Lerchiston Property and Dopier Industries Merger - Essay Example

May 18, 2006 Lerchiston Property XXXXXXXXXXXXXXXX (address) Attention: Lerchiston Property - Depier Industries Board Members Re: Phase I PropertyAssessment of XXXXXXXXXXXXXX (address) We are pleased to submit our report describing the findings of Phase I Property Site Assessment of the above referenced site. For any question or further clarification on the report findings, please contact the undersigned at your convenience. Yours truly, Lerchiston Property Michael Jennings, M.E.Sc., P.Eng. Manager RATIONALE With the advent of Lerchiston Property' and Depier Industries' merger, it is imperative that a new company headquarters (HQ) be put up for the expediency of existing and potential clients, easy access for current and future suppliers and most important of all, for the smooth execution of quality service and brisk completion of varied business transactions. This review's intention was to carry out and complete a cursory assessment of the site in order to determine the site's viability in relation to the nature of the business and to ascertain if conditions exist that would indicate the possibility of environment/location liability. TEAM-MEMBER REQUIREMENTS The team has to have at least three (3) more members who suitably qualified and experienced aside from the Property Assessment Manager to enable the smooth and professional execution of the project's principal task of finding a viable headquarters for the firm. One is the Senior Property Appraiser who will be tasked to perform difficult technical valuation work in the classification and appraisal of real property for value assessment purposes and to assist in the training of subordinate appraisers in the theory and techniques of real property appraisals. The SPA's duties may include but are not limited to: Lead a group of appraisers or appraisal projects; trains and instructs appraisers in proper appraisal practices and procedures; reviews completed work of appraisers; leads assessment projects, including assisting with planning and coordination of projects; annually performs preliminary and final review on a large volume of complex valuation changes such as farm and forest property segregations and mergers; Verifies tax code changes with utility companies and validating values; processes valuation tax roll corrections and maximum assessed value (MAV) override calculations. Examines and reviews commercial, industrial, or complex residential/farm properties and complex improvements for type and quality of construction; investigates sales and listings of properties; gathers data on rentals, leases, and income and estimates value based on actual and potential capitalized earning capacity of the property; Computes proper portion of value of improvements to land; reviews land residual for equity with adjacent land. Collects various data including information regarding sales of land; determines current market value and documents basis for decision. Oversees and ensures quality control of computerized valuation process; reviews quality of new construction house diagram sketches; transfers digital photos into computerized appraisal system; Reviews and ensures quality control of computerized sketches of existing house dimensions. This person must have a working knowledge of -- Property tax system and adjustments necessary to compute assessed values resulting from corrections or adjustments to real market value; principles, practices and methods of real property appraisal; technical appraisal practices and procedures used in residential, commercial, farm, forest, manufactured housing and land appraisal, pertinent structural, economic, and environmental factors affecting property value; special assessment programs including farm, forest, wildlife habitat, historical, commercial facilities under construction, riparian and open space; construction techniques, blueprints, maps, property descriptions, quality of building materials, equipment, workmanship, and general construction quality and quantity as applied to all classes of building; factors affecting building appreciation and obsolescence; laws, regulations, and court decisions affecting the appraisal of land, buildings, boats and aircraft, structures and personal property; modern principles of real estate, appraisal, land mapping and surveying; digital cameras, computers and software applications. Likewise, the SPA should have substantial skill to -- Apply appraisal principles and techniques in the appraisal of difficult and varied types of real property; analyse uniformity and consistency throughout the appraisal process; interpret laws, regulations and court decisions affecting the appraisal of land, building, structures, and personal property; read and interpret blueprints, maps, property descriptions; draw sketches on improvements; keep accurate and detailed records; gather, evaluate, and convey accurate information; understand computer mass appraisal system components, calculation process and diagram sketching procedure; relate technical appraisal practices and procedures to computer appraisal models to achieve recalculated market values; communicate clearly and concisely in both oral and written presentations on technical matters; prepare and present oral and written reports; analyze and interpret statistical data and make sound recommendations for the guidance of other appraisers; establish and maintain effective working relationships with the general public, departmental staff and other agencies; train, motivate, lead and evaluate the work of others. Next is the Property Appraiser Projects Administrator (PAPA) whose principal tasks were: Conducts studies of complex departmental mass appraisal operating systems which control cost, market and income approaches to value and other elements of tax roll preparation and makes recommendations for improvements. Assists in the planning and management of departmental data processing operations. Supervises the implementation of computer system changes or implementation of new systems; coordinates development of computer programs for assessment system changes; monitors revised system operations. Supervises clerical and specialized property appraisal employees on a project basis as required. Prepares and monitors annual departmental budget; analyzes expenses and informs superiors of budget status. Manages departmental records in conformance with state regulations governing assessment records; advises superiors on need for changes or other actions in documents used in the computer-assisted mass appraisal process or other functions of the department. Assesses training needs and plans for training of departmental staff in cost, market and income approaches to value, the mass appraisal process, assessment administration and management techniques; prepares department newsletter. This person must have a thorough knowledge of property tax assessment and the mass appraisal process; of research techniques and sources and availability of current information pertaining to mass appraisal operating systems; adequate knowledge of data processing systems in use in the Property Appraisal Department; of departmental legal, procedural and administrative regulations; of supervisory principles and practices; know-how of budget preparation and administration; knowledge of the development and installation of specialised training programmes; most especially of state statutes pertaining to tax assessment records and documents; the ability to analyse complex mass appraisal operating systems and make effective recommendations for improvements; ability to assist in directing the implementation of new or revised computer systems; facility to analyse expenditures in relation to established budgets and furnish budget information to management officials; capacity to analyse departmental records and documents and assure conformance with state requirements; to plan and develop specialised training programs related to mass appraisal operating systems; ability to exercise resourcefulness and ingenuity in the design and improvement of work systems and methods; and the ability to establish and maintain effective working relationships with a variety of departmental and county officials. Another member of the team must be the Property Assessment Technician who provides primary support to professional staff in manufacturing or a comparable program area for complex property assessment and appraisal projects and/or program activities; establishes work priorities, assigns, and reviews the work of lower level personnel; trains new employees in unit procedures and policies; participates in developing, revising, and implementing policies and procedures; prepares evidence for appeals, hearings, and court proceedings. Required knowledge, skills, abilities and aptitudes include: Ability to guide the activities of other employees, develop procedures and set priorities Ability to keep records and make reports. Knowledge of basic mathematics necessary to compute totals, ratios, and percentages. Ability to work in close, effective cooperation with co-workers. Ability to learn, understand, and apply complex information relating to laws, rules, and procedures. Skill in mechanical drawing and machine reproduction of maps, plats, and charts with required degree of detail and specificity. Ability to operate a passenger automobile efficiently and safely. Finally, the Assessment and Equalisation Analyst who conducts property appraisal activities through the research of records, completion of comparisons to similar properties, establishing dollar values and determining appropriate property tax assessments; reviews and verifies tax exempt status; participates in the Annual Equalization Study Report by determining assessment levels, the dispersion of assessments in each county for each classification of property, average levels and personal property valuation schedules; conducts Geographic Information System (GIS) projects involving the design, compilation and analysis of computer and manual mapping resources; assists County Assessors and Boards of Equalization by conducting training at valuation schools, advising assessors of real estate application standards and in completing appraisals; appears in court or before Boards of Equalization as an expert witness. Skills and knowledge that this person should have would be: Knowledge of property valuation and appraisal techniques for rural and urban real estate; Understanding of state laws on municipal and county taxation; Know-how in computer assisted mass appraisal of real and personal property, computerized cadastral mapping techniques, geographic information systems, auditing techniques; Proficiency about land use potential of various real estate; Valuation techniques for application to machinery, vehicle, livestock and other non-real estate assets. THE SEARCH 1 - Information Dissemination / Response With the convergence of Lerchiston Property and Depier Industries, it was of the essence that everyone was informed of the big development. Aside from informing workers, suppliers, customers and everyone else who had a "need to know," it was crucial to get everyone's opinion and views regarding the merger and of the new headquarters. Positive comments and negative standpoints were all given due attention and were all weighed and being deliberated upon in preparation for possible problems and conflicts brought about by the amalgamation of the two business organisations or regarding the new location.. II - Factors for Consideration Some of the more common issues that the inspection team has decide to investigate and verify include: (1) common documents the prospective tenant/buyer should review; (2) physical conditions in the property the buyer/tenant must investigate; and (3) conditions affecting the surrounding area that the tenant/buyer should verify. As the search team rummaged around for commercial office space to house the new HQ, several interlocking decisions were faced during the assessment process. Everyone in the team was aware that at the end of the day (not to mention the end of the lease), the final choice would have considerable and consequential impact on the economic health of the company, and the morale and psychological well-being of its employees, shareholders, firm owners and the clients and suppliers that the two companies have dealt with. Here are the significant issues that have been factored in as the process of evaluation went under way: * Experience and access can reduce build-out costs -- In the arena of commercial real estate, more constructive pricing for tenant build-out or tenant improvements can be realised from general and subcontractors that are familiar with the specific buildings and business parks. During the search, a specific place has been favoured except that it was somewhat isolated or apart from a larger business community, with this kind of location, chances are that the contractors will have a "learning curve" before they can proceed with construction. Like for instance, where the underground utilities are located, how the HVAC system is configured and other questions that typically change from building to building. As it is, time is gold and always means money, so much so, that finding the answers to these questions will ultimately drive up the overall cost of the construction project. If these answers are already known, tenant build-out can begin more rapidly and often with less expense. * Critical mass decreases cost of amenities -- Business communities -- featuring a critical mass of companies and employees -- can more cost-effectively construct a range of amenities from conference rooms to health/fitness facilities. The level of sophistication, the increased expectation of employees, and the cost, is climbing upwards with regard to satellite teleconferencing systems, state-of-the-art fitness centers and auditoriums. However, these related costs can typically be spread over a larger concentration of tenants and their employees in the more cost effective manner. Size matters when negotiating vendor contracts -- Contracts for outside vendors such as snow removal, insurance or landscaping services can be negotiated significantly and more favorably when the landlord/owner is seeking to achieve volume discounts for a large-scale business community versus a single building. Because these costs are typically "passed through" to the end-user via the common-area maintenance charge this sometimes overlooked, yet important issue should be considered in the decision process. Growing pains don't have to hurt -- Most successful companies tend to expand early and often during the first several years of operation. A hypothetical question might be, if the organisation leases 5,000 square feet of space now, does the landlord have the capacity and availability of space to satisfy the requirement of 10,000 feet as the business begins to take off Getting shoe-horned into a building that offers little opportunity to expand can become a serious detriment to the success of a company, and leasing space in a different building can create other logistical and organisation problems. COMMON PHYSICAL CONDITIONS THAT MUST INVESTIGATED Repairs and New Construction The property may have an obvious improvement, covered patio, or garage, or may have been remodeled. The tenant/buyer should feel comfortable that the work was properly done. Request copies of any invoices or other repairs and documentation regarding the work performed. Roof Further inspection must be done by a licensed roofer especially if the roof is 10 years old or older. Square Footage An appraiser or architect can measure a property's size to verify the square footage. Sewer Even if there's an indication that the property is connected to the city sewer, it should be verified by a plumber, home inspector, or other professional. Some cities can perform this test as well. Septic and Other On-Site Wastewater Treatment Facilities If the property has a septic tank or other on-site wastewater treatment facility that was approved by a certain date, it must be inspected by a qualified inspector prior to transfer. Property Boundaries If the property boundaries are of concern, a survey may be warranted. For example, a survey may be advisable if there is an obvious use of property by others (i.e., a well-worn path across a property and/or parked cars on the property) or fences or structures of adjacent property owners that appear to be built on the property. Flood Plain Status If the property is in a flood zone, an additional annual insurance premium of several hundred dollars may be required. CONDITIONS AFFECTING THE AREA SURROUNDING THE PROPERTY THE TENANT/BUYER SHOULD INVESTIGATE Freeway Construction Although the existence of a freeway near the property may provide highly desirable access, sometimes it contributes to undesirable noise. Inspection team must check maps to find the nearest future freeway routes and roads in the area slated for widening. Crime Statistics Crime statistics, while an imperfect measurement at best, nevertheless provide some indication of the level of criminal activity in an area. A visit or phone call to other law enforcement agencies may also be advisable. Sex Offenders The presence of a sex offender in the vicinity of the property is not a fact that is required to be disclosed by the seller or agent. For the buyer's/tenant's protection, the significance of having a property inspected/assessed by a professional inspector/assessment team cannot be over-stressed. A property evaluation undertaking is a visual physical examination, designed to identify material defects in the property desired. The inspection/assessment team will generally provide the prospective tenant/buyer with a report detailing information about the property's condition. The evaluators and the report will point out existing problems and possible potential problems. The buyer/tenant can carefully review the report with the assessment team/assessor and inquire about any item of concern. Seller's Property Disclosure Statement (SPDS) Most sellers provide a SPDS. This document poses a variety of questions for the seller to answer about the property and its condition. A buyer/tenant should carefully review the SPDS and verify those statements of concern. OTHER METHODS TO OBTAIN INFORMATION ABOUT A PROPERTY Talk to Neighbors They can provide a wealth of information. Buyers/prospective tenants should always talk to the surrounding neighbors about the neighborhood and the history of the property being considered for purchase/lease. Drive around the Neighborhood Buyers/tenants should always drive around the neighborhood, preferably on different days at several different times of the day and evening, to investigate the surrounding area. ASSESSMENT PROCESS Objectives The purpose of Phase I Assessment was to identify any tangible or prospective sources of risk or liability on the subject property that may have been outcomes of past or present land use, construction activities and site management or operations. Scope and Limitations The phase consisted of: * An evaluation of historical and current documents pertaining to the site; * A reconnaissance inspection of the site; and * Interviews with people knowledgeable about the site. While this report offers an overview of potential concerns, both past and present, the ocular assessment is restricted by the availability of information at the time of the evaluation. It is possible that unreported disposal of waste or illegal activities damaging the status of the property may have occurred which could not be identified or recognised. The conclusions and recommendations regarding conditions that are presented in this report are based on a scope of work authorised by the Board members of the firms involved. LIMITATIONS 1) The work performed in this report was carried out in accordance with the Standard Terms of Conditions made part of the contract. The conclusions presented herein are based solely upon the scope of services and time and budgetary limitations described in our contract. 2) The report has been prepared in accordance with generally accepted environmental study and/or engineering practices. No other warranties, expressed or implied, are made as to the professional services provided under the terms of our contract and included in this report. 3) The services performed and outlined in this report were based, in part, upon visual observations of the site and attendant structures. The opinion cannot be extended to portions of the site that were unavailable for direct observation, reasonably beyond the control Lerchiston Property. 4) The objective of this report was to assess physical, social, environmental conditions at the site, within the context of our contract and existing regulations within the applicable jurisdiction. Evaluating compliance of past or future owners with applicable local, provincial and federal government laws and regulations was not included in the contract for services. 5) The conclusions of this report are based in part, on the information provided by others. The possibility remains that unexpected social or environmental conditions may be encountered at the site in locations not specifically investigated. Should such an event occur, Lerchiston Property must be notified in order that it can be determined if modifications to the conclusions are necessary. Note: After Phase I of this Property Assessment Project, further research will be undertaken to establish a baseline of existing services; predict future growth areas; explore the effect on rental rates, building value and tenant retention; review industry preferences for service procurement and offer insights into the negotiation and service agreement process. The methodologies to be used in the research involve a number of survey techniques that will reach both our members and their tenants. A committee of commercial real estate, telecommunications professionals and Lerchiston Property partners will help guide preparations for the research to ensure objectivity and reliability of the process. Among the factors to be measured are tenants' opinions of their lease, their space and their property owner's and manager's quality of service and support. That data will be analysed relative to tenants' past actions or future intentions to extend their lease. Likewise, the study will examine such basics as the length of tenancy in current location, reasons for selecting the current lease, the likelihood of renewing the lease in the current space, and reasons for staying or not staying. Additional factors will include the exploration of the quality of space, flexibility of lease terms, cost of space per square foot, quality of amenities, overall quality of the relationship with the owner/manager, and the responsiveness and understanding of the owner/manager to tenant needs. The need for this research is a direct result of an evolving landlord/manager and tenant relationship, which has taken on a more customer-service orientation in recent years as building owners and managers recognise that ending their involvement at the tenant's front door is no longer a viable business proposition. Readings/References http://www.realtor.com http://www.aaronline.com http://www.azsexoffender.org. http://www.appraisal.state.az.us/Directory/directory.html http://www.rc.state.az.us/Consumer_menu.html http://www.rc.state.az.us/Consumer_menu.htm www.bizjournal.com Read More

 

Read More