Jacques O. Tuchler & Associates REAL ESTATE APPRAISERS & CONSULTANTS 25 Ca Se Sa ZT «Bl Now VOR TRE TT SETS + Fa TST Ema Toa wT November 6, 2008 Charles S. Webb, Ill, Esq. Berger & Webb, LLP 1633 Broadway, 46" Floor New York, NY 10019 Subject: Street on Fifth Avenue from Atlantic Avenue to Pacific Street Brooklyn, NY 11217 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 and specific Market Value as of our September 24, 2009 inspection. This 19,891 square foot street is part of the 22-acre proposed Atlantic Yards project, bounded by Flatbush, Atlantic and 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 westerly side of 5" ‘Avenue with the southerly side of Atlantic Avenue; Running Thence easterly 75 feet to the easterly side of 5" Avenue; Thence southerly along the easterly side of 5" Avenue, 267 feet to the southerly side of Pacific Street; Thence westerly along the southerly side of Pacific Street, 2 feet 2 inches to a point; Thence southerly 26 feet 8 inches to the northerly side of Flatoush Avenue; Thence northwesterly, 134 feet 37 inches to a point; thence easterly 26 feet 5 inches to the westerly side of 5" Avenue; thence at right angles to the last mentioned course, along the westerly side of 5" Avenue, 197 feet to the point or place of beginning. As is typical of other streets, this street is not zoned and has limited utlity 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 .Charies S. Webb, Ill, Esq. November 6, 2009 Berger & Webb, LLP Page 2-Fifth Avenue. ‘The site is located in Prospect Heights with the Atlantic Center enclosed shopping mall across 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 fand buses, Manhattan and Brookiyn Bridges, and the Brooklyn Queens Expressway. Based upon an investigation and analysis of all available data portinent to value, ‘especially prices paid for other land in the market area, recognizing the superioty of the sales in terms of utility, itis my opinion that a fair and reasonable range of vaiue and specific market value for the subject street as of November 8, 2009, is Two Hundred to Three Hundred Twenty-Five Thousand Dollars ($295,000 to $328,000) Specifically Three Hundred Ten Thousand Dollars ($310,000) This letter is the final phase of an agreed to Phase Il appraisal. Descriptions of the Property's region, district, neighborhood and site, as well as further documentation ‘supporting my opinions and conclusions, are in my files and will be forthcoming if and when requested. This submission complies with the request of my client, 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 organizations with jurisdiction over this profession, Respectfully submitted, Doris Silber NYS Certified Real Estate General Appraiser #2891 Se on Avene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 government 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 govemed 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 O. Tuchler & AssociatesSaSalient Property Data Street of 5 Avenue from Atlantic Avenue to Pacific Street Brooklyn, New York 11217 Property Interest: Fee Simple Estate The Site: City street with 19,891 Square Feet (68,425 SF Buildable). Frontages: On 5" Avenue as well as both Atlantic Avenue & Pacific Street Zone: Assumed similar to the sales — Residential/Commercial Census Tract: 0129.02 Flood Zone: FEMA Panel #360497-62B. Zone X: Not Flood Hazard Area Neighborhood: 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. Highest & Best Use: Residential or mixed commercial/residential. Market Valu Fee Simple Estate as of September 24, 2009 By Sales Comparison Approach $4.50 Per Buildable Square Foot x 68,425 = Say $310,000 Jacques 0, Tuchlor & Associates 5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 residential lots in competitive neighborhoods. Due to the slow-down in the residential development market from 2008 to the effective date of valuation, Sales #2 & #3 are adjusted downward 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: Desirability for residential uses, rate of neighborhood growth, access, and local supply/demand factors as compared to the subject. Comparable #1 in a superior location on a more desirable residential street, while the location of Sales #2 & #3 are slightly inferior. Size: The sales are all much smaller than the subject. Appropriate 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 = $295,000 - $325,000 Estimated for The Subject: 68,425 Buildable S/F @ $4.50 = $307,913, Say ‘Three Hundred Ten Thousand Dollars ($310,000) As of September 24, 2009 Jacques 0. Tuchler & Associates: 6Sales Comparison Approach oa ame Pe) Shee Pores Eater — Ne Adame js Pe pe Babe SF Dar Ro bane Se = Pate ve et ate Set Poet Bae s9000 ensr son a wamess Seas, Pah mise et “Witenes Wilt ere et wo 38 jase os sion shoo su sm ‘soe ins coy mR = 3 m » sit Jacques 0. Tuchler & AssociatesSales Comparison Approach Sree eteaerers rae Jacques 0. Tuchier & AssociatesVacant Land Sale #1 101-103 Boerum Place Brooklyn, New York Jacques 0. Tuchler & Associates 9Location: Zone: Plot Size: Plot Area: Buildable S/F: Deed: Grantor: Grantee: Vacant Land Sale #1 101-103 Boerum Place, Boerum Hill E/S 20’ S/O Pacific Street Block 187 Lots 6 & 7, Brooklyn, N.Y. R6 “Residential” (2.43x) 40’ x 60’ (Combined) 2,400 S/F (Total) 5,832 S/F (as per zoning) Dated: 5/6/09 Recorded: 6/1/09 Transfer Tax: $3,300.00 Gerald Kaplan & Linda Weiss, Executors clo Estate of Yetta Kaplan 101 Clark Street, Brooklyn, NY John & Jill Boratoglou 114 Bergen Street, Brookiyn, NY Indicated Consideration: $825,000 All Cash Price Per Buildable S/F: $141.46 Verified: By deed. Comments: Grantee filed plans to build a 4-story, 1 family dwelling on part of the site. Jacques 0. Tuchler & Associates 10Vacant Land Sale #2 181 Withers Street Brooklyn, New York Jacques 0. Tuchler & AssociatesLocation: Zone: Plot Size: Plot Area: Buildable S/F: Deed: Grantor: Grantee: Vacant Land Sale #2 184 Withers Street, East Williamsburg N/S 71’ E/O Graham Avenue Block 2740 Lot 101, Brooklyn, N.Y. C2-3 “Commercial” Overlay in R6 “Residential” (2.43x) 29° x 52" 4,508 S/F 3,664 S/F (as per zoning) Dated: 2/14/08 Recorded: 2/22/08 Transfer Tax: $1,700.00 Withers Property Plaza, LLC clo Joseph Verdi, Managing Member 181 Withers Street, Brooklyn, NY 181 Withers St., LLC clo Emesto Cuoco & Krzysztof Rostek, Members 60-43 Maspeth Avenue, Maspeth, NY Indicated Consideration: $425,000 All Cash Grantee subsequently obtained a $1,430,000 mortgage from Maspeth Federal Savings Bank. Price Per Buildable S/F: $115.99 Verified: Comments: By deed. Grantee filed plans to build a 4-story, 7-unit apartment building. Construction is underway. Jacques 0. Tuchler & Associates 42Vacant Land Sale #3 14 Conselyea Street Brooklyn, New York Jacques 0. Tuchler & Associates 13Location: Zone: Plot Size: Plot Area: Buildable S/F: De Grantor: Grantee: Vacant Land Sale #3: 14 Conselyea Street, East Williamsburg S/S 125’ E/O Union Avenue Block 2756 Lot 8, Brooklyn, N.Y. C2-3 “Commercial” Overlay in R6 “Residential” (2.43x) 25° x75) 1,875 S/F 4,556 S/F (as per zoning) Dated: 6/2/08 Recorded: 8/1/08 Transfer Tax: $2,408.00 M& J Plaza Realty Corp. clo Maryann Tenaglia, President 595 Metropolitan Avenue, Brooklyn, NY Guarantee Construction LLC. clo Yusef Aberjel, Manager 1059 Fulton Street, Brooklyn, NY Indicated Consideration: $602,000 14 Mortgage: $1,267,400 Benjamin Funding Price Per Buildable S/F: $132.13 Verified: Comments: By deed & Grantee Grantee filed plans to build a 4-story, 4-unit apartment building. Jacques 0. Tuchler & Associates 14Vacant Land Sale #4 942 62” Street aka 6202 Ft. Hamilton Parkway Brooklyn, New York Jacques 0. Tuchler & Associates 15Location: Plot Area: Zone: Site: Grantor: Grantee: Vacant Land Sale #4 942 62™ Street aka 6202 Ft. Hamilton Parkway Block 5729 Lot 24, Brooklyn, N.Y. 11,185 SIF. Buildable 2x or 22,370 S/F C1-3 “Commercial” in R5B “Residential” District One-story, 4,245 sif, brick/concrete block, circa 1961, Class "G9", garage building. Dated: 5/28/09 Recorded: 6/15/09 CRFN 200900181078 Frances Coles Defined Benefit Retirement Plan Frances Cole, Trustee 410 East 57” 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: $134.11 ‘Comments: Purchased by Grantee for the construction of a public school. Existing building to be demolished. Jacques 0. Tuchler & Associates 16Certification |, Doris Sitber, certify that, to the best of my knowledge and belief: | have personally inspected the subject site, ‘The statements of fact contained in this report are true and cerrect ‘The reported analyses, opinions and conclusions are limited only by the reported ‘assumptions and limiting conditions, and are my personal, unblased 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, | 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 of this 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 cient, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event |Lam 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. NYS Certified K.E. General Appraiser Jacques 0. Tuchler & Associates Jacques 0. Tuchler & Associates 17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 abatemerts, tax credits, IDA, ICIP, 421, J51, among others. cial raisal & Appraisal Service Projects: * City-owned sites involved in part of South Street Seaport Urban Renewal Area. * The Loews Kings, Pavilion, and Fortway movie theatres, among others. «Investment evaluation of altemate use of a dormitory facility 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 govermental 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 Barnwell 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 School Construction Authority Public Administrator, Kings County & New York County Housing Preservation & Development Corporation U.S. Attomey's Office - Easter 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 Gulf 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. ch College of Business Admi ion 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 Intemational 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 II Uniform Standards of Professional Appraisal Practice Update / 400-2005 Trends & Projections Affecting Real Estale Values Brooklyn Chamber of Commerce Brownfield Re-Development Conference AVRICS Joint Valuation Conference 3/2008 Business Practices & Ethics Course 1142N (#420) / 2006 ‘Supporting Capitalization Rates AURICS Intemational 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 RE. 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.