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Mr. Warren described the appraisal process and the five sample properties in his Report. He stated that although there is a retail development on the property now, in January, 1997, the date used for the equalization process, the possibility for commercial use was present. Mr. Warren said although he disagreed with Shapell's interpretation of the valuation process, he offered a compromise to Shapell Industries of $9 million, $18 per square foot, a low end estimate. Shapell Industries disagreed with the appraisal, filed an appeal, refused the compromise appraisal, and stated the value of the land was only $5,100,000. 2) Presentation by representatives ITom Shapell Industries; Elise Balgley, Attorney for Shapell Industries introduced Kurt Roessler, Shapell Industries' Appraiser. Mr. Roessler also explained in detail the concept of highest and best use. Mr. Roessler described his conversations with Mike Gibson, Chairman of the Redwood Shores Owners Association Architectural Review Committee, who stated the subject property had been designated for retail use, and mixed use commercial would not be acceptable to the Committee. Mr. Roessler said, therefore, the highest and best use for the subject property would be a retail shopping center and the appraisal should not be based on commercial or office use, but retail, which would reduce the value of the land. He referred to his Report, which the Directors did not receive in a timely manner, and suggested an assessed value of $7 million, or $14 per square foot, would be more appropriate, based on comparable retail use property sales. In response to Director Hartnett's questions, City Attorney said, "The property is appraised as of January 1, 1997. Consequently, the perspective for purposes of appraisal and valuation should be taken at that point in time. You are entitled to take into consideration comparable sales if they are available, and in that context to determine what in your view at the time of the appraisal... what would be the highest and best use and what would the market fetch for that development. You are entitled to take into consideration existing uses as of that time in the area and development plans which are authorized legally by the govemment. That is to say, the zoning of the property, the General Plan usage, and any special plan if one exists, and then consider the probability of development in the context of what you view the market would be likely to demand at that point in time. One of the elements of consideration mentioned by Mr. Roessler was the participation of an Architectural Review Committee which is actually a private architectural review committee... it is established by CC&R's of the Redwood Shores Owners Association. It is not a legally binding govemmental operation. On the other hand, in deference to Mr. Roessler's statements, I do not state that legally you must ignore that as evidence; but, should there be any question in your minds as to the effect of that body... that is a private review committee and does not operate as a governmental function. We have our own Architectural Review Committee, but mainly, as far as land use is concerned, that is determined by the Zoning and General Plan uses." Answering additional questions, Mr. Schricker said, BOARD OF EQUALIZA nON MEETING MINUTE BOOK NO. 56 JANUARY 5,1998 MINUTES Page No. 134 PAGE 2