement
shall be true and correct, in each case as of the Closing Date as if made
at and as of such time; and
Termination of Merger Agreement
The Merger Agreement may be terminated and the Merger abandoned, at any
time prior to the effective time of the Merger, whether before or after
approval by Killearn's shareholders:
by the mutual written consent of Killearn and the Purchaser;
by either the Purchaser or Killearn if the Merger has not been
consummated by December 31, 1999, unless the failure by the terminating
party to fulfill any obligation under the Merger Agreement caused or
resulted in the failure of the Merger to be consummated by December 31,
1999;
by either the Purchaser or Killearn, if Killearn's Board of Directors
(or any committee thereof), withdraws or modifies or refrains from giving
its approval or recommendation of the Merger Agreement or the Merger;
automatically, without action by any party thereto, if the
shareholders of Killearn do not approve the Merger Agreement at the
special meeting;
by either Killearn or the Purchaser if the other party breaches any
of its representations, warranties and agreements under the Merger
Agreement and such breach is not cured within 10 days of notice; and
by Killearn subsequent to a Takeover Proposal if its special
committee determines in good faith by a majority vote based upon the advice
of its outside counsel that the Board is required to do so by its fiduciary
obligations, and after it notifies the Purchaser of the Takeover Proposal.
Fees and Expenses
Killearn and Merger Sub will pay their own fees, costs, and expenses
incurred in connection with the Merger Agreement (except that Killearn will
bear all expenses incurred in connection with this proxy statement).
Estimated Fees and Expenses of the Merger
Estimated fees and expenses incurred or to be incurred by the Surviving
Corporation and Killearn, Inc. (the parent Company) in connection with the
Merger are approximately as follows:
Description Amount
___________ ______________
Advisory fees and expenses(1) $25,000
Debt financing fees and expenses(2) 15,135
Legal fees and expenses(3) 60,000
Paying Agent fees and expenses 2,500
Transaction fees and expenses 1,500
Accounting fees and expenses 5,000
Securities and Exchange Commission filing fee 500
Printing and mailing costs 1,500
Miscellaneous expenses 3,000
________
Total.................................................... $114,135
1. Includes the fees and expenses of American Express Tax & Business
Services, Inc.
2. Includes the fees and expenses of $15,135.00 to American Century
Banking Corp.
3. Includes the estimated fees and expenses of counsel for Killearn, and
the Purchaser, which are expected to be reimbursed by the Surviving
Corporation following the Merger.
CERTAIN INFORMATION CONCERNING
MERGER SUB, THE PURCHASER AND OTHER AFFILIATES
Merger Sub. Merger Sub is a Georgia corporation incorporated in May 1999
at the direction of the Purchaser for the purpose of consummating the Merger.
It is anticipated that Merger Sub will not have any significant assets or
liabilities prior to the effective date of the Merger nor engage in any
activities other than those involving the Merger.
Purchaser. The Purchaser is a Georgia corporation. Approximately 77% of
the outstanding capital stock of the Purchaser is owned by J.T. Williams, Jr.
and David K. Williams, two directors of Killearn, and all of the remaining
capital stock of the Purchaser is owned by two other sons of J.T. Williams,
Jr., John R. Williams and J.T. Williams, III. Each owner of the Purchaser is
a citizen of the United States and the business address of the Purchaser and
each such owner is at 1570 Rock Quarry Road, Stockbridge, Georgia 30281.
Information relating to transactions involving Killearn's common stock
effected by or on behalf of each owner of the Purchaser and his respective
affiliates since May 1, 1997 through the date of this proxy statement is set
forth on Appendix C to this proxy statement. For further information
concerning the Purchaser, see "Special Factors-Conflicts of Interest."
Subsequent to the consummation of the Merger, it is anticipated that the
directors and executive officers of the Surviving Corporation will be as
follows:
Name Position
____ ________
J.T. Williams, Jr. Chairman of the Board
David K. Williams President and Chief Executive Officer,
Director
John R. Williams Vice President, Director
J.T. Williams, III Secretary, Director
William E. Daniels, Jr. Chief Financial Officer
Set forth below is a brief description of the business experience for
each of the directors of the Surviving Corporation:
Name Position
____ ________
J.T. Williams, Jr. Chairman of the Board and President of
Killearn Properties, Inc. from 1970
until October 1996. President of
Killearn, Inc., a privately owned
company which owned and managed the
Eagle's Landing Golf and Country Club
until May 1998, and owns the Inn at
Eagle's Landing since October 1996.
David K. Williams President of Killearn Properties, Inc.
since August 1997 and Chief Executive
Officer of Killearn since
January 1998. Executive Vice President
of Killearn from May 1994 to
August 1997. President of
Killearn's Florida operations from
June 1989 to May 1994.
John R. Williams Vice President of Killearn, Inc. since
July 1997. President of Eagles Landing
Sales Center from January 1988 until
July 1997.
J.T. Williams, III Development Coordinator of Killearn
Properties, Inc. since January 1989.
William E. Daniels, Jr. Chief Financial Officer of Killearn
Properties, Inc. since July 1998.
Chief Financial Officer of Proactive
Technologies, Inc. from July 1997 until
February 1998. Controller for KWC
Management Corporation from 1993 to
1995.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information regarding the
beneficial ownership of Killearn's common stock as of July 12, 1999
for (1) each person who is known by Killearn to own beneficially more than 5%
of the outstanding shares of common stock, (2) the Chief Executive Officer and
the four other most highly compensated executive officers of Killearn, (3)
each director of Killearn, and (4) all of the directors and executive officers
of Killearn as a group. Except pursuant to applicable community property laws
and except as otherwise indicated, each shareholder identified in the table
possesses sole voting and investment power with respect to its or his shares.
Shares
Name Beneficially Owned Percent Owned
_______ __________________ _____________
Wimberly Investment Fund, L.P. 315,430(1) 35.6
J.T. Williams, Jr. 216,146(2) 24.4
David K. Williams 167,387(2) 18.9
Killearn, Inc. 157,400 17.7
Proactive Technologies, Inc. 132,000 14.9
Melvin L. Pope, Jr. 300(3) *
William E. Daniels, Jr. 150 *
Mallory E. Horne 0 *
All directors and executive 226,583 (2) (3) 25.5
Officers as a group (5 persons)
___________________________________
* Less than 1% of the outstanding shares.
1. Based solely on reports of beneficial ownership filed by the named
person with the Commission.
2. Includes 157,400 shares of Common Stock held by Killearn, Inc., a
corporation controlled by J.T. Williams, Jr. and David K. Williams.
3. Includes 25 shares of Common Stock held by Mr. Pope's wife and 275
shares of Common Stock held by Mr. Pope as custodian for his children.
INDEPENDENT PUBLIC ACCOUNTANTS
Killearn's consolidated balance sheet as of April 30, 1998, and the
related consolidated statements of operations, shareholders' equity and cash
flows for the year ended April 30, 1998, incorporated by reference in this
proxy statement, have been audited by PricewaterhouseCoopers LLP, independent
public accountants. A representative of PricewaterhouseCoopers LLP will not be
at the special meeting.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents previously filed with the Commission by Killearn
(File No. 1-6762) are incorporated by reference in this proxy statement:
Annual Report on Form 10-KSB for the year ended April 30, 1998; and
Quarterly Reports on Form 10-QSB for the quarterly periods ended July
31, 1998, October 31, 1998 and January 31, 1999.
All documents filed by Killearn with the Commission pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act after the date hereof and prior
to the date of the special meeting shall be deemed to be incorporated by
reference herein and shall be a part hereof from the date of filing of such
documents. Any statements contained in a document incorporated by reference
herein or contained in this proxy statement shall be deemed to be modified or
superseded for purposes hereof to the extent that a statement contained herein
(or in any other subsequently filed document which also is incorporated by
reference herein) modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed to constitute a part hereof except
as so modified or superseded.
This proxy statement incorporates documents by reference which are not
presented herein or delivered herewith. Such documents (other than exhibits to
such documents unless such exhibits are specifically incorporated by reference)
are available, without charge, to any person, including any beneficial owner,
to whom this proxy statement is delivered, on written or oral request to
Killearn at 385 Country Club Drive, Stockbridge, Georgia 30281 Attn: Chief
Financial Officer (telephone number 770-389-2020). Such documents will be
provided to such person by first class mail or other equally prompt means
within one business day of receipt of such request. In order to ensure
delivery of the documents prior to the special meeting, requests should be
received by July 26, 1999.
AVAILABLE INFORMATION
Killearn, the Merger Sub and the Purchaser have filed with the Commission
a Rule 13e-3 Transaction Statement on Schedule 13E-3 (including any
amendments thereto, the "Schedule 13E-3") under the Exchange Act with respect
to the Merger. This proxy statement does not contain all of the information
set forth in the Schedule 13E-3 and the exhibits thereto, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. Killearn is subject to the informational requirements of the
Exchange Act and, in accordance therewith, files reports, proxy statements
and other information with the Commission.
Schedule 13E-3 and the exhibits thereto, as well as such reports, proxy
statements and other information filed by Killearn, can be inspected and
copied at the Commission's public reference rooms in Washington, D.C.,
New York, New York and Chicago, Illinois. Please call the Commission at 1-800-
SEC-0330 for further information on the public reference rooms.
Killearn's SEC filings are also available to the public from commercial
document retrieval services and at the Internet web site maintained by the
Commission at http://www.sec.gov.
KILLEARN PROPERTIES, INC.
385 Country Club Drive
Stockbridge, Georgia 30281
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Mallory E. Horne and William E. Daniels,
Jr., and either of them, proxies (each with full power of substitution) to
vote, as indicated below and in their discretion upon such other matters as
may properly come before the meeting, all shares which the undersigned would
be entitled to vote at the special meeting of shareholders of Killearn to be
held on August 9, 1999, at 10:00 a.m., local time, at its offices at
385 Country Club Drive, Stockbridge, Georgia, and at any adjournment or
postponement thereof, as indicated on the reverse side.
1. A proposal to approve and adopt the Merger Agreement and the Merger
described in the accompanying proxy statement.
__FOR __AGAINST __ABSTAIN
CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY
ALSO DELEGATES DISCRETIONARY AUTHORITY WITH RESPECT TO ANY OTHER BUSINESS
WHICH MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT
THEREOF AND MATTERS INCIDENT TO THE CONDUCT OF THE SPECIAL MEETING.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF SPECIAL
MEETING DATED July 16, 1999 AND THE ACCOMPANYING PROXY STATEMENT.
PLEASE SIGN AND DATE THIS PROXY BELOW
Date: , 1999
__________________________________________
__________________________________________
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON
LEFT. WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, GUARDIAN OR CORPORATE OFFICIAL,
PLEASE GIVE FULL TITLE.
APPENDIX A - Agreement and Plan of Merger
AGREEMENT AND PLAN OF MERGER
AMONG
KILLEARN, INC.,
KILLEARN DEVELOPMENT, INC.
AND
KILLEARN PROPERTIES, INC.
DATED AS OF MAY 10, 1999
Execution Copy
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of May 10, 1999,
among Killearn, Inc., a Georgia corporation ("Parent"), Killearn Development,
Inc., a Georgia corporation ("Sub"), and Killearn Properties, Inc., a Florida
corporation (the "Company").
PRELIMINARY STATEMENTS
A. Parent has proposed to the Company's Board of Directors that the
Company merge with and into Sub (the "Merger"), with the holders of all of
the outstanding shares of Common Stock, par value $0.10 per share, of the
Company (the "Common Stock") not currently owned by Parent or shareholders of
Parent receiving a cash payment of $5.50 in exchange for each of their shares
of Common Stock.
B. A Special Committee of the Company's Board of Directors (the "Special
Committee") has determined that the Merger is fair to, and in the best
interests of, the Public Shareholders (as defined in Section 2.1), and has
recommended the approval and adoption of this Agreement to the Company's Board
of Directors.
C. The Boards of Directors of Parent, Sub and the Company have approved
and adopted this Agreement and approved the Merger upon the terms and subject
to the conditions set forth herein.
D. The Company's Board of Directors believes it is in the best interests
of the Company and its shareholders to consummate the Merger upon the terms
and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties and agreements herein contained, and intending to
be legally bound hereby, Parent, Sub and the Company agree as follows:
ARTICLE 1
THE MERGER
1.1. The Merger. Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the General Corporation Act of the
State of Florida (the "Florida Business Corporation Act") and Georgia Business
Corporation Code of the State of Georgia (the "Georgia Business Corporation
Code"), at the Effective Time (as defined in Section 1.2), the Company shall
be merged with and into Sub and the separate existence of the Company shall
thereupon cease, with Sub being the surviving corporation in the Merger (the
"Surviving Corporation").
1.2. Effective Time of the Merger. Subject to the terms of this
Agreement, the Merger shall become effective when the Department of State of
the State of Florida (the "Florida Department of State") files the articles of
merger or other appropriate documents in accordance with the Florida Business
Corporation Act, and the Georgia Secretary of State files the articles of
merger or other appropriate documents in accordance with the Georgia Business
Corporation Code, or such other date as shall be specified in the articles of
merger, which articles of merger shall be delivered by Sub and the Company to
the Florida Department of State and the Georgia Secretary of State as soon as
practicable after the closing of the Merger contemplated by this Agreement in
accordance with Section 7.1. When used in this Agreement, the term "Effective
Time" shall mean the date and time at which such articles are so filed.
1.3. Effects of the Merger. The Merger shall have the effects set forth
in the Florida Business Corporation Act and the Georgia Business Corporation
Code.
1.4. Articles of Incorporation. The Articles of Incorporation of Sub,
as in effect immediately prior to the Effective Time, shall be the Articles
of Incorporation of the Surviving Corporation.
1.5. Bylaws. The Bylaws of Sub as in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation.
1.6. Directors. The directors of Sub immediately prior to the Effective
Time shall be the directors of the Surviving Corporation, who shall serve
until their respective successors are duly elected and qualified in the manner
provided in the Articles of Incorporation and Bylaws of the Surviving
Corporation, or as otherwise provided by law.
1.7. Officers. The officers of the Surviving Corporation shall initially
consist of the officers of Sub immediately prior to the Effective Time, until
their successors are duly elected and qualified in the manner provided in the
Articles of Incorporation and Bylaws of the Surviving Corporation, or as
otherwise provided by law.
ARTICLE 2
CONVERSION OF SHARES
2.1. Conversion of Shares. As of the Effective Time, by virtue of the
Merger and without any action on the part of any holder thereof:
(a) All shares of Common Stock (the "Shares") that are held by any
wholly owned subsidiary of the Company and any Shares held by Parent, Sub, any
other subsidiary of Parent or any shareholder of Parent, shall be canceled and
retired and shall cease to exist and no payment shall be made with respect
thereto.
(b) Each remaining outstanding Share shall, by virtue of the Merger
and without any action on the part of the holder thereof, be converted into
the right to receive $5.50 in cash, without any interest thereon, upon
surrender of the certificate representing such Share (such cash amount is
referred to herein as the "Merger Consideration; the Shares for which the
Merger Consideration is to be paid are referred to herein as the "Public
Shares" and the holders thereof are referred to herein as the "Public
Shareholders"). At the Effective Time, all such Public Shares shall no longer
be outstanding and shall automatically be canceled and retired and shall cease
to exist, and the Public Shareholders shall cease to have any rights as
shareholders of the Company except the right to receive the Merger
Consideration.
2.2. Exchange of Certificates. (a) As soon as reasonably practicable
after the Effective Time, Sub shall deposit in trust with a bank or trust
company designated by Parent ("Paying Agent"), cash in an aggregate amount
equal to the product of (x) the number of Public Shares issued and outstanding
immediately prior to the Effective Time, and (y) the Merger Consideration
(such amount being hereinafter referred to as the "Exchange Fund"). Paying
Agent shall, pursuant to irrevocable instructions, make the payments provided
for in Section 2.1(b) out of the Exchange Fund. Paying Agent shall invest the
Exchange Fund, as Parent directs, in direct obligations of the United States
of America, obligations for which the full faith and credit of the United
States of America is pledged to provide for the payment of all principal and
interest or commercial paper obligations receiving the highest rating from
either Moody's Investors Services, Inc. or Standard & Poor's, a division of
The McGraw Hill Companies, or a combination thereof, provided that, in any
such case, no instrument shall have a maturity exceeding 3 months. Any net
profit resulting from, or interest or income produced by, such investments
shall be payable to Parent. Parent shall replace any monies lost through any
investment made pursuant to this Section 2.2. The Exchange Fund shall not be
used for any other purpose except as provided in this Agreement.
(b) Promptly after the Effective Time, Parent shall cause Paying
Agent to mail to each record holder of certificates that immediately prior to
the Effective Time represented Public Shares (the "Certificates), a form
letter of transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only upon proper
delivery of the Certificates to Paying Agent) and instructions for use in
surrendering Certificates and receiving payment therefor. Upon surrender to
Paying Agent of a Certificate, together with a properly completed and executed
letter of transmittal, the holder of such Certificate shall be entitled to
receive in exchange therefor cash in an amount equal to the product of the
number of Public Shares represented by such Certificate and the Merger
Consideration, less any applicable withholding tax, and such Certificate shall
forthwith be canceled. In the event any Certificate shall have been lost or
destroyed, Paying Agent, subject to such other reasonable conditions as Parent
may impose (including the posting of an indemnity bond or other surety in
favor of Sub with respect to the Certificates alleged to be lost or
destroyed), shall be authorized to accept an affidavit from the record holder
of such Certificate in a form reasonably satisfactory to Parent. No interest
shall be paid or accrued on the cash payable upon the surrender of the
Certificates. If payment is to be made to a person other than the person in
whose name the Certificate surrendered is registered, it shall be a condition
of payment that the Certificate so surrendered shall be properly endorsed or
otherwise in proper form for transfer and that the person requesting such
payment shall pay any transfer or other tax required by reason of the payment
to a person other than the registered holder of the Certificate surrendered or
establish to the satisfaction of the Paying Agent and Parent that such tax has
been paid or is not applicable. Until surrendered in accordance with the
provisions of this Section 2.2(b), each Certificate shall represent for all
purposes only the right to receive the Merger Consideration into which the
Shares evidenced by the Certificates shall have been converted pursuant to
Section 2.1(b), without any interest thereon.
2.3. Closing of Company Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed and no transfer of Shares shall
thereafter be made. If, after the Effective Time, certificates representing
Shares are presented to the Surviving Corporation or Paying Agent, they shall
be canceled and exchanged for cash as provided herein.
2.4. Dissenting Shares. In accordance with the Florida Business
Corporation Act, no shareholder shall have dissenter or appraisal rights with
respect to the Common Stock.
2.5. Withholding Rights. Sub and Paying Agent shall be entitled to
deduct and withhold from the amounts payable (including the Merger
Consideration) pursuant to this Agreement to any Public Shareholder such
amounts as Parent, Sub or Paying Agent is required to deduct and withhold with
respect to the making of such payment under applicable tax law. To the extent
that amounts are so deducted and withheld by Parent, Sub or Paying Agent, such
amounts shall be treated for all purposes of this Agreement as having been
paid to the relevant Public Shareholder.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub that, except as
previously disclosed to Parent in writing:
3.1. (a) Corporate Organization. Each of the Company and the Company
Subsidiaries (as defined in Section 3.5 hereof) (i) is a corporation duly
incorporated, validly existing and in good standing under the laws of
jurisdiction of its incorporation; (ii) has all requisite corporate power and
authority to own, operate and lease the properties and assets it now owns,
operates and leases and to carry on its business as now being conducted; and
(iii) is qualified or licensed to do business and in good standing in every
jurisdiction in which the ownership, operation or lease of property by it or
the conduct of its business requires such qualification or licensing, except
for such failures, if any, to be so qualified and in good standing, that, when
taken together with all such other failures, would not in the aggregate have a
material adverse effect on the business, condition (financial or otherwise),
operations, prospects, properties, assets or liabilities (the "Business") of
the Company and the Company Subsidiaries taken as a whole.
3.2. Authorization; Recommendation of Merger. (a) The Company has full
corporate power and authority to execute and deliver this Agreement and,
subject to approval by the Company's shareholders, to consummate the
transactions contemplated hereby. The Company's Board of Directors has duly
approved this Agreement and has duly authorized the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
and has resolved to recommend that its shareholders approve this Agreement and
the Merger. This Agreement has been duly executed and delivered by the
Company and, subject to approval by the Company's shareholders, constitutes
(assuming due authorization, execution and delivery of this Agreement by the
other parties hereto), the valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.
(b) The Special Committee has received the opinion of American
Express Incorporated dated May 10, 1999, that, as of the date of such opinion,
the Merger Consideration to be received by the Public Shareholders pursuant to
this Agreement is fair, from a financial point of view, to the Public
Shareholders.
(c) The Special Committee (at a meeting duly called and held at
which a quorum was present) has determined that the Merger is fair to, and in
the best interests of, the Public Shareholders, and has recommended the
adoption of this Agreement to the Company's Board of Directors, subject to the
right of the Special Committee to withdraw, modify or amend such
recommendation if the Special Committee determines, in good faith after
consultation with legal counsel, that failure to take such action would be
reasonably likely to result in a breach of its fiduciary duties to the
Company's shareholders under applicable law.
(d) The Company's Board of Directors (at a meeting duly called and
held at which a quorum was present) has determined that the Merger is fair to,
and in the best interests of, the Company's shareholders, has adopted this
Agreement and has recommended the adoption of this Agreement by the Company's
shareholders, subject to the right of the Company's Board of Directors to
withdraw, modify or amend such recommendation to the extent the Company's
Board of Directors determines, in good faith after consultation with legal
counsel, that failure to take such action would be reasonably likely to result
in a breach of its fiduciary duties to the Company's shareholders under
applicable law.
3.3. Consents and Approvals; No Violations. Except for (a) the
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") relating to the Proxy Statement (as defined in Section 3.6 hereof; (b)
the Transaction Statement on Schedule 13E-3 to be filed pursuant to Rule 13e-3
promulgated under the Exchange Act (the "Schedule 13E-3"); and (c) the filing
of the articles of merger and other appropriate merger documents, if any, as
required by the laws of the States of Florida and Georgia, the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby will not: (i) violate any provision of the Articles of
Incorporation or Bylaws (or comparable governing documents) of the Company or
any Company Subsidiary; (ii) violate any statute, ordinance, rule, regulation,
order or decree of any court or of any public, governmental or regulatory body,
agency or authority applicable to the Company or any Company Subsidiary or by
which any of their respective properties or assets may be bound; (iii) require
any filing with, or permit, consent or approval of, or giving of any notice to,
any public, governmental or regulatory body, agency or authority; or (iv)
result in a violation or breach of, or constitute (with or without due notice
or lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, franchise, permit,
agreement or other instrument or obligation to which the Company or any
Company Subsidiary is a party, or by which any of them or any of their
respective properties or assets may be bound, excluding from the foregoing
clauses (ii), (iii) and (iv) violations, breaches and defaults that, and
filings, notices, permits, consents and approvals the absence of which, in the
aggregate, would not have a material adverse effect on the business of the
Company and the Company Subsidiaries taken as a whole and would not prevent or
delay the consummation of the transactions contemplated hereby.
3.4. Capitalization. The authorized capital stock of the Company
consists of 6,000,000 Shares. As of the date hereof, no Shares are held by
the Company in its treasury. As of May 10, 1999, 887,412 Shares are issued
and outstanding and no Shares are reserved for issuance for any reason. All
Shares that are outstanding as of the date hereof are duly authorized, validly
issued, fully paid and nonassessable, and are not subject to, nor were they
issued in violation of, any preemptive rights. Except as set forth above,
there are no shares of capital stock of the Company authorized or outstanding.
There are not any, and at the Effective Time there will not be any,
subscriptions, options, conversion or exchange rights, warrants or other
agreements, claims or commitments of any nature whatsoever obligating the
Company or any Company Subsidiary to issue, transfer, deliver or sell, or
cause to be issued, transferred, delivered or sold, additional shares of the
capital stock of the Company or any Company Subsidiary or obligating the
Company or any Company Subsidiary to grant, extend or enter into any such
agreement or commitment.
3.5. Subsidiaries. All the outstanding shares of capital stock of each
corporation of which the Company owns, directly or indirectly, 50 percent or
more of the outstanding capital stock (a "Company Subsidiary") have been
validly issued and are fully paid, nonassessable and are not subject to, nor
were they issued in violation of, any preemptive rights. All outstanding
shares of capital stock of the Company Subsidiaries are owned, directly or
indirectly, by the Company, free and clear of all liens, charges,
encumbrances, security interests, equities, options, restrictions on voting
rights or rights of disposition, and claims or third party rights of whatever
nature. Except for the Company Subsidiaries, the Company does not own,
directly or indirectly, any capital stock or other equity securities of any
corporation or have any direct or indirect equity or ownership interest in any
business and neither the Company nor any Company Subsidiary is subject to any
obligation or requirement to provide funds for or to make any investment (in
the form of a loan, capital contribution or otherwise) in any entity.
3.6. Proxy Statement and Schedule 13E-3. The proxy statement and related
materials to be furnished to the Company's shareholders in connection with the
Merger pursuant to Section 5.2 (each proxy statement, together with any
amendments thereof or supplements thereto, in each case in the form or forms
mailed to the Company's shareholders, being the "Proxy Statement") and the
Schedule 13E-3 will comply in all material respects with the Exchange Act and
the rules and regulations thereunder. The information supplied by the
Company for inclusion in the Proxy Statement or the Schedule 13E-3 shall not,
at the time the Proxy Statement is mailed, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading or, at the time of
the meeting of the Company's shareholders, as the Proxy Statement is then
amended or supplemented, omit to state any material fact necessary to correct
any statement originally supplied by the Company for inclusion in the Proxy
Statement or the Schedule 13E-3 that has become false or misleading. If at
any time prior to the Effective Time any event occurs relating to the Company
or any Company Subsidiary, or relating to their respective officers, directors
or shareholders, that should be described in a supplement or amendment to the
Proxy Statement or the Schedule 13E-3 or any supplement or amendment thereto,
the Company will promptly so inform Parent, will furnish all necessary
information to Parent relating to such event, and will file with the Securities
and Exchange Commission (the "Commission"), and mail to its shareholders with
respect to the Proxy Statement, any required supplement or amendment to the
Proxy Statement and Schedule 13E-3 in accordance with the Exchange Act and the
rules and regulations thereunder. Notwithstanding the foregoing, no
representation or warranty is made with respect to any information with
respect to Parent or Sub or their respective officers, directors or affiliates
(i) provided to the Company by Parent or Sub in writing for inclusion in the
Proxy Statement or the supplements or amendments thereto; or (ii) included in
the Schedule 13E-3.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub jointly and severally represent and warrant to the Company
that:
4.1. Corporate Organization. Each of Parent and Sub (i) is a corporation
duly incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation; (ii) has all requisite corporate power and
authority to own, operate and lease the properties and assets it now owns,
operates and leases and to carry on its business as now being conducted; and
(iii) is qualified or licensed to do business as a foreign corporation and in
good standing in every jurisdiction in which the ownership, operation or lease
of property by it or the conduct of its business requires such qualification
or licensing, except for such failures to be so qualified and in good standing,
if any, that when taken together with all such other failures, would not in
the aggregate have a material adverse effect on the business, condition
(financial or otherwise), operations, properties, assets or liabilities of
Parent and its subsidiaries taken as a whole.
4.2. Authorization. Each of Parent and Sub has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The Board of Directors of each of Parent
and Sub, and Parent as the sole shareholder of Sub, have duly approved this
Agreement and have duly authorized the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Parent and Sub and
constitutes (assuming due authorization, execution and delivery of this
Agreement by the Company), the valid and binding agreement of Parent and Sub,
enforceable against each of them in accordance with its terms.
4.3. Consents and Approvals; No Violations. Except for (a) the
requirements of the Exchange Act relating to the Proxy Statement, the Schedule
13E-3 and the Merger; and (b) the filing of articles of merger and other
appropriate merger documents, if any, as required by the laws of the States of
Florida and Georgia, the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not: (i) violate
any provision of the Articles of Incorporation or Bylaws (or other comparable
governing documents) of Parent or Sub; (ii) violate any statute, ordinance,
rule, regulation, order or decree of any court or of any public, governmental
or regulatory body, agency or authority applicable to Parent or Sub or by
which any of their respective properties or assets may be bound; (iii) require
any filing with or permit, consent or approval of, or the giving of any notice
to, any public, governmental or regulatory body or authority; or (iv) result
in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, any of the terms, conditions or
provisions or any note, bond, mortgage, indenture, license, franchise, permit,
agreement or other instrument or obligation to which Parent or Sub is a party,
or by which either of them or any of their respective properties or assets may
be bound, excluding from the foregoing clauses (ii), (iii) and (iv)
violations, breaches and defaults that, and filings, notices, permits,
consents and approvals the absence of which, in the aggregate, would not have
a material adverse effect on the business, condition (financial or otherwise),
operations, properties, assets or liabilities of Parent and its subsidiaries
taken as a whole and would not prevent or delay the consummation of the
transactions contemplated hereby.
4.4. Schedule 13E-3 and Proxy Statement. The information supplied by
Parent and Sub for inclusion in the Proxy Statement or the Schedule 13E-3
shall not, at the time the Proxy Statement is mailed, and the Schedule 13E-3
is filed with the Commission, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading or, at the time of the meeting of the
Company's shareholders, as the Proxy Statement and Schedule 13E-3 is then
amended or supplemented, omit to state any material fact necessary to correct
any statement originally supplied by Parent and Sub for inclusion in the Proxy
Statement or the Schedule 13E-3 that has become false or misleading. If at
any time prior to the Effective Time any event occurs relating to Parent or
Sub, or relating to their respective officers, directors or shareholders, that
should be described in a supplement or amendment to the Proxy Statement or the
Schedule 13E-3 or any supplement or amendment thereto, Parent and Sub will
promptly so inform the Company, will furnish all necessary information to the
Company relating to such event and will file with the Commission any required
supplement or amendment to the Schedule 13E-3 in accordance with the Exchange
Act and the rules and regulations thereunder. Notwithstanding the foregoing,
no representation or warranty is made with respect to any information with
respect to the Company or its officers, directors or affiliates included in
the Proxy Statement or Schedule 13E-3.
4.5. Financial Ability to Consummate Transaction. Parent has sufficient
funds to enable Sub to acquire all Shares owned by the Public Shareholders
pursuant to the Merger and to pay all fees and expenses payable by Parent and
Sub related to the transactions contemplated by this Agreement.
ARTICLE 5
COVENANTS
5.1. Conduct of the Company's Business. During the period commencing on
the date hereof and continuing until the Effective Time, the Company agrees
(except as expressly contemplated by this Agreement or to the extent that
Parent shall otherwise consent in writing; such consent, not to be
unreasonably withheld) that:
(a) The Company and each Company Subsidiary will carry on its
business in, and only in, the usual, regular and ordinary course in
substantially the same manner as heretofore conducted and, to the extent
consistent with such business, use its commercially reasonable efforts to
preserve intact its present business organization, keep available the services
of its present officers and employees and preserve its relationships with
customers, consultants, suppliers and others having business dealings with it
to the end that its goodwill and ongoing business shall not be impaired at the
Effective Time.
(b) The Company will not, and will not permit any Company Subsidiary
to, dispose of or encumber any of its properties and assets, other than sales
in the ordinary course of business and collections of receivables in the
ordinary course of business.
(c) The Company will not split, combine or reclassify any Shares or
declare any dividends on or make other distributions in respect of the Shares.
Neither the Company nor any Company Subsidiary will amend its Articles of
Incorporation or Bylaws or similar governing documents.
(d) Neither the Company nor any Company Subsidiary will issue, sell,
authorize or propose the sale or issuance of, or purchase or acquisition of,
any shares of the capital stock of the Company or any Company Subsidiary or
securities convertible into, or rights, warrants or options (including
employee stock options) to acquire, any such shares or other convertible
securities.
(e) Neither the Company, nor any Company Subsidiary, or officer,
director or employee of (or any investment banker, attorney, accountant or
other representative retained by) the Company or any Company Subsidiary
shall, directly or indirectly, solicit, initiate or encourage (including by
way of furnishing information) any inquiries or proposals by, or engage in any
discussions or negotiations with, any corporation, partnership, person or
other entity or group that it is reasonably expected may lead to, or that
relates to, any takeover proposal; provided that if the Board of Directors of
the Company determines in good faith, after consultation with outside counsel,
that it is necessary to do so in order to comply with its fiduciary duties to
the Company's shareholders under applicable law, the Company may in response
to a takeover proposal from any person that was not solicited by the Company
and did not otherwise breach this subsection (i) furnish information with
respect to the Company to such person and (ii) participate in discussions or
negotiations with such person regarding any takeover proposal. The Company
will promptly advise Parent orally and in writing of the receipt and content
of any such inquiries or proposals. As used in this subsection (e), "takeover
proposal" shall mean any proposal for a merger or other business combination
involving the Company or for the acquisition of a 50% or greater interest in
the capital stock of the Company or all or substantially all of the assets of
the Company other than the one contemplated by this Agreement.
(f) Neither the Company nor any of the Company Subsidiaries will
(i) incur, assume or prepay any long-term debt or, except in the ordinary
course of business, incur or assume any short-term debt; (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other person
except wholly owned subsidiaries of the Company in the ordinary course of
business and consistent with past practices; or (iii) make any loans, advances
or capital contributions to, or investments in, any other person (other than
customary loans or advances to employees).
(g) The Company will not take, agree to take, or knowingly permit to
be taken any action or do or knowingly permit to be done anything in the
conduct of the Business of the Company and the Company Subsidiaries, or
otherwise, that would be contrary to or in breach of any of the terms or
provisions of this Agreement, or that would cause any of the representations
and warranties of the Company contained herein to be or become untrue in any
material respect.
5.2. Proxy Statement. As soon as practicable, the Company will prepare
and file with the Commission the Proxy Statement. The Company, Parent and Sub
will together prepare and file with the Commission the Schedule 13E-3. Each
of the Company, Parent and Sub will furnish all information required to be
included about such person in the Proxy Statement and the Schedule 13E-3 and,
after consultation with each other, shall respond promptly to any comments
made by the Commission with respect to the Proxy Statement and any preliminary
version thereof and the Schedule 13E-3. At the earliest practicable time, the
Company will cause the Proxy Statement to be mailed to its shareholders and,
if necessary, after the Proxy Statement shall have been so mailed, promptly
circulate amended, supplemental or supplemented proxy material and, if
required in connection therewith, resolicit proxies. The Proxy Statement
shall include the recommendation of the Company's Board of Directors to the
Company's shareholders (and reflect that the Special Committee has made a
similar recommendation to the Company's Board of Directors), subject to the
fiduciary duties under applicable law of such directors (including the
directors constituting the Special Committee), as determined by such directors
in good faith after consultation with counsel, in favor of the adoption of
this Agreement.
5.3. Shareholder Approval. As promptly as possible, the Company shall
call a meeting of its shareholders for the purpose of voting upon this
Agreement and the Merger and the Company agrees that this Agreement and the
Merger shall be submitted at a meeting of the shareholders of the Company and
the Company shall take all steps necessary to duly call, give notice of,
convene and hold such meeting. The Company shall use its commercially
reasonable efforts to obtain the necessary adoption of the Agreement by its
shareholders. Notwithstanding anything to the contrary in this Agreement, if
the Company's Board of Directors or the Special Committee determines, in good
faith after consultation with counsel, that in the exercise of its respective
fiduciary duties, under applicable law it is required to withdraw, modify or
amend its recommendation in favor of the Merger, such withdrawal, modification
or amendment shall not constitute a breach of this Agreement. Parent will
cause all Shares owned by Parent to be voted in favor of the Merger in the
same proportion as the other shareholders of the Company .
5.4. Reasonable Efforts. Subject to the terms and conditions herein
provided and the fiduciary duties under applicable law of the Company's
directors, including directors constituting the Special Committee, as
determined by such directors in good faith after consultation with counsel,
each of the parties hereto agrees to use its commercially reasonable efforts
to take, or cause to be taken, all action, and to do, or cause to be done,
all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement, including obtaining any consents, authorizations, exemptions
and approvals from, and making all filing with, any governmental, regulatory
or public body or authority that are necessary or, in the judgment of Parent
or the Company, desirable in connection with the transactions contemplated by
this Agreement. Parent and the Company shall each have the right to review
and approve in advance all characterizations of the information relating to
Parent or the Company, as the case may be, and any of their respective
subsidiaries, which appear in any filings made in connection with the
transactions contemplated by this Agreement with any governmental body.
5.5. Material Events. At all times prior to the Effective Time, each
party shall promptly notify the other in writing of the occurrence of any
event that will or may result in the failure to satisfy any of the conditions
specified in Article 6 hereof.
5.6. Public Announcements. At all times until the Effective Time, each
party shall promptly advise and cooperate with the other prior to issuing, or
permitting any of its subsidiaries, directors, officers, employees or agents
to issue, any press release or other information to the press or any third
party with respect to this Agreement or the transactions contemplated hereby.
5.7. Indemnification and Insurance.
(a) The Surviving Corporation and the Company agree that, except as may
be limited by applicable laws, for six years from and after the Effective
Time, the indemnification obligations set forth in the Company's Articles of
Incorporation and the Company's Bylaws, in each case as of the date of this
Agreement, shall survive the Merger and shall not be amended, repealed or
otherwise modified after the Effective Time in any manner that would adversely
affect the rights thereunder of the individuals who on or at any time prior to
the Effective Time were entitled to indemnification thereunder with respect to
matters occurring prior to the Effective Time.
(b) The Company shall maintain in effect, for three years or until the
applicable statute of limitations expires but in no event longer than four
years, from and after the Effective Time, directors' and officers' liability
insurance policies covering the persons who are currently covered in their
capacities as such directors and officers (the "Covered Parties") by the
Company's current directors' and officers' policies and on terms not
materially less favorable than the existing insurance coverage with respect
to matters occurring prior to the Effective Time; provided, however, in the
event the annual premium for such coverage exceeds an amount equal to 200% of
the last annual premium paid immediately prior to the date hereof by the
Company for such coverage, the Surviving Corporation shall notify the Covered
Parties who shall then elect as a group either (i) to allow the Surviving
Corporation to obtain as much comparable insurance as possible for an annual
premium equal to 200% of the last annual premium paid immediately prior to the
date hereof by the Company, or (ii) to seek coverage from another carrier, in
which event the Surviving Corporation shall reimburse the Covered Parties the
cost of such alternative coverage up to an amount equal to 200% of the last
annual premium paid immediately prior to the date hereof by the Company for
such coverage.
(c) In addition to, and not in lieu of the foregoing, the Surviving
Corporation shall indemnify, defend and hold harmless all officers and
directors of the Company (the "Indemnified Parties") to the fullest extent
permitted by Florida law and in the Articles of Incorporation and Bylaws of
the Company, as in effect as of the date hereof, from and against all
liabilities, costs, expenses and claims (including without limitation
reasonable legal fees and disbursements, which shall be paid, reimbursed or
advanced by the Surviving Corporation in a manner consistent with applicable
provisions of the Surviving Corporation's Bylaws) arising out of the actions
taken prior to the Effective Time in performance of their duties as directors
or officers of the Company, in connection with the Merger and other
transactions contemplated hereby, which may be asserted against the
Indemnified Parties from and after the date of this Agreement; provided,
however, that Surviving Corporation's obligations to the Indemnified Parties
under this Section 5.7(c) shall not be effective until consummation of the
Merger; provided, further, that the Surviving Corporation shall not have any
obligation hereunder to any Indemnified Party if the indemnification of such
Indemnified Party in the manner contemplated hereby is determined pursuant to
a final non-appealable judgment rendered by a court of competent jurisdiction
to be prohibited by applicable law or if the indemnification of the
Indemnified Party is not within the power of the Surviving Corporation under
Florida law.
d) In the event that any action, suit, proceeding or investigation
relating thereto or to the transactions contemplated by this Agreement is
commenced, whether before or after the Effective Time, the parties hereto
agree to cooperate and use their respective reasonable efforts to vigorously
defend against and respond thereto.
ARTICLE 6
CONDITIONS TO CONSUMMATION OF THE MERGER
6.1. Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger are subject to the
satisfaction at or prior to the Effective Time of each of the following
conditions:
(a) This Agreement shall have been approved and adopted by the
affirmative vote of the Company's shareholders by the requisite vote in
accordance with applicable law;
(b) No statute, rule, regulation, executive order, decree, order
or injunction shall have been enacted, entered, promulgated or enforced by
any court or governmental authority that prohibits or materially and
adversely restricts the consummation of the Merger;
6.2. Conditions to the Obligation of the Company to Effect the Merger.
The obligation of the Company to effect the Merger is further subject to the
satisfaction at or prior to the Effective Time of the following conditions:
(a) The representations and warranties of Parent and Sub contained
in this Agreement shall be true and correct at and as of the Effective Time as
if made at and as of such time, except as affected by the transactions
contemplated hereby;
(b) Each of Parent and Sub shall have performed its obligations
under this Agreement required to be performed by it at or prior to the
Effective Time pursuant to the terms hereof; and
(c) No statute, rule, regulation or temporary, preliminary or
permanent order or injunction shall have been proposed, promulgated, enacted,
entered, enforced or deemed applicable by any state, Federal or other
government authority, court or government agency of competent jurisdiction
that prohibits the consummation of the Merger or the transactions contemplated
hereby or thereby.
Parent and Sub will furnish the Company with such certificates and other
documents to evidence the fulfillment of the conditions set forth in this
Section 6.2 as the Company may reasonably request.
6.3. Conditions to Obligation of Parent and Sub to Effect the Merger.
The obligations of Parent and Sub to effect the Merger are further subject to
the satisfaction at or prior to the Effective Time of the following conditions:
(a) The representations and warranties of the Company contained in
this Agreement shall be true and correct at and as of the Effective Time as if
made at and as of such time, except as affected by the transactions
contemplated hereby;
(b) The Company shall have performed each of its obligations under
this Agreement required to be performed by it at or prior to the Effective
Time pursuant to the terms hereof;
(c) No statute, rule, regulation or temporary, preliminary or
permanent order or injunction shall have been proposed, promulgated, enacted,
entered, enforced or deemed applicable by any state, Federal or other
government authority, court or government agency of competent jurisdiction
that prohibits the consummation of the Merger or the transactions contemplated
hereby or thereby; and
The Company will furnish Parent and Sub with such certificates and other
documents to evidence the fulfillment of the conditions set forth in this
Section 6.3 as Parent or Sub may reasonably request.
ARTICLE 7
CLOSING
7.1. Time and Place. Subject to the provisions of Articles 6 and 8
hereof, the closing of the Merger contemplated hereby (the "Closing") shall
take place at the Company's offices at 385 Country Club Road, Stockbridge,
Georgia 30281, at 10:00 a.m., local time, on a date (the "Closing Date") that
is no later than the third business day after the satisfaction or waiver of
the conditions set forth in Article 6 hereof or such other place, at other
time, or on such other date as Parent, Sub and the Company may mutually agree
upon for the Closing to take place.
7.2. Deliveries at the Closing. At the Closing:
(a) There shall be delivered to Parent, Sub and the Company the
certificates and other documents and instruments, if any, provided to be
delivered under Article 6 hereof.
(b) Sub and the Company shall cause the articles of merger to be
filed in accordance with the provisions of the Florida Business Corporation
Act and the Georgia Business Corporation Code and shall take any and all other
lawful actions and do any and all other lawful things necessary to effect the
Merger and to enable the Merger to become effective.
ARTICLE 8
TERMINATION AND ABANDONMENT
8.1. Termination. Notwithstanding approval and adoption of this
Agreement by the Company's shareholders, this Agreement may be terminated,
and the Merger abandoned, at any time prior to the Effective Time of the
Merger:
(a) by the mutual consent of Parent, Sub and the Company; or
(b) automatically, without action by any party hereto, if at the
Shareholders' Meeting, the Company's shareholders shall have not voted to
adopt this Agreement in accordance with the requirements set forth in Section
6.1(a); or
(c) by either Parent or the Company if, without fault of the
terminating party, the Merger shall not have been consummated on or before
December 31, 1999; or
(d) by either Parent or the Company's Board of Directors if the
Special Committee shall have withdrawn or modified in a manner adverse to
Parent or Sub its approval or recommendation of the Merger, this Agreement
or the transactions contemplated hereby; or
(e) by either Parent or the Company if any of the events set
forth in Sections 6.1(b) shall have occurred and shall not have been, on or
before the date of such termination, permanently waived by Parent or the
Company, as the case may be; or
(f) by either Parent or the Company, if any court of competent
jurisdiction or other governmental body in the United States shall have
issued an order, judgment or decree (other than a temporary restraining order)
restraining, enjoining or otherwise prohibiting the Merger and such order,
judgment or decree shall have become final and nonappealable; or
(g) by the Company if , prior to the receipt of its shareholder
approval of the Merger, the Board of Directors of the Company or the Special
Committee determines in good faith, after consultation with outside counsel,
that it is necessary to do so in order to comply with its fiduciary duties to
the shareholders of the Company under applicable law; or
(h) by the Company if (i) any of the conditions set forth in
Sections 6.2(a) or (b) that are required to be satisfied at or prior to the
Closing shall not have been satisfied prior to the Closing or shall have
become incapable of being satisfied; or (ii) if any of the events set forth
in Sections 6.2(c) shall have occurred prior to the Closing and, in the case
of (i) or (ii), shall not have been, on or before the date of such
termination, permanently waived by the Company; provided, however, that in
the case of Sections 6.2(a) and (b), Parent and Sub shall not have cured such
breach, in all material respects, within 10 business days following the
receipt of written notice from the Company of such breach; or
(i) by Parent if (i) any of the conditions set forth in Sections
6.3(a) or (b) that are required to be satisfied at or prior to the Closing
shall not have been satisfied prior to the Closing or shall have become
incapable of being satisfied; or (ii) if any of the events set forth in
Sections 6.3(c) shall have occurred prior to the Closing and, in the case of
(i) or (ii), shall not have been, on or before the date of such termination,
permanently waived by Parent; provided, however, that in the case of Sections
6.3(a) and (b), the Company shall not have cured such breach, in all material
respects, within 10 business days following the receipt of written notice from
Parent of such breach.
8.2. Effect of Termination. In the event of the termination of this
Agreement and the Merger pursuant to Section 8.1, this Agreement shall
terminate and the Merger shall be abandoned without any further action by any
of the parties hereto. If this Agreement is terminated as provided herein, no
party hereto shall have any liability or further obligation hereunder to any
other party to this Agreement, provided, however, that (i) any termination by
the Company arising out of a breach by Parent or Sub of any representation,
warranty, covenant or agreement contained in this Agreement shall be without
prejudice to the rights of the Company to seek damages with respect thereto;
and (ii) any termination by Parent arising out of a breach by the Company of
any representation, warranty, covenant or agreement contained in this
Agreement shall be without prejudice to the rights of Parent or Sub to seek
damages with respect thereto; provided further, however, that the obligations
set forth in this Section 8.2 and in Section 9.1 hereof shall survive any
such termination and continue in effect thereafter.
ARTICLE 9
MISCELLANEOUS
9.1. Expenses. All costs and expenses incurred in connection with this
Agreement, and the transactions contemplated hereby and thereby, shall be
paid by the party incurring such costs and expenses.
9.2. No Survival of Representations and Warranties. The respective
representations and warranties of the Company, Parent and Sub contained
herein or in any certificate or letter delivered pursuant hereto shall expire
with, and be terminated and extinguished by, the effectiveness of the Merger
or the termination of this Agreement (whichever is earlier) and shall not
survive the Effective Time or such termination.
9.3. Headings. The descriptive headings of the several Articles and
Sections of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
9.4. Notices. All notices, demands, requests, or other communications
that may be or are required to be given, served, or sent by any party to any
other party pursuant to this Agreement shall be in writing and shall be hand
delivered, sent by overnight courier or mailed by first-class, registered or
certified mail, return receipt requested, postage prepaid, or transmitted by
telegram, telecopy or telex, addressed as follows:
If to Parent or Sub, to: Killearn, Inc.
1570 Rock Quarry Road, Suite B
Stockbridge, Georgia 30281
Attention: J.T. Williams, President
With a copy (which
shall not constitute
notice) to: Montello & Kenney, P.A.
777 Brickell Avenue, Suite 1070
Miami, Florida 33131
Attention: Louis R. Montello, Esquire
If to the Company, to: Killearn Properties, Inc.
385 Country Club Road
Stockbridge, Georgia 30281
Attention: Mallory E. Horne, Chairman of the
Board
With a copy (which
shall not constitute
notice) to: Greenberg, Traurig, P.A.
1221 Brickell Avenue
Miami, Florida 33131
Attention: Phillip J. Kushner, Esquire
Each party may designate by notice in writing a new address to which any
notice, demand, request or communication may thereafter be so given, served or
sent. Each notice, demand, request or communication that shall be hand
delivered, sent, mailed, telecopied or telexed in the manner described above,
or that shall be delivered to a telegraph company, shall be deemed
sufficiently given, served, sent, received or delivered for all purposes at
such time as it is delivered to the addressee (with the return receipt, the
delivery receipt, or (with respect to a telecopy or telex) the answer back
being deemed conclusive, but not exclusive, evidence of such delivery) or at
such time as delivery is refused by the addressee upon presentation.
9.5. Assignment. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto without the prior written consent of the other parties
except that Sub may assign all of its rights, interests and obligations
hereunder to Parent or another wholly owned subsidiary of Parent, provided
such subsidiary agrees in writing to be bound by all of the terms,
conditions and provisions contained herein.
9.6. Complete Agreement. This Agreement including the documents and
instruments referred to herein or delivered pursuant hereto together
constitute the entire understanding of the parties with respect to the Merger
and the related transactions and supersede all prior agreements and
understandings, both written and oral, among the parties, with respect thereto.
9.7. Modifications, Amendments and Waivers. At any time prior to the
Effective Time of the Merger (notwithstanding any shareholder approval), if
authorized by Parent, Sub and the Company and to the extent permitted by
law, (i) the parties hereto may, by written agreement, modify, amend or
supplement any term or provision of this Agreement; and (ii) any term or
provision of this Agreement may be waived by the party that is entitled to the
benefits thereof, provided that after such shareholder approval, no amendment
shall be made that decreases the consideration to be paid in the Merger
without shareholder approval. Any written instrument or agreement referred
to in this paragraph shall be validly and sufficiently authorized for the
purposes of this Agreement if signed on behalf of Parent, the Company and Sub
by a person authorized to sign this Agreement.
9.8. Counterparts. This Agreement may be executed in two or more
counterparts all of which shall be considered one and the same agreement and
each of which shall be deemed an original.
9.9. Governing Law. This Agreement shall be governed by the laws of the
State of Florida (regardless of the laws that might be applicable under
principles of conflicts of law) as to all matters, including, but not limited
to, matters of validity, interpretation, construction, effect, performance
and remedies.
9.10. Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to confer upon any other person
any rights or remedies of any nature whatsoever under or by reason of this
Agreement.
9.11. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect to the maximum extent
permitted by law and shall in no way be affected, impaired or invalidated.
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized
all as of the date first written above.
KILLEARN, INC.
By: /s/ J.T. Williams, Jr.
J.T. WILLIAMS, Jr.
President
KILLEARN DEVELOPMENT, INC.
By: /s/ David K. Williams
DAVID K. WILLIAMS,
President
KILLEARN PROPERTIES, INC.
By: /s/ Mallory E. Horne
MALLORY E. HORNE,
Chairman of the Board
APPENDIX B - Opinion of American Express Tax & Business Services, Inc.
Special Committee of the
Board of Directors
Killearn Properties, Inc.
We have been engaged to assist you in determining the fairness of a proposed
tender offer on the stock of Killearn Properties, Inc. ("KPI") made by
Killearn, Inc. ("KI") at $5.50 per share. Specifically, we have been asked
to ascribe values to the assets and liabilities of KPI and the resulting
value per share of KPI stock and to compare that value to the $5.50 per share
offer for the purpose of determining if the proposed offer is fair from a
financial point of view to the shareholders of KPI other than Killearn, Inc.
J. T. Williams, David K. Williams, both of whom are officers and directors of
KPI, and two other sons of J. T. Williams.
Our procedures are summarized below.
Among other things, we (i) considered financial information of the assets of
KPI furnished to us by management of KPI through January 31, 1999; (ii)
reviewed certain internal financial analyses and forecasts of sales and
development activities; (iii) analyzed publicly available information; (iv)
held discussions with management of KPI; (v) reviewed appraisals and sales
documents;(vi) historical stock market prices and trading volumes of KPI
stock; (vii) drafts of the merger agreement; and (viii) made such other
studies and inquiries and considered other data as deemed relevant.
Sales of Comparable Companies
A search for sales comparable companies produced no data on sales of
companies similar to KPI.
Comparable Company Analysis
A comparable company analysis was performed by us. We analyzed publicly
available information of the following:
Current enterprise value as a multiple of the last three years' earnings
before interest, taxes, depreciation and amortization (EBITDA); and current
EBITA. This analysis resulted in an implied value per share for KPI of
between $16.68 and $44.17.
Current enterprise value as a multiple of earnings for the last three years.
This multiple (the price - earnings ratio) resulted in implied values of
between $10.03 and $78.21 per share.
Current market value as a multiple of sales for the current year and the last
three years. This analysis resulted in an implied values ranging from $11.95
to $58.13 per share.
These implied values were not considered germane to the assignation of value
to KPI stock because they result in values that are not reasonable given
KPI's earnings history and potential without significant changes in KPI's
holdings and operations.
We also used comparable company information to derive current market value as
a multiple of book value for the current year and the last three years. This
analysis resulted in a range of values for the stock of KPI from $3.13 per
share to $9.55 per share.
Discounted Future Cash Flows
The fair value of the stock of KPI based upon the January 31, 1999 10-QSB and
our analysis, as discussed below, is as follows:
000's
Land held for development and sale $22,340
Other assets 1,414
Total assets 23,754
Debt 14,965
Other liabilities 4,686
Total liabilities 19,651
Net equity $4,103
There are numerous assumptions upon which this value is based. While most
are discussed elsewhere in this report, the more significant assumptions are
as follows:
KPI is a going concern; the values ascribed to land herein assume continued
viability of KPI.
KPI will develop and sell land for amounts approximating the amounts used
herein.
The company will have available to it sufficient capital to acquire and
develop land for sale in the future.
Our procedures surrounding land value consisted of developing forecasts of
development and sale of land parcels currently held by KPI. The sales prices
were based upon management's estimates of value, comparison with historical
sales values and comparison of values to appraisals. From these values, we
deducted commissions, general and administrative expenses, income taxes and
other amounts incident to the sale of the land or operation of KPI to arrive
at future estimated cash flows. These cash flows were discounted to their
present value using a 12% discount rate.
The parcel of land referred to as I75 and Octagon Road is subject to wide
valuation estimates. Split into two approximately equal parts, it consists
of 27.6 acres between the proposed Octagon Road and I75 and 29.7 acres
between the proposed Octagon Road and the golf
course.
The sales values of these parcels are summarized below:
000's
27.6 Acres 29.7 Acres
Independent Appraisal $7,867 $8,970
KPI Management $6,900 $2,970
Amount used in this report $7,590 $5,940
After reducing these amounts for commissions, taxes, general and
administrative expenses, and future development costs and discounting the
proceeds to January 31, 1999, the value of each share of stock of KPI using
the various amounts for sale of the I75 and Octagon Road parcels is as
follows:
Appraisal $6.27
KPI Management $2.92
In forecasts of future cash flows, events and circumstances frequently do not
occur as expected and there will usually be differences between the
forecasted and actual results. These differences may be material. We have
no responsibility to update this report for events and circumstances
occurring after the date of this report.
Liquidation Analysis
We analyzed a potential liquidation of KPI to determine if a liquidation
would result in a greater value per share than the proposed sale of stock to
KI. This analysis assumed the following:
Sale of land "as is", with no further development cost; and
Significant reduction of general and administrative costs.
The overall result of this analysis was that the decrease in sales value of
the land was significantly greater than the savings from cessation of
development activity. Also, because of the cessation of development
activity, the deferred tax liability, created out of timing differences in the
capitalization of real estate taxes and interest during development,
converts into a tax payable and further reduces the value of the stock.
The resulting value per share of a liquidation approaches zero. It clearly
is not in the best interest of the shareholders.
Summary
Based on the analysis set forth above, the transaction , as of the date
hereof, is, fair, from a financial point of view to the shareholders of KPI
other than Killearn, Inc., J. T. Williams, David K. Williams, and two other
sons of J. T. Williams.
/s/ American Express Tax and Business Services, Inc.
AMERICAN EXPRESS TAX AND BUSINESS SERVICES, INC.
May 10, 1999
APPENDIX C - TRANSACTIONS INVOLVING KILLEARN'S COMMON STOCK EFFECTED BY
PURCHASER AND OTHER AFFILIATES SINCE MAY 1, 1997 THROUGH THE EFFECTIVE DATE
OF THIS PROXY STATEMENT
DATE SHARES AMOUNT PURCHASER
08-01-97 7,000 $5.13 Killearn, Inc..
08-08-97 10,000 $5.50 Killearn, Inc..
08-08-97 15,000 $5.50 Killearn, Inc.
11-10-98 20,000 $6.00 Killearn, Inc.
11-11-98 20,000 $5.75 Killearn, Inc.
11-19-98 20,000 $4.00 Killearn, Inc.
11-19-98 20,000 $4.00 Killearn, Inc.
12-24-98 20,000 $4.75 Killearn, Inc.
12-28-98 11,100 $4.75 Killearn, Inc.
12-29-98 1,700 $4.75 Killearn, Inc.
01-05-99 3,200 $4.75 Killearn, Inc.
01-08-99 200 $4.75 Killearn, Inc.
01-19-99 1,000 $5.00 Killearn, Inc.
01-22-99 8,200 $5.00 Killearn, Inc.
Subtotal 157,400
12-14-98 58,746 * J.T. Williams Jr.
Subtotal 58,746
11-11-98 1,000 $5.50 David K. Williams
11-12-98 2,000 $5.00 David K. Williams
11-12-98 2,000 $5.00 David K. Williams
11-12-98 2,000 $5.50 David K. Williams
11-20-98 2,465 $4.6875 David K. Williams
11-20-98 522 $4.625 David K. Williams
Subtotal 9,987
12-04-98 1,000 $4.875 John R. Williams
12-04-98 2,000 $4.9375 John R. Williams
12-04-98 2,000 $5.00 John R. Williams
12-07-98 1,000 $5.00 John R. Williams
12-07-98 1,000 $5.0625 John R. Williams
12-08-98 1,000 $5.00 John R. Williams
12-15-98 500 $4.75 John R. Williams
12-15-98 500 $4.875 John R. Williams
01-13-99 1,000 $4.9375 John R. Williams
01-13-99 1,000 $4.9375 John R. Williams
Subtotal 11,000
Total 237,133
* Acquired by Mr. J. T. Williams, Jr., when the Company's Profit Sharing Plan
was dissolved. The stock price on the day that the shares were ditributed to
the beneficiary was $4.75.
