DOCKET NO.: 04-01353.001-C-2 and 04-01353.002-C-2
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indicated on the transfer declaration that it reflected market value.
Renzi opined the highest and best use of the subject property would be commercial, consistent with its zoning and that the existing hotel "would be a good proposed use on that site." In his cost approach, Renzi examined four sales and one sale offering to estimate a value for the subject's land. Three of the sales and the offering were in Crystal Lake and one was in Lake in the Hills. The comparables range in size from 143,312 to 1,001,880 square feet. Comparables 1 through 4 sold between November 2002 and December 2004 for prices ranging from $1,505,480 to $6,010,000 or from $5.49 to $10.50 per square foot of land area. Comparable 5, the sale offering, had an asking price of $999,000 or $6.81 per square foot. Renzi adjusted the comparables for differences when compared to the subject and estimated the subject's land value at $5.50 to $6.00 per square foot, or $4,750,000 rounded.
Regarding the subject's improvements, Renzi testified he consulted the Marshall Valuation Service Cost Manual and considered the subject to be a class B structure of average to good quality. He based this on the subject's steel framing with concrete floors and fireproofing and determined a base replacement cost of $135.00 per square foot. He made various adjustments to reflect sprinklers, and applied certain multipliers that included multi-story, perimeter, current cost, local area and comparative cost multipliers. This resulted in an adjusted replacement cost new of $133.00 per square foot or $19,791,996. The witness estimated physical deterioration at 30% and external obsolescence at 15%, deriving total accrued depreciation of $8,906,398. To the depreciated value of the improvements, Renzi added entrepreneurial profit of 8%, or $870,848, based on his experience and judgment, and a depreciated value of the site improvements of $100,000, also based on his judgment. After adding back the land value, he estimated a total value for the subject by the cost approach of $16,600,000.
Under the sales comparison approach, Renzi acknowledged there were no other full service hotels in the subject's area and selected five comparables located in Schaumburg, Rosemont, Vernon Hills, Crystal Lake and Hoffman Estates, Illinois. He testified it was important to examine properties that were similar in age when compared to the subject, but only comparable 2, the Rosemont Suites in Rosemont, was a full service hotel like the subject. Renzi testified his comparables 3, 4 and 5 required substantial upward adjustments because they were limited service hotels that lacked many of the subject's amenities. The five comparables sold between August 1999 and December 2003 for prices ranging from $2,750,000 to $42,950,000 or from $42,610 to $131,655 per room, net of FF&E (furniture, fixtures and equipment). The comparables were adjusted for such factors as contribution of the FF&E component, number of rooms, age, overall location, amenities and condition, as well as "the inclusion of good-will within the
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