Jacques O. Tuchler & Associates REAL ESTATE APPRAISERS & CONSULTANTS ‘Coat Boat = Bate B00 + Bosir Now Vou TIRE = Te (76) EDIBD » Fax (18) TEES «Carat wahoo ane November 6, 2009 Charles S. Webb, III, Esq. Berger & Webb, LLP 1633 Broadway, 46" Floor New York, NY 10019 Subject: Street on Pacific Street from Carlton to Vanderbilt Avenues, Brooklyn, NY 11238 Dear Mr. Webb: ‘At your request on behalf of your client, Empire State Development Corporation (‘ESDC’), we have prepared this Phase 11 appraisal for the subject street for the Purpose of providing an opinion of a range of or specific Market Value as of our ‘September 24, 2009 inspection. This 57,750 square foot street is part of the 22-acre proposed Atlantic Yards project, bounded by Flatbush, Atlantic & Vanderbilt Avenues and Dean Street, together with a portion of Site 5 of the Atlantic Terminal Urban Renewal Plan, on a block bounded by Flatbush & 4” Avenues & Pacific Street. The legal description for the site itself follows: BEGINNING at the comer formed by intersection of the easterly side of Carleton Avenue with the northerly side of Pacific Street; Running Thence easterly along the northerly side of Pacific Street 825 feet to the westerly side of Vanderbilt Avenue; Thence southerly at right angles to the last mentioned course, 70 feet to the southerly side of Pacific Street; Thence westerly at right angles to the last mentioned course along the southerly side of Pacific Street, 825 feet to the easterly side of Carleton Avenue; Thence northerly at right angles to the last mentioned course, 70 feet to the point or place of beginning. As is typical of other streets, this street is not zoned and has limited utility for any use. Because nearby properties have commercial, residential or mixed zoning, the zoning of the sales analyzed is similar, except that they have far greater utility. ContinuedCharles S. Webb, Ill, Esq, November 6, 2009 Berger & Webb, LLP Page 2-Pacific Steet ‘The site is located in Prospect Heights across the street from the rail yards with the ‘Atlantic Center enclosed shopping mall two blocks to the west at Flatbush Avenue, a busy commercial thoroughfare that runs the full length of Brooklyn. Also nearby are P.C. Richard and Modells. it has easy access via MTA trains and buses, the Manhattan and Brooklyn Bridges, and the Brooklyn Queens Expressway. Based upon an investigation and analysis of all available data pertinent to value, ‘especially prices paid for other iand in the market area, recognizing the superiority of the sales in terms of utility, it is my opinion that the range of and specific value for the subject street as of September 24, 2008, is Range of Value ‘Two Hundred Twenty to Two Hundred Forty-Five Thousand Dollars ($220,000 - $245,000) Specific $4.00 Per Buildable S/F ‘Two Hundred Thirty Thousand Dollars ($230,000) ‘As of September 24, 2009 This is the final phase of an agreed to Phase Il appraisal. Descriptions of the property's region, district, neighborhood and site, and further documentation supporting my opinions and conclusions, are in my files and wil be forthcoming if and when requested. This submission complies with the request of my olient, and guidelines of the Uniform Standards of Professional Appraisal Practice (USPAP), the Appraisal Institute's Code of Professional Ethics & Standards of Professional Practice, and other jurisdictional organizations. Respectfully submitted, Doris Siber, NYS Ce | Estate General Appraiser #2891Assumptions & Limiting Conditions |. No opinion is intended to be expressed for legal or other matters which would require specialized investigation or knowledge beyond that ordinarily employed by real estate appraisers, although such matters may be discussed herein. . No opinion regarding title is rendered. Title data and the legal description were obtained from sources deemed reliable. Title is assumed to be marketable and free and clear of all liens and encumbrances, easements, and restrictions, except those specifically discussed in the report. The property is appraised as though available for its highest and best use. The appraiser has not made an engineering survey. Except as specifically stated, sizes and areas were taken from sources deemed reliable. No encroachment of real property improvements is assumed to exist, unless otherwise stated in this report. . Maps, plats and exhibits included herein are for illustration only, as an aid in visualizing matters discussed within the report. They should not be considered as surveys, or relied upon for any other purpose. The information furnished by others is believed to be reliable. No warranty, however, is given for its accuracy. . Unless otherwise stated in this report, the appraiser is not aware of any hidden or inapparent conditions of the site, subsoil or structures rendering the property more or less valuable, and assume no obligation for arranging engineering studies that may be required for discovery. . Full compliance with all applicable federal, state, and local environmental regulations and laws are assumed, unless noncompliance is stated, defined and considered, . It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless nonconformity is stated, defined, and considered in the appraisal report. . It is assumed that all required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, or national govemment or private entity, etc. have been or can be obtained or renewed for any use on which the reported opinion of value is based. Jacques O. Tuchler & Associates10. 11. 12. 13. 14, 15. 16. 47. Assumptions & Limiting Conditions Projections herein used to assist in the valuation process are based on market conditions and anticipated short term supply and demand factors as of the effective date of the appraisal and a continued stable economy. Thus, they are subject to changes in future conditions that cannot be accurately predicated by the appraiser, and which could affect future income or value projections. The areas discussed were calculated in accord with standards developed by The ‘American Standards Association (Real Estate Appraisal Terminology). The appraiser is not qualified to detect the existence or extent of existing potentially hazardous material on or near the site. Existence of such substances usually has an effect on the value of real property. Therefore, no consideration is given in the analysis to any diminution in value for the cost to remove such hazardous materials if they do exist. Possession of this report, or a copy, does not carry with it the right of publication. It may not be used for any purpose by any person other than the addressee without the written consent of the appraisers and, in any event, only with properly written qualification, and only in its entirety. The appraiser, by reason of this appraisal, is not required to give further consultation, testimony, or attend court as to this property unless prior arrangements have been made. Disclosure of the contents of this report is governed by the By-Laws and Regulations of the Appraisal Institute. Neither all nor part of this report (especially the value conclusion, identity of the appraiser, or firm with which the appraiser is connected) shall be disseminated to the public through advertising, public relations, news, sales, or other media without the appraiser's prior written consent. Acceptance or use of this appraisal report constitutes acceptance of these Assumptions and Limiting Conditions, and the statements in “Certification”. This appraisal is made under the reasonable assumption that the subject street is not buildable. If information to the contrary is provided, the appraiser reserves the right to reappraise the street if so justified after negotiating a new appraisal fee. Jacques ©. Tuchler & AssociatesProperty Interest: Location: The Site: Frontages: Zon Census Tract: Flood Zone: Neighborhood: Highest & Best Use: Market Value: Salient Property Data Pacific Street Brooklyn, New York 11217 Fee Simple Estate Between Carlton and Vanderbilt Avenues City street with 57,750 Square Feet (Actual & Buildable). Pacific Street as well as both Carlton & Vanderbilt Avenues ‘Assumed similar to the sales in the surrounding areas 0129.02 FEMA Panel #360497-62B. Zone X: Not Flood Hazard Area Prospect Heights: Predominantly middle-income residential neighborhood served by adequate community services, good vehicular and mass transit access, and other urban amenities (schools, churches, health care, shopping, etc.), as well as ongoing demand for housing. Residential or mixed commercial/residential, Fee Simple Estate as of September 24, 2009 By Sales Comparison Approach $4.00 Per Buildable S/F x 57,750 = $231,000, Say ‘Two Hundred Thirty Thousand Dollars ($230,000) Jacques O. Tuchler & AssociatesSales Comparison Approach The land sales considered most comparable to the subject are analyzed on a price per buildable S/F basis based upon permissible maximum FAR for residentially zoned sites (highest and best use of the subject). Since there were no reasonably recent sales of similarly sized parcels in Prospect Heights, our search was expanded to nearby areas and also included sales of smaller lots (some with small buildings and low lot coverage that were subsequently demolished for redevelopment) in competitive neighborhoods. Due to the slow-down in the residential development market from 2008 to the effective date of valuation, Sales #1 & #2 are adjusted downward by 10% for time. Because the sales were all cash or conventionally financed, they do not require financing adjustments. Zoning adjustments are made - zoning is already reflected in price per buildable square foot. Other adjustments considered in this analysis are: Location: Neighborhood growth rate, access, supply/demand factors as compared to the subject. Sale #3 is comparable; the other sales are slightly inferior. Size: The sales are all much smaller than the subject. Downward adjustments are made because higher unit prices are typically paid for smaller sites. Other: After all the other adjustments are made, a 95% downward adjustment is made to the adjusted unit prices to reflect superiority in terms of buildability. Comments: Range of Value from the Sales = $220,000 - $245,000 Estimated for The Subject: 57,750 Buildable S/F @ $4.00 = $231,000, Say ‘Two Hundred Thirty Thousand Dollars ($230,000) As of September 24, 2009 Jacques 0. Tuchler & Associates 6Sale #1: Sale #2: Sale #3: Sale #4: Sales Comparison Approach 532 Coney Island Avenue, Kensington. 10,760 s/f, C8-2 zoned site sold 8/08 at $2,250,000 all cash/$105 psf buildable. Adjusted for time, inferior location and size to $71 psf before 95% utility deduction ($3.55). 1118 36” Street & 1127 37" Street, Borough Park. 8,278 s/f, M1-2 zoned site sold 8/08 at $1,500,000 all cash/$91 psf buildable. Adjusted for time, inferior location and size to $61 before 95% utility deduction ($3.05). 901 Dean Street, Prospect Heights. 8,325 s/f, M1-1 zoned site sold 8/09 at $950,000 all cash or $114 psf buildable. Adjusted -35% for much smaller size to $74 psf before 95% deduction for utility ($3.70). 942 62" Street aka 6202 Ft. Hamilton Parkway, Sunset Park. 11,185 s/f, C2-3/R5B/R6B zoned site sold 5/09 at $3,000,000 or $134 psf buildable. Adjusted for inferior zoning and smaller size to $101 before 95% deduction for utility ($5.05). Adjusted Range: _ $3.05 to $5.05 Per Buildable Square Foot Range For Subject: $220,000-$245,000 PSF Subject: $4.00 Per Buildable S/F x 57,750 = $231,000, Say ‘Two Hundred Thirty Thousand Dollars ($230,000), Jacques 0. Tuchler & Associates 7Sales Comparison Approach eatctond ieeee ny an ‘oe fenton Net aumen Ae pr Babe SF sala Pe Bie Dosen hen Saab Se Senate Mapas ae | ee ST coll —— tase eo a oe # » is & &B ance Eos 273M atom Pe Py Buca Pak Prt Set Pk Saises Ta Fan te oe Tae ma Ms caanitinas ase os zm Ace sneer sisthome seine steno o sue sm m oe x ws m 01 Jacques 0. Tuchler & Associates:Sales Comparison Approach COMPARABLE SALES MAPSale #1 532 Coney Island Avenue Brooklyn, New York Jacques O. Tuchler & Associates 9Location: The Land: Plot Area: Zone: Site: Deed: Grantor: Grantee: Sale #1 532 Coney Island Avenue, Kensington Northwest Comer of Hinkley Place Block 5342 Lot 19, Brooklyn, NY 400’ x 111.29" x slightly irregular 10,760 S/F Buildable: 21,520 S/F C8-2 “Commercial” District One-story, brick and concrete block, 2,160 sif, circa 1931, Class "G9" auto-repair garage building subsequently demolished. Dated: 8/20/08 Recorded: 10/16/08 Transfer Tax: $9,000 David Oil Corp., c/o Henry Alpert, President 3333 New Hyde Park Road, Suite 201 New Hyde Park, NY 524 Coney Island Associates LLC c/o Joseph Yunatanov 70-13 Austin Street, Suite 3F Forest Hills, NY Indicated Consideration: $2,250,000 - All Cash Price PSF Buildable Comments: $105.00 Grantee filed plans for redevelopment with a hotel. Jacques O. Tuchler & Associates 10Sale #2 1118 36" Street & 1127 37" Street Brooklyn, New York Jacques O. Tuchler & Associates. "1Location: The Land: Plot Area: Zone: Site: Lot Coverage: Deed: Grantor: Grantee: Sale #2 1118 36” Street & 1127 37" Street, Borough Park ‘S/S 260’ West of 12" Avenue Block 5292 Lots 15 & 35, Brooklyn, NY 80° x 83' x slightly irregular 8,278 S/F (Combined) _Buildable 16,556 S/F M1-2 “Manufacturing” District One-story, brick and concrete block, 572 sif, circa 1931, Class "G9", auto-repair garage building subsequently demolished. 1% Dated: 8/6/08 Recorded: 8/20/08 Transfer Tax: $6,000 Euegene R. Steinhard et al. 6420 Boca Del Mar Drive, Unit #404 Boca Raton, Florida 1118 36" Street Associates LLC clo Joseph Yunatanov 70-13 Austin Street, Suite 3F Forest Hills, NY Indicated Consideration: $1,500,000 — All Cash Price PSF Buildable: $91.00 ‘Comments: Grantee (same as Sale #1) filed plans for development of a hotel, Jacques 0. Tuchler & Associates 12Note Photo & Detailed Report on Sale #3 901 Dean Street to Follow Jacques 0. Tuchler & Associates:Sale #4 942 62" Street aka 6202 Ft. Hamilton Parkway Brooklyn, New York Jacques 0. Tuchler & Associates 44Location: Plot Area: Zone: Site: Deed: Grantor: Grantee: Sale #4 942 62” Street aka 6202 Ft. Hamilton Parkway Block 5729 Lot 24, Brookiyn, N.Y. 11,185 SIF Buildable 22,370 S/F C1-3 “Commercial” in R5B “Residential” District One-story, 4,245 s/f, brick/concrete block, circa 1961, Class "G9", garage building demolished for redevelopment. Dated: 5/28/09 Recorded: 6/15/09 CRFN 200900181078 Frances Coles Defined Benefit Retirement Plan Frances Cole, Trustee 410 East 7" Street New York, NY 10022 New York City School Construction Authority 30-30 Thompson Avenue Long Island City, NY 11101 Indicated Consideration: $3,000,000 All Cash Price PSF Buildable: $134.00 Comments: Grantee constructing a public school. Jacques 0. Tuchler & Associates: 45Certification |, Doris Silber, certify that, to the best of my knowledge and belief Ihave personally inspected the subject site. ‘The statements of fact contained in this report are true and correct. ‘The reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, unbiased professional analyses, ‘opinions and conclusions. My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. As of the date of this report, I have completed the Appraisal Institute's Continuing: Education requirements, and have MAI recertification. | have no present or contemplated interest in the property that is the subject ofthis report, ‘or personal interest or bias with respect to the interested parties. My compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment Of a stipulated resut, or the occurrence of a subsequent event. | am in compliance with the Competency Provision in Uniform Standards of Professional Appraisal Practices as adopted by the Board of Governors of the Federal Reserve System under Title XI of the FIRREA 1989 (as amended), and have sufficient education and ‘experience to perform the appraisal of the subject property ‘This appraisal report was prepared in conformity with and is subject to requirements of USPAP as adopted by FIRREA 1989 and as amended, and the Code of Professional Ethics and the Standards of Professional Practice of the Appraisal Institute, and is subject to review by its duly authorized representatives. No one provided me with significant professional assistance. ‘This appraisal assignment was not based on a requested minimum loan valuation, a specific valuation, or the approval of a loan. Doris Siber, MAI, NYS Certified R.E! General Appraiser Jacques O. Tuchler & Associates 16Jacques O. Tuchler & Associates Real Estate Appraisers, Reviewers & Consultants 26 Court Street, Suite 2301 Brooklyn, New York 11242 Phone (718) 625-2080 « Fax (718) 797-5531 » Email: tuchlerassociates@att.net This firm was established over fifty (50) years ago by Jacques O. Tuchler, MAI, SRPA, and, since February 1990, has been under sole proprietorship of Doris Silber, MAI, who has been associated with the firm for over twenty-five (25) years, and a general partner since 1985. As one of the oldest professional real estate appraisal firms in New York City, Jacques O. Tuchler & Associates serves banks, insurance companies, law firms, utility companies, goverment agencies, and individuals requiring evaluations, consultations and appraisals of real estate throughout metropolitan New York, and Nassau, Suffolk & Westchester counties. Property Types: Existing and proposed retail, commercial, office, medical, industrial, residential, specialty, community facility, and mixed-use buildings; cooperative/condominium developments, garden apartment complexes; gasoline sales and service stations; hotels, motels; shopping centers; houses of worship; theaters; nursing homes, assisted living facilities, and vacant land. Projects involving conventional or special government financing, 3” party transfers, real estate tax exemptions and/or abatements, tax credits, IDA, ICIP, 421, J51, among others. Special Appraisal & Appraisal Service Projects: * City-owned sites involved in part of South Street Seaport Urban Renewal. * The Loews Kings, Pavilion, and Fortway movie theatres, among others. « Investment evaluation of alternate use of a dormitory for Pratt Institute * 20 metropolitan banking institutions and branches for Federal Home Loan Bank Board, as well as other headquarters and branches for other clients. *A weekend retreat, senior citizen residence, churches, and other community use facilities for the Roman Catholic Diocese of Brooklyn.Jacques O. Tuchler & Associates School sites, headquarters, housing, a gymnasium and recreation center in Brooklyn and Long Island for The Sisters of Mercy. Bungalow colonies in the Catskill Mountains region. SROs, Class B hotels, theaters, schools, nursing homes, assisted living facilities, landmarked sites, community use facilities, and building shells proposed for rehabilitation and/or conversion for various governmental and not-for-profit agencies. New York City Partnership Home projects scheduled for construction in the boroughs of Bronx, Brooklyn, Manhattan, and Queens. Industrial, residential and mixed-use properties, and used auto facility and gas stations in Sunset Park, Brooklyn, NY for the New York City School Construction Authority. Third Party Transfer residential properties for JPMorgan Chase Bank and Citibank. Fulton Ferry Fireboat House parcels for NYC Economic Development Corporation. Appraisals for the City of New York in matters of bankruptcy and certiorari. Appraisals, conferences and expert testimony for New York City Law Department, (Condemnation & Tort Divisions) in urban renewal and capital projects; examples are Brooklyn Williamsburg II, Caribe Village, Columbia Street, East New York Industrial, Broadway Triangle, Saratoga Square, Coney Island, Atlantic Terminal, Brooklyn Center, Flatbush Commercial Revitalization, Municipal Parking Sites, and Newtown Creek. Queens Louis Armstrong Memorial Project, Springfield Gardens Road Widening, and Bamwell Replacement Site. Bronx Gun Hill Road, Bronx River Avenue, Major Deegan Expressway. Manhattan Pueblo Nuevo Houses, Lower East Side Phases | & II, West Village Houses, Harlem/East Harlem, Piers 16 & 17. Staten Island Conference House Park Addition (Biddle House).Partial List of Clients Served * ‘Abacus Bank ‘Amalgamated Bank of New York ‘American Savings and Loan Anchor Savings Bank Atlantic Liberty Savings, FA Banco Popular Bank of New York Bank of Tokyo Bank of Venezuela JPMorgan Chase Citibank, NA Cohoes Bank Columbia Federal Savings Bank New York Community Bank Country Bank Dime Savings Bank DPD Bank Federal Home Loan Bank Board Fidelity Bank First Nationwide Bank Gotham Bank of New York Greater New York Savings Bank Independence Community Bank Lehman Brothers Lincoln Savings Bank Lockport Savings Bank Manufacturers Hanover Trust Marine Midland Bank Orix USA Peoples Bank of Pennsylvania Queens County Savings Bank Roosevelt Savings Bank Republic National Bank Seamen's Bank for Savings Yasuda Trust and Banking Co., Ltd. Equitable Life Assurance Society * Some have since consolidated or were taken over.Partial List of Clients Served (Cont'd) Pratt Institute Roman Catholic Diocese State of New York Mortgage Agency State of New York Dormitory Authority New York State Office of Mental Health NYS Facilities Development Corporation City of New York, Law Department City of New York, Public Development Corporation City of New York Economic Development Corporation City University of New York New York City Schoo! Construction Authority Public Administrator, Kings County & New York County: Housing Preservation & Development Corporation U.S. Attomey's Office - Eastem District of New York U.S. Government, Veterans Administration U.S. Government, General Services Administration U.S. Department of Commerce Port Authority of New York & New Jersey Exxon Standard Oil Company Gul Oil & Refining Company Chas. Pfizer & Company Brooklyn Union Gas Company Consolidated Edison Federal Deposit Insurance Corporation Health Insurance Plan of Greater New York Kodak Corporation Maimonides Hospital Midland Loan Services Corp. Resolution Trust Corporation Toyota Motor Credit Corporation Trotter-Kent, Inc. Urban Markets, Inc.DORIS SILBER, MAI REAL ESTATE APPRAISER & CONSULTANT/REVIEW APPRAISER Education: Continuing The Appraisal Institute: MAI Designation in 1991 Mandatory Continuing Education requirements completed to 2011 Brooklyn College: Real Estate Salesperson Course Bernard M. Baruch College of Business Administration Standards of Professional Appraisal Practice Hotel & Motel Valuation Federal Income Tax & Real Estate Certiorari Proceedings in New York Comprehensive Real Estate Appraisal Workshop Understanding Limited Appraisals & Appraisal Reporting Options/General Dynamics of Office Building Valuation Appraising for Litigation Purposes Appraising Special Purpose Properties International Valuation Sophisticated Techniques of Real Estate Finance Valuation of Affordable Housing New York City Apartment Buildings Real Estate Analysis and Consulting in the Future - What To Expect Uniform Standards of Professional Practice (Parts A & B) Current Issues in Real Estate Finance Real Estate Value Cycles State of the Market (Post Sept. 11) Rebuilding New York City Case Studies in Limited Partnerships & Common Tenancy Valuation Financial Feasibility Analysis; Marketing, Financing & Investing in Real Estate Uniform Standards of Professional Appraisal Practice Course 400-2003 Attacking and Defending an Appraisal in Litigation / Part I! Uniform Standards of Professional Appraisal Practice Update / 400-2005 Trends & Projections Affecting Real Estate Values Brooklyn Chamber of Commerce Browrfield Re-Development Conference AWRICS Joint Valuation Conference 3/2008 Business Practices & Ethics Course 1142N (#420) / 2008 Supporting Capitalization Rates AVRICS International Conference: Global Valuation Excellence / 3/2007: Challenges of Development in New York Appraiser as an Expert Witness Issues: Legislation, Incentives, Community Boards & What To Build in Today's Climate Forecasting Revenue / 2008 Appraisal of Nursing Facilities 2512-09 8/2008 National USPAP Update Course 1400 / 2009Employment: Panels: Licenses & Certifications: Professional Affiliations: Testimony: DORIS SILBER, MAI Jacques O. Tuchler & Associates Sole proprietor of the firm: responsibilities include day-to-day management, real property appraisals and review, and client development. Valuation and consultation services for all property types for over twenty-five (25) years. NYC Law Department, Tax Certiorari & Condemnation Divisions NYC School Construction Authority Resolution Trust Corporation Metropolitan Transportation Authority United States General Services Administration New York State General Services Administration NYS Real Estate Salesperson NYS Certified R.E. General Appraiser #46-2891 NYS Certified R.E. Instructor, All Categories NYCINYS Certified Woman-Owned Business Enterprise National Association of Female Executives Women Impacting Public Policy Brooklyn Chamber of Commerce Real Estate Board of New York, Inc. American Women Economic Development Member Brooklyn Museum of Art MAI Designation, The Appraisal Institute Continuing Education Requirements Completed, and Currently Recertified as an MAI Qualified Real Estate Expert in matters including arbitration, bankruptcy, tax certiorari, condemnation, and divorce.Range of Value & Market Value of Fifth Avenue (City Street) From Atlantic Avenue to Pacific Street Brooklyn, New York 11217 For Berger & Webb, LLP 1633 Broadway, 46” Floor New York, New York 10019 Representing The Empire State Development Corporation By Jacques O. Tuchler & Associates 26 Court Street, Suite 2301 Brooklyn, New York 11242See it RE es LR STE Ser SH, PMR ne an tel Soot aiipes meen nn tt i te ee Ye bevel bettie & sigs i male (iene Boban Wet ce eit CHINN sit a SHEE Gey wae tnd = soFt 59, sia TOT sag wit be iS ewER = eyo pomngmauedd while mony nat? ee A sleet Gauci O eager PERE (Na =D op & eS Kee eal e/aeR