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BRKW APPRAISALS, INC. PAGE 3 Since legal permissibility is the first test of highest and best use that must be met, in most cases , the appraiser’s focus is on current zoning and its allowed uses, when concluding highest and best use. However, there are exceptions, including when there is clear evidence that there is little or no demand for the currently allowed uses, t here is demonstrable demand for other uses, and it is reasonably probable that the property could be rezoned to allow such other uses. In the assignment of valuing Property 1, a unique situation exists in that the client (City of Arden Hills) has indicate d that it is willing to rezone and reguide within the comprehensive plan the property for alternative uses, including commercial and three forms of residential (single -family, townhome and multi -family). Consequently, the appraiser is free to examine and evaluate all four uses, since the City has indicated that all four uses are potentially legally permissible. However, the appraiser is likely to conclude only one highest and best use of the land, that use being the one which is not only legally permissib le, but also physically possible, financially feasible, and represents the maximally productive use of the land. Any other use scenarios would then not reflect the highest and best use, but for the purposes of this appraisal, since the City has asked for four alternative use values, for each use valuation it would be assumed that such use is the highest and best use, to be consistent with the concept and definition of market value. In valuing Property 1, first the land will be valued based on the appraise r’s concluded highest and best use, which is anticipated to be one of the four use alternatives the city has asked the appraiser to address. T hen , three subsequent valuations will follow, based on the other three alternat ive assumed highest and best uses. It is anticipated that for the three alternat ive uses beyond the concluded highest and best use of the property , an extraordinary assumption will be applied. An extraordinary assumption is defined as “An assumption, directly related to a specific assignment, as of the effective date of assignment results, which, if found to be false, could alter the appr aiser’s opinions or conclusions.” (s ource: Uniform Standards of Professional Appraisal Practice (USPAP) 2016 -2017 Edition ©The Appraisal Foundation, Page 3 ). For the purposes of the appraisal , after valuing the land based on its concluded highest and best use , the land would then be valued based on the extraordinary assumption s that its highest and best use is for each of the three alternative uses previously mentioned. Property 2 – Existing City Hall Property The City has asked for four valuation scenarios for Property 2: 1. Value given development with commercial uses; 2. Value given development with single -family residential uses; 3. Value given development with townhome residential uses; and 4. Value given development with multi -family residential uses.