Fort Walton Beach Council agenda — 02-27-2007 workshop agenda — reading text

reconciled, the approach is carefully weighted, and the final value then determined. We have been asked to determine: 1) the market value "Of the land only for each subject parcel, and 2) a' reasonable market rent for the land only. of each subject parcel. As replacement costs of improvements are not a component of arriving at either value, the Cost Approach is being omitted from our valuation process. The Sales Comparison Approach is utilized to determine a market value of the land only for each subject parcel. The. Sales Comparison Approach' involves direct comparisons to the subject of similar properties that have, sold in the marketplace. This approach consists of searching the market for sales, qualifying, the sales prices and terms, comparing the sales to the subject property for differences, adjusting the sales for those differences, and formulating an opinion of value from the adjusted value indications. The sales which are utilized will be compared on a price paid per unit basis depending upon the typical unit used by market participants. The market- derived adjustments follow a specific, logical order so' as not to skew the results. The adjustments listed in order include: property rights,  20 financing, condition of sale, date of sale or market conditions, location and various physical adjustments. While an adjustment for each factor may not be required, they are considered, resulting in a comparable unit of measure. The units of comparison may be physical, such as dollars per square of , foot.. area, or they may be economic, such, as gross rent multipliers. These units of comparison yield a pattern that is reconciled and converted to a value indication for the subject via the Sales Comparison Approach. The second task is to determine a market rent for the land only of each subject parcel. A reasonable market rent for each subject parcel is determined through analysis of expected and actual returns on land leases; this analysis ' involves the Income Approach. The Income Approach to value is generally applicable to income- producing properties and not generally practical for properties in which no identified rental value exists. This approach utilizes the principle of anticipation, i.e~, that the value is the present worth of all future benefits accruing to ownership. These future benefits are generally in the form of income streams for a fixed period of time ( lease' term or estimated holding period), plus a capital sum at the end of the period or a discounted value of an assumed perpetual income. For our analysis, we have researched direct land leases, as well as leases involving recently sold land, to determine an expected rate of return for each ' subject parcel. This analysis is based on market expectations and limits. The expected annual rate of return is applied to the estimated market value of each parcel to derive a reasonable annual rent for each parcel.  21 GENERAL FORT WALTON BEACH AREA ANALYSIS, There are four basic interrelated forces that influence the value of a property: social ideals and standards, economic changes and adjustments, governmental controls and regulations, and physical or environmental changes.. These forces are complex, ever changing, and combine as cause and effect of changes which influence not only the general economy but every parcel of real property. These social, economic, governmental and environmental forces affect every phase of the valuation process, but are best discussed in this and the Neighborhood Data section of the report. We have considered each facet in the valuation of the property under consideration. LOCATION AND PHYSICAL FACTORS Fort Walton Beach is considered a major constituent part of the Fort Walton Beach- Crestview-Destin Metropolitan Statistical Area ( MSA). The Fort Walton Beach- Crestview-Destin MSA is located in the extreme northwestern portion of Florida, being in what is called the " Panhandle." Geographically, Fort Walton Beach is 140 miles west of Tallahassee, Florida; 200 miles east of New Orleans, Louisiana; 214 miles south of Birmingham, Alabama; and 264 miles south- southwest of Atlanta, Georgia. The Fort Walton Beach- Crestview.-Destin MSA encompasses all of Okaloosa County, Florida. Okaloosa County has a land area of approximately 936 square miles. Elevations range from sea level to 300 feet above sea level. Okaloosa County is bordered on the east by Walton County, on the west by Santa Rosa County, on the north by the State of Alabama, and on the south by the Gulf of Mexico. The' northern part of the county contains the easternmost portion of Blackwater State Forest, through which the Blackwater River runs. The Yellow and Shoal Rivers and their tributaries also run through northern Okaloosa County. Although none of the rivers are navigable waterways to the extent of contributing to the economy, all  22 offer pleasing views, recreational facilities and, generally contribute to the lifestyle " of the inhabitants. The southern portion of the county contains the' central portion of Eglin Air Force Base; there are pockets of civilian settlement as well, such as the communities of Fort Walton Beach, Destin, Shalimar, Mary Esther, Wright, Niceville, and Valparaiso. The City of Crestview, north of Eglin Air Force Base, is the county seat. Okaloosa County' s annual mean temperature is 67 degrees F with an average. annual rainfall of64 inches. The sun shines approximately 344 days a year, making,' Okaloosa County part' of the Sunbelt of the United States. In recent years the Sunbelt" states, especially Florida, have been growing in population faster than ' most other areas of the United States. POPULATION the U.S. Census Bureau, Okaloosa County had 170, 498 According to residents in 2000. The population of the MSA was estimated at 188, 939 for 2005, according to a study"of Florida' s metropolitan areas conducted by EhterpriseFlorida in June 2006. This represents a 10. 82% increase over a five- year period, or + 2. 16% per year. METROPOLITAN AREA TRANSPORTATION 98 Three major highways run east-west across the county. U.S. Highway traverses the far south of the county, connecting the City of Destin at the Walton County border to ' areas westward to the border with Santa Rosa County. U.S. Interstate 10 and U.S. Highway 90 run roughly parallel to each other from east at the Walton County border to the west at the border with Santa Rosa County, while is passing through the City of Crestview. The most significant north-south roadway State Road 85. S. R. 85 connects Fort Walton Beach in the south with the community of Laurel Hill in the extreme northeast, while passing through  23 Crestview. Okaloosa Regional Airport provides passenger and commercial aIr transportation to all parts of the country. There are also two other general aviation airports in, Okaloosa County, including Bob Sikes Airport located in the Okaloosa/ Crestview Industrial Airpark in the City of Crestview. Greyhound Bus Lines provides inter-city bus transportation. CSX Transportation Services provides freight service primarily through Crestview. Numerous common carrier truck lines serve the Okaloosa County area. Okaloosa County is conveniently located within 55 miles of the ports of Pensacola and Panama City, both of which are designated Foreign Trade Zones. The Gulf Intracoastal Waterway offers sheltered passage for shipboard cargo. POLITICAL-GOVERNMENTAL FACTORS The unincorporated areas of Okaloosa County are administered by the Okaloosa County Commission, whose five members are elected to four-year terms: The cities of Fort Walton Beach, Crestview, Destin, and Niceville have council/city manager systems of government. Council members are elected to four-year terms. The county currently has zoning ordinances in effect covering all of Okaloosa County. There is also a state- required Future Land Use Plan, which is designed to insure organized growth over its 20- year life. This plan is reviewed every five years to insure that it is keeping up with area needs. The plan can also be petitioned for changes. The major topics handled in the plan include consistency, environmental, threatened and endangered species, land-use approval on site plans, ,concurrency, and permitting. Law enforcement and public safety are provided by the Okaloosa County Sheriffs Office, as well as the local forces of other incorporated pockets within the, county. Florida Highway Patrol, Florida Marine Patrol, United States Coast Guard, and United States Federal Bureau of Investigations units also operate within the area.  24 General revenues are raised through an ad valorem tax system. The Okaloosa County Property Appraiser' s Office assesses the property at " just value" which is supposedly about 90% of market value. The current 2005 millage rates are as follows: unincorporated Okaloosa County is 12. 6284 mills, Fort Walton Beach is, 17. 3330 mills, Crestview is 19. 3620 mills, Niceville is 15. 8630 mills, Destin -is 14. 9930 mills, Valparaiso is 16. 3530 mills, Mary Esther is 15. 8630 mills, Shalimar is 16. 5930 mills, Laurel Hill is 12. 3630 mills, and Cinco Bayou is 16.4930 mills. MILITARY Three United States Air Force installations are located in Okaloosa County: They are Eglin Air Force Base, Hurlburt Field, and Duke Field. It is estimated that over one- quarter of all U.S. Department of Defense spending for base operations in the State of Florida is spent in Okaloosa County, making a significant economic impact on the area. Eglin Air Force Base is part of Air Force Material Command with the Air Armament Center (AAC) as the host unit. The AAC is responsible for development, acquisition, testing, deployment, and sustainment of all air-delivered weapon systems. , As such, technology-based business partnerships are encouraged to operate within the Okaloosa County area. Eglin directly employs around 24, 000 military and civilian