DOCKET NO.: 05-00346.001-C-3
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divided in to land sales 2, 3, and 4. He testified that the only
location that might be better would be adjacent to the subject's
mall. Sale 5 was a 1.434 acre site adjacent to the subject mall
that sold in July 2005 for a price of $7.99 per square foot.
Sale 6 was a 1.5667 acre site adjacent to the mall that sold in
July 2005 for a price of $11.01 per square foot. At the time of
sale land sale 6 was improved with a medical office building,
which is still in place. The witness described sales 7 and 8 as
being related and part of a former Menards which was razed.
Gorman explained that land sales 9 and 10 were adjacent to
College Hills Mall in Normal and sold in June 2004 and September
2006 for prices of $10.00 and $11.00 per square foot,
respectively. Gorman testified that land sale 11 was improved
with a restaurant when it sold. The restaurant was to be razed
and replaced with a strip shopping center. Land sale 12 was the
farthest sale north of the subject property that was subsequently
improved with a bank. Based on these land sales Gorman estimated
the subject's land had a market value of $20.00 per square foot
or $2,000,000. He described this estimate as being conservative.
Gorman's next step under the cost approach was to estimate the
replacement cost new of the improvements using the Marshall
Valuation Service. Gorman's calculations were on page 40 of his
appraisal. He estimated the subject had a replacement cost new
of $64.65 per square foot resulting in a cost estimate of
$9,739,781. From this the appraiser deducted 10% for physical
depreciation using the age life method using the subject's age of
5 years and expected life of 50 years taken from the Marshall
Valuation Service. Gorman concluded the subject building
suffered from no functional or external obsolescence. The
appraiser than added $100,000 for site improvements and a land
value of $2,000,000 to arrive at an estimate of value under the
cost approach of $10,900,000. The witness was of the opinion his
estimate of the cost new was reasonable when compared to the
construction costs reported on Intervenor's Exhibit No. 1 of
$8,845,000.
The next approach to value developed by Gorman was the income
approach. The first step under this approach was to estimate the
subject's market rent. On page 41 of his appraisal Gorman stated
that, "As an anchor to a very large regional mall, the subject is
a type of big box that is typically either owner occupied or is
owned in common with the rest of the shopping center." In
estimating the subject's market rent the appraiser completed a
survey of anchor and big box stores. The appraisal included a
list of 49 stores with 23 located in Illinois. The appraisal
contained the company name, city, state, square footage, rent per
square foot and lease year for each rental comparable. The
appraisal did not otherwise distinguish or identify each of the
rental comparables as either an anchor store to a regional mall
or a freestanding big box store. The lease dates ranged from
