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UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF
MISSOURI WESTERN DIVISION
)
)
In re: )
)
TAC INVESTMENTS, LLC ) Case No. 14-40253-11
)
)
Debtor. )



CREDITOR OPTIMA LLC’S MOTION FOR AN ORDER LIFTING AUTOMATIC
STAY TO PERMIT FORECLOSURE OF DEED OF TRUST ON REAL ESTATE OR, IN
THE ALTERNATIVE, DISMISSING BANKRUPTCY PROCEEDING

INTRODUCTION

Creditor, Optima LLC, (“Optima”) hereby moves the court for its Order lifting the
automatic stay in this case to permit Optima to proceed with the foreclosure of a Deed of Trust
on certain real estate owned by the Debtor in Cass County, Missouri. Alternatively, Optima
requests the Court’s Order Dismissing this Chapter 11 proceeding.

The only asset of any significance listed in the schedules originally filed by the Debtor is
this real estate located in Cass County Missouri. Optima holds a Deed of Trust on that real
estate. The Deed of Trust was given to Optima as security for a $125,000.000 loan made by
Optima to the Debtor pursuant to a Promissory Note dated October 17, 2012. True copies of the
Promissory Note and Deed of Trust are attached as Exhibits 1 and 2 to this Motion. Under the
terms of the Promissory Note the $125,000.00 principle balance of the loan and any unpaid
interest was to be repaid in full on or before October 15, 2013. The Note provides that the
annual interest payments are to be 12% of the principle balance of the loan, paid on a monthly
basis. Those interest payments were current up to the October 15, 2013 deadline for full
payment of the $125,000.00 principle of the loan.

The Debtor failed to repay the principle balance due on October 15, 2013 as required by
the terms of the Promissory Note. From and after October 15, 2013 the only payments received
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by Optima from the Debtor have been a $1250.00 interest payment received in November of
2013 and a single check dated March 11, 2014 for $520.83. That March 11, 2014 check was
mailed by counsel for the Debtor to counsel for Optima on April 7, 2014 and characterized as
“the monthly adequate protection payment.”

As a result of the Debtor’s failure to remit a timely payment of the balance due on the
Promissory Note by October 15, 2013, Optima proceeded to institute a Non-Judicial foreclosure
of its Deed of Trust. After compliance with all notice and publication requirements established
by Missouri law for Non-Judicial foreclosures, the sale of the Debtor’s Cass County real estate
was scheduled to occur at 2:00 pm on January 28, 2014. The institution of this Bankruptcy
proceeding on the morning of January 28, 2014 prevented the foreclosure sale from going
forward.

This Chapter 11 proceeding presents a classic example of the reason Congress enacted
special rules for disposition of “single asset real estate” bankruptcy cases. Under the
circumstances Optima is convinced that the petition filed in this case serves no purpose other
than as a tactic designed to “… stave off creditors when the debtors have no hope of
reorganizing”. Ad Hoc Group of Timber Noteholders v Pac Lumber Co. , 508 F.3d 214, 223 (
5
th
Cir 2007).

OPTIMA’S GROUNDS FOR AN ORDER LIFTING THE AUTOMATIC STAY
As its grounds for an Order lifting the automatic stay Optima relies on the following
points. Any one of these points provides sufficient grounds for lifting the automatic stay.
Cumulatively these points present an overwhelming case for lifting the stay in this proceeding.

Failure to Comply with Section 362 (d) (3)

This Chapter 11 proceeding is a “Single Asset Real Estate Bankruptcy” (hereinafter
“SARE”). All three parts of the test for determining a proceeding to be a SARE bankruptcy are
met in this case. (See, 11 U.S.C. Section 101(51b)) First, the Debtor’s real estate, located in
Cass County Missouri is a single property consisting of three contiguous lots – two vacant lots
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and one lot with a building leased to the operator of a commercial business. All of the Debtor’s
property is described in the Deed of Trust, Exhibit 2 to this Motion. Second, all or substantially
all of the Debtor’s gross income is derived from rent on the building owned by the Debtor.
Third, the Debtor has no business operations of any significance other than the lease of its Cass
County real estate. All these facts are verified by the Schedules filed by the Debtor in this case.
Moreover the Debtor’s representative conceded these facts at the first meeting of creditors
occurring on March 26, 2014.

Debtor’s Bankruptcy Petition was filed on January 28, 2014, the same day the real estate
was scheduled to be sold on the Cass County Circuit Courthouse steps pursuant to Optima’s
Non-Judicial Foreclosure on the Deed of Trust. More than ninety days has passed since the filing
of Debtor’s Bankruptcy Petition. To date, Debtor has not filed a reorganization plan, nor sought
an extension of the ninety day deadline for filing a reorganization plan provided in 11 U.S.C.
Section 362(d)(3) for SARE Bankruptcies.

Nor has the Debtor tendered any monthly payments to Optima equal to the interest owed
on the balance due under the Promissory Note, calculated by using the 12% “non-default”
interest rate provided in that Note. Disregarding foreclosure costs, attorney’s fees and
compounding interest amounts – all of which are by the terms of the Note to be included in the
balance now owed by the Debtor to Optima -- the balance owed under the terms of the Note is no
less than $132,500.00. That figure is determined by the following calculation: six months of
simple interest from 12/1/13 through 5/1/14 equals $1250.00 X 6 = $7500.00 + $125,000.00 =
$132,500.00). Using the non-default contract rate set forth in the Note of 12%, monthly
adequate protection payments can be no less than $1325.00. The sole post-bankruptcy payment
of $520.83 tendered by the Debtor on April 7, 2014 can in no way be characterized as a good
faith attempt to comply with section 362 (d) (3).

Absent compliance with section 362 (d) (3) the Debtor is not entitled to the protection
provided by the automatic stay. Accordingly the automatic stay should be lifted to allow Optima
to proceed with the foreclosure sale.

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The Debtor has no Significant Equity in the Real Estate and the Property is not Neccessary
to an Effective Reorganization
Section 362 (d) of the Code requires the Court to lift the automatic stay in a SARE
bankruptcy if the following two matters are established: 1) the debtor does not have equity in the
real estate and 2) the real estate is not necessary for an effective reorganization. Both of these
factors are present in this case. Attached as Exhibit 3 to this Motion is a copy of an Appraisal of
the Debtor’s real estate commissioned by counsel for Optima. That Appraisal was prepared by
the State Certified, Licensed Appraisers Robin Marx and Matthew Woods, both associated with
the Appraisal firm Bliss Associates LLC. As reflected in the Appraisal, as of May 6, 2014 the
fair market value of the Debtor’s real estate is $125,000.00. This amount is, of course, well
below the current balance owed under the terms of the Note.

Under the law Optima need not demonstrate the Debtor’s complete lack of equity in the
real estate. A secured creditor such as Optima is also entitled to take into account prospective
foreclosure costs in determining the amount of its lien against the real estate. In this case
however the amount of Optima’s lien already exceeds the fair market value of the real estate.
This is true even before attorney’s fees and foreclosure fees incurred to date and projected to be
incurred in the future are added to the total. Accordingly, the first prong of the two part test of
Section 362 (d) (2) is established.

Under Section 362 (g) once Optima establishes the lack of the Debtor’s equity in the real
estate, the burden shifts to the Debtor to prove the real estate is necessary to an effective
reorganization. Since the January 28, 2014 filing of this Chapter 11 proceeding, the Debtor has
not provided any reorganization plan, or even a hint of how its financial affairs could be
reorganized in anything close to an effective manner. As noted by the United States Supreme
Court in United Savings Ass’n v Timbers of Inwood Forrest Assocs Ltd, 484 U.S. 365 (1988) a
failure of the Debtor to come forward with a reorganization plan in the first several months of a
Chapter 11 proceeding is a strong indicator that no such plan could be constructed.

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In this case there are simply no prospects for a successful reorganization of the Debtor’s
business, with or without the real estate subject to Optima’s deed of trust. This is not a situation
in which a debtor is midway through the construction of some residential or commercial
development with the prospect of substantial revenues to be generated upon completion of such a
project. The Debtors schedules show the sole source of its revenue to be a monthly rental
payment of $2,000.00. There is no work underway or planned for improvements to the other two
lots. Read in their entirety the Debtor’s schedules -- and in particular Debtor’s Statement of
Financial Affairs – reveals that the Debtors only revenue is a monthly rental payment of
$2,000.00 from a lease of the one improved lot owned by the Debtor. That rental payment is
insufficient to fund any viable reorganization plan and there are apparently no viable option for
generating additional revenues.

As explained above, the monthly interest currently owed to Optima on the unpaid balance
of Promissory Note principle, plus accrued interest called for by the terms of the Promissory
Note is now more than $1,325.00. That sum will increase again when May turns to June. Again,
it should be remembered that the Note also entitles Optima to recover all attorney’s fees and
other costs of foreclosure or other efforts to collect amounts due under the terms of the Note.
Adding monthly interest on the current balance of the Note, calculated by using the non-default
contract rate to the costs Optima has incurred to date for the aborted foreclosure sale as well as
the Appraisal attached to this Motion will increase the monthly adequate protection payments
due to Optima by another hundred dollars or so. Once the costs of real estate taxes, insurance
and the maintenance of the rental property are added to the monthly payments to which Optima
is now entitled, it becomes clear that the debtor simply has no revenue on which a successful
reorganization plan can be constructed. There will certainly be no funds remaining from the
Debtor’s revenue stream from which any meaningful payments can be made against the current
principle balance due under the Note. Finally the Debtors schedules reveal that the lease of the
Debtor’s real estate is due to expire in July of 2014. Thus, there is a significant risk that after
July of 2014 the Debtor will have No Revenue to fund a reorganization plan.

This bankruptcy proceeding appears to be a nothing more than a desperate attempt to
delay foreclosure by filing a Chapter 11 petition hours before a scheduled foreclosure sale.
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There simply are no realistic, potential revenue streams available to this Debtor which could be
utilized to create a viable reorganization plan. Optima should not be forced to continue waiting
to exercise the rights it received in consideration of the funds it loaned the Debtor on October 17,
2012.
OPTIMA’S GROUNDS FOR DISMISSAL


Alternatively, the Debtor’s Failure to Account for the Proceeds of the Optima Loan in a
timely manner, as Ordered by the Trustee, Justifies Dismissal of the Case


On March 26, 2014 the principle owner of the Debtor appeared at the first meeting of
Creditors. In the course of his questioning the Trustee inquired about the Debtor’s use of the
$125,000.00 loaned to the Debtor by Optima in October of 2012. These questions were prompted
by the fact that there were no references to the proceeds of the Optima loan in any of the
schedules filed by the Debtor. In response to the Trustee’s questions Mr. Covey testified that the
proceeds of the Optima loan had been transferred to a different company controlled by Mr.
Covey’s mother. Mr. Covey failed to explain the terms under which those funds were
transferred, the consideration received by the Debtor in return for the transfer of funds or
whether the transfer created an account receivable that should have been listed as an asset on the
Debtors schedules. In addition, Mr. Covey and his counsel noted that the schedules filed by the
Debtor had mistakenly listed Mr. Covey as a co-debtor based on the mistaken impression that he
had guaranteed the Optima loan. In response to these circumstances the Trustee ordered the
Debtor to file amended schedules to delete references to Mr. Covey as a co-debtor reflecting and
the transfer of the Optima loan funds and the consideration received by the Debtor in return for
that transfer.

On May 5, 2014 the Debtor’s attorney filed an amended schedule deleting Mr. Covey as
a co-debtor, but failed to include the Debtor’s verification of that amended schedule. As a result
of that omission the amended schedule was stricken from the record. On May, 19, 2014 the
Debtor filed the same amended schedule but included the required verification. However, the
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Debtor failed to comply with the Trustee’s directions in regard to amending the schedules to
account for the undisclosed terms under which the debtor transferred the proceeds of the Optima
loan until May 28, 2014. The amended schedule filed that day listed a $125,000.00 receivable
form “Energy Vox Corp” apparently the company now owned by the mother of the principle
owner of the Debtor, Troy Covey.

The Debtor’s handling of the proceeds of the Optima loan is emblematic of its approach
to business in general and this bankruptcy proceeding in particular. All indications are that the
Debtor simply wrote a $125,000.00 check to a company owned by the mother of the principle
owner of the Debtor. Apparently, no loan agreement or other document calling for the
repayment of those funds was ever prepared. Apparently no interest is being charged by the
Debtor in connection with this transaction. Indeed, there is no indication that the Debtor ever
contemplated the repayment of the $125,000.00 transferred to Energy Vox prior to being
questioned about the transaction at the first meeting of creditors. It is difficult to accept that the
debtor simply forgot about a $125,000.00 asset when its schedules were initially filed. All of
this is indicative of the fact that this entire proceeding is an abuse of the bankruptcy process to
frustrate Optima and prevent the exercise of rights the Debtor expressly agreed to give Optima in
a fair arms-length transaction.





CONCLUSION

When Congress enacted the amendments to the Bankruptcy Code creating the rules
governing SARE bankruptcies, those amendments were intended to address the unfair hardship
on secured creditors occurring in this proceeding. The Debtor has effectively stymied Optima in
the exercise of rights expressly granted by the terms of the Note and Deed of Trust. A total of
$520.83 has been tendered to Optima since the filing of this bankruptcy and all the while the
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Debtor has continued to receive thousands of dollars in rental revenue from the tenant occupying
the real estate in Cass County.
The appraisal attached as Exhibit 3 to this motion makes it clear that the only impact of
this bankruptcy proceeding has been to permit the debtor to collect rent from January 28, 2014
until the automatic stay is lifted or the case dismissed. The Debtor has no equity in its sole asset.
With each passing day the amount by which the outstanding balance owed by the Debtor to
Optima will exceed the amount realistically obtainable from a foreclosure sale grows. It is time
to allow Optima to proceed with the foreclosure sale.


Respectfully submitted,
ORRICK & ERSKINE, LLP
By: /s/ Paul Schepers

Paul Schepers, MO #32550
Orrick & Erskine, LLP
11900 College Blvd.
Overland Park, KS 66210
(913) 888-1777
(913) 888-1794 Fax
[email protected]
Attorney for Optima, LLC


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CERTIFICATE OF SERVICE

The undersigned hereby certifies that on the 29th day of May, 2014, the foregoing was
electronically filed with the Clerk of Court using the CM/ECF system which will send
notification of such filing to all counsel who are deemed to have consented to electronic service.



/s/ Paul Schepers
Paul Schepers
















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MARKET VALUE ESTIMATE

April 29, 2014

The New Jaudon Roadhouse
20300-04 Holmes Road (State Route D)
Belton, Missouri 64012

An Appraisal Report

prepared for
Orrick & Erskine, LLP

Job No. 5025366
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Bliss Associates, LLC 1000 Walnut St
Real Estate Valuation Suite 920
and Professional Services Kansas City, MO 64106
816-221-9100 816-221-9101 fax
www.BlissAppraisal.com











May 16, 2014

Paul Schepers
Orrick & Erskine, LLP
901 N. 8
th
, Ste. 203
Kansas City, Kansas 66101

Dear Mr. Schepers:

The appraisal report you requested is enclosed. Its purpose is to estimate market value,
subject to limiting conditions, of the

Bar/Restaurant
The New Jaudon Roadhouse
20300 - 04 South Holmes Road (State Route D)
Belton, Missouri 64012.

Real property interest valued is the fee simple estate. The restaurant equipment was not
valued. Final value indication as of May 6, 2014 is

$125,000.

This appraisal is subject to special limiting conditions found on the following page. This
appraisal is also subject to standard assumptions and general limiting conditions found in
appraisal criteria.

Thank you for choosing Bliss Associates, LLC.

Sincerely,
Bliss Associates, LLC
By:
Matthew R. Woods Robert E. Marx, MAI,SRA
State Certified Appraiser State Certified Appraiser




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The New Jaudon Roadhouse
i
PREFACE


SPECIAL LIMITING CONDITIONS


Special limiting conditions consist of extraordinary assumptions and hypothetical conditions.
The Uniform Standards of Professional Appraisal Practice (USPAP) defines extraordinary
assumption as an assumption, directly related to a specific assignment, which, if found to be
false, could alter the appraiser’s opinions or conclusions. A hypothetical condition is
defined as that which is contrary to what exists, but is supposed for the purpose of analysis.

The following extraordinary assumptions and/or hypothetical conditions apply to this
appraisal. The client is advised that their use might have affected the assignment results


Extraordinary Assumptions

1. The subject contains several items of FF&E in the form of kitchen and bar equipment
and furnishings. These items are not valued in this report.
2. The land area appraised includes alley and street vacations that are not in the title
commitment. The title company reported that the county has not recorded anything
about the vacations.

Hypothetical Conditions

1. The subject has a total land area of approximately 111,513 SF. We attributed
50,000 SF to the improvements and the remaining 61,513 SF is considered excess
land.


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The New Jaudon Roadhouse
ii
CERTIFICATION


I certify that, to the best of my knowledge and belief:

 statements of fact contained in this report are true and correct;
 reported analyses, opinions, and conclusions are limited only by the reported
assumptions and limiting conditions, and are my personal, impartial, and unbiased
professional analyses, opinions, and conclusions;
 I have no present or prospective interest in the property that is the subject of this
report, and I have no personal interest or bias with respect to the parties involved;
 I have no bias with respect to the property that is the subject of this report or to the
parties involved with this assignment;
 I have performed no services, as an appraiser or in any other capacity, regarding the
property that is the subject of this report within the three- year period immediately
preceding acceptance of this assignment.
 my engagement in this assignment was not contingent upon developing or reporting
predetermined results;
 my compensation for completing this assignment is not contingent upon the
development or reporting of a predetermined value or direction in value that favors
the cause of the client, the amount of the value opinion, the attainment of a
stipulated result, or the occurrence of a subsequent event directly related to the
intended use of this appraisal;
 my analyses, opinions, and conclusions were developed, and this report has been
prepared, in conformity with the Uniform Standards of Professional Appraisal
Practice (USPAP) of The Appraisal Foundation and the Supplemental Standards of
Professional Appraisal Practice and Code of Professional Ethics of The Appraisal
Institute;
 I have made an inspection of the property that is the subject of this report;
 no one provided significant real property appraisal assistance to the person(s)
signing this report; and
 the use of this report is subject to the requirements of the Appraisal Institute relating
to review by its duly authorized representatives.


By:
Matthew R. Woods
Certified General Appraiser
Missouri 2005090012

Effective date May 6, 2014
Date of the appraisal report: May 16, 2014

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The New Jaudon Roadhouse
iii
CERTIFICATION


I certify that, to the best of my knowledge and belief:

 statements of fact contained in this report are true and correct;
 reported analyses, opinions, and conclusions are limited only by the reported
assumptions and limiting conditions, and are my personal, impartial, and unbiased
professional analyses, opinions, and conclusions;
 I have no present or prospective interest in the property that is the subject of this
report, and I have no personal interest or bias with respect to the parties involved;
 I have no bias with respect to the property that is the subject of this report or to the
parties involved with this assignment;
 I have performed no services, as an appraiser or in any other capacity, regarding the
property that is the subject of this report within the three- year period immediately
preceding acceptance of this assignment.
 my engagement in this assignment was not contingent upon developing or reporting
predetermined results;
 my compensation for completing this assignment is not contingent upon the
development or reporting of a predetermined value or direction in value that favors
the cause of the client, the amount of the value opinion, the attainment of a
stipulated result, or the occurrence of a subsequent event directly related to the
intended use of this appraisal;
 my analyses, opinions, and conclusions were developed, and this report has been
prepared, in conformity with the Uniform Standards of Professional Appraisal
Practice (USPAP) of The Appraisal Foundation and the Supplemental Standards of
Professional Appraisal Practice and Code of Professional Ethics of The Appraisal
Institute;
 I have made a personal inspection of the exterior of the property that is the subject
of this report;
 no one provided significant real property appraisal assistance to the person(s)
signing this report;
 the use of this report is subject to the requirements of the Appraisal Institute relating
to review by its duly authorized representatives; and
 as of the date of this report, I have completed the requirements of the continuing
education program of the Appraisal Institute.

By:
Robert E. Marx, MAI, SRA
Certified General Appraiser
Missouri # RA001238

Effective date May 6, 2014
Date of the appraisal report: May 16, 2014

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The New Jaudon Roadhouse
iv
TABLE OF CONTENTS

PREFACE ............................................................................................................................... i 
SPECIAL LIMITING CONDITIONS ................................................................................... i 
CERTIFICATION ............................................................................................................. ii 
TABLE OF CONTENTS .................................................................................................. iv 
INTRODUCTION ................................................................................................................ 1 
EXECUTIVE SUMMARY .................................................................................................. 1 
CONCLUSION ............................................................................................................... 2 
SCOPE ............................................................................................................................ 3 
CRITERIA ........................................................................................................................ 3 
MARKET AREA ANALYSIS ................................................................................................... 6 
AREA DEMOGRAPHICS ................................................................................................. 8 
SUBJECT ............................................................................................................................ 11 
IDENTIFICATION ......................................................................................................... 11 
HISTORY ...................................................................................................................... 12 
SITE DESCRIPTION ....................................................................................................... 13 
IMPROVEMENTS DESCRIPTION .................................................................................. 16 
BUILDING SKETCH ...................................................................................................... 16 
IMPROVEMENTS ANALYSIS ......................................................................................... 17 
SUBJECT PHOTOGRAPHS ........................................................................................... 18 
REAL ESTATE TAXES ..................................................................................................... 21 
USE .................................................................................................................................... 22 
MARKET OVERVIEW .................................................................................................... 22 
REASONABLE EXPOSURE AND MARKETING TIME ..................................................... 23 
HIGHEST AND BEST USE ............................................................................................. 25 
INCOME APPROACH ........................................................................................................ 26 
RENT ............................................................................................................................ 26 
COMPARABLE LEASE PHOTOGRAPHS ....................................................................... 28 
VACANCY AND COLLECTION LOSS ........................................................................... 29 
EXPENSES ..................................................................................................................... 29 
STABILIZED STATEMENT ............................................................................................. 30 
DIRECT CAPITALIZATION ........................................................................................... 31 
SUMMARY AND CONCLUSION ................................................................................. 31 
SALES COMPARISON APPROACH ................................................................................... 32 
COMPARABLE SALES ................................................................................................... 32 
EXPLANATION OF ADJUSTMENTS .............................................................................. 33 
ADJUSTMENT GRID ..................................................................................................... 35 
SUMMARY AND CONCLUSION ................................................................................. 35 
EXCESS LAND VALUATION .............................................................................................. 36 
IDENTIFICATION ......................................................................................................... 36 
MARKET OVERVIEW .................................................................................................... 36 
COMPARABLE LAND SALES ........................................................................................ 38 
EXPLANATION OF ADJUSTMENTS .............................................................................. 39 
ADJUSTMENT GRID ..................................................................................................... 40 
SUMMARY AND CONCLUSION ................................................................................. 40 


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The New Jaudon Roadhouse
v
DOCUMENTS
Comparable Land Sale write-ups
Comparable Improved Sale write-ups
Appraiser Resumes


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The New Jaudon Roadhouse
1
INTRODUCTION


EXECUTIVE SUMMARY


Property Type Bar/Restaurant

Property / Location: 20300 - 04 South Holmes Road (State
Route D)
Belton, Missouri 64012

MSA: Kansas City

Effective Date: May 6, 2014

Property Rights: Fee Simple

Owner of Record: TAC Investments, LLC

Improved Land Area: 50,000 SF

Excess Land Area: 61,513 SF

Building Area:
Gross Building Area 2,407 SF
Net Rentable Area 2,407 SF

Zoning: None

Year Built: 1935

Highest and Best Use: Continued use of the existing
improvements


MARKET VALUE INDICATIONS:

Cost Approach: Not Applicable
Income Approach: $90,000
Sales Comparison Approach:
Improved Tract $110,000
Excess Land $ 15,000
Total $125,000

Final Value Indication: $125,000

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The New Jaudon Roadhouse
2
CONCLUSION


Reconciliation
The subject is a 2,407 SF Bar/Restaurant. It consists of a one-story wood frame building that
was originally constructed in 1935. There is a 400 SF loft office accessible from the rear of
the property. The subject is currently 100% leased and utilized as a bar/restaurant.

Given the age of the improvements, the cost approach is not considered applicable. It is not
developed in this report.

The subject is currently 100% leased to one tenant. The lease is set to expire in June 2014.
We estimated market rent by comparison to current leases from the surrounding area.
Vacancy allowance was then estimated and operating expenses were subtracted using
expenses taken from similar properties. The net operating income is then capitalized at a
market derived overall rate to estimate the value of the subject property by direct
capitalization.

In the sales comparison approach, sales of small multi-purpose and restaurant buildings
located in various locations throughout Kansas City, Missouri were directly compared to the
subject based on physical differences. The basis for the comparison was the price per
square foot of unit area. After adjustments, the comparable sales provide a reliable
indication of value.

Both approaches are considered to offer a credible indication of value, given the quantity
and quality of the data. The most likely buyer is an owner occupant and the sales
comparison approach is considered the most reliable.

In addition to the improved parcel we considered 61,513 SF to be excess land. Only the
sales comparison approach is utilized in the development of a market value estimate.

Improved Tract $110,000
Excess Land $ 15,000
$125,000


FINAL VALUE ESTIMATE: $125,000

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SCOPE


Scope of work is defined by the Uniform Standards of Professional Appraisal Practice
(USPAP) as “the type and extent of research and analysis in an assignment”. The scope of
this assignment complies with USPAP and the specific reporting requirements of the client.

The specific scope of work for this appraisal assignment and report is outlined below. The
resulting analysis is considered adequate to provide a credible result given the purpose,
intended use and intended users of the assignment.


Property Inspection and Identification
The subject property was personally inspected by Matthew R. Woods on May 6, 2014.
Robert E. Marx inspected the exterior on May 16, 2014. The inspection included a walk-
through of the building exterior and interior. Both the exterior and interior were
photographed. An inspection of the surrounding neighborhood was also made from public
thoroughfares. The property was further identified through county records.


Type and Extent of Data Researched
Public records were relied upon for the site dimensions, site area, zoning, flood
determination, ownership, legal description, and tax assessment data. The size of the
building is based on on-site measurements. Improved and unimproved sales from the
market were researched using the Bliss Associates proprietary database, the Heartland MLS,
Costar and Loopnet databases, and other published sources.


Type and Extent of Analysis Applied
In this analysis, the income and sales comparison approaches to value are developed.
Given the age of the subject, the cost approach is not considered applicable. Appropriate
methodology and techniques deemed pertinent and necessary to the analysis were utilized.
The highest and best use of the property was determined to be continued use of the existing
improvements.


Type of Appraisal Report
This is an appraisal report which is intended to comply with the reporting requirements set
forth under USPAP Standards Rule 2-2(a).


CRITERIA


Purpose
The purpose of the appraisal is to estimate the market value.


Intended Use of the Appraisal
The intended use of this report is for removing a stay of a bankruptcy for the mortgagee,
Optima LLC.


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Client and Intended User
Orrick & Erskine, LLP is the client. It and Optima, LLC are the intended users. The
appraisers and Bliss Associates, LLC are not responsible for unauthorized use of this report
by third parties.


Effective Date
May 6, 2014


Type of Value Estimated
The type of value estimated in this appraisal is market value.


Market Value
“Market value means the most probable price which a property should bring in a
competitive and open market under all conditions requisite to a fair sale, the buyer and
seller each acting prudently and knowledgeably, and assuming the price is not affected by
undue stimulus. Implicit in this definition are the consummation of a sale as of a specified
date and the passing of title from seller to buyer under conditions whereby:

(1) Buyer and seller are typically motivated;
(2) Both parties are well informed or well advised, and acting in what they consider
their own best interests;
(3) A reasonable time is allowed for exposure in the open market;
(4) Payment is made in terms of cash in United States dollars or in terms of financial
arrangements comparable thereto; and
(5) The price represents the normal consideration for the property sold unaffected by
special or creative financing or sales concessions granted by anyone associated with
the sale.”
1



Property Rights
Real property interest valued is fee simple estate.


Assumptions and General Limiting Conditions

This report assumes the following:
1. That title to the property interest appraised is good and marketable, unless otherwise
noted; the report assumes no responsibility for the legal description or for legal
matters or those relating to title considerations.
2. That the property is free and clear of any and all liens or encumbrances unless stated
otherwise.
3. That the property has responsible ownership and competent property management.
4. The information furnished by others is reliable; however, no warranty is given for the
accuracy of such information.
5. That all engineering is correct; the intention of the report is that plot plans and
illustrative materials are to assist the reader in visualizing the property.
6. That there are no hidden or unapparent conditions of the property, subsoil, or

1
Source: Code of Federal Regulations; Title 12--Banks And Banking; Chapter I--Comptroller Of The Currency,
Department Of The Treasury; Part 34--Real Estate Lending And Appraisals--Subpart C—Appraisals Sec. 34.42
Definitions; Revised as of January 1, 2000
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structures that render it more or less valuable. No responsibility is assumed for such
conditions or for procuring engineering services that may be necessary to discover
them.
7. That the property complies fully with all applicable federal, state, and local
environmental regulations and laws, unless noncompliance is specified in the report.
8. That the property complies with all zoning and use regulations and restrictions, unless
the report acknowledges nonconformity.
9. That the owners and/or property managers either have or could procure or renew any
licenses, certificates of occupancy, consents, or other legislative or administrative
authority from any local, state, or national government, or private entity or
organization, upon which the value conclusion reported depends.
10. That the utilization of the land and improvements is within the boundaries or property
lines and that there are no encroachments or trespasses by or upon the property,
unless noted in the report.

Additional conditions bearing upon this report are as follows:
1. The distribution, if any, of the total valuation in this report between land and
improvements applies only under the stated program of utilization; any separate
allocations must not be used in any other appraisal and are invalid if so used.
2. Possession of this report, or any copy hereof, does not imply the right of publication.
3. By reason of this appraisal, the appraiser is relieved of any obligation to give further
consultation or testimony, or to attend court with reference to the property in
question, unless prior arrangements have been made.
4. Neither all nor any part of this report--especially any conclusions regarding value, the
identity of the appraiser or the firm with which the appraiser is associated--may be
disseminated to the public through advertising, public relations, news, sales-
promotion, or other media without the prior written consent and approval of the
appraiser.
5. The value estimates in the report apply to the entire property interest as described in
the report; any proration or division of the total into fractional interests would
invalidate the value conclusions, unless such proration or division of interests has
been set forth in the report.
6. Unless stated otherwise in this report, the appraiser has not been advised or become
aware of the existence of any hazardous substances and/or toxic wastes that may or
may not be present on the property; the appraiser has no knowledge of the existence
of such materials on or in the property; the value estimated in the report is contingent
upon the assumption that there is no hazardous condition on or in the property, or in
such proximity to the property that it would cause a loss in value.

7. No compliance survey or analysis of the subject property relating to the requirements
of the Americans with Disabilities Act of 1991 (ADA) exists. Such a survey could
reveal that the property does not comply with one or more requirements of the Act,
thus having a negative effect upon value. Unless stated otherwise in the report, there
is no direct evidence relating to this issue. This report does not, therefore, consider
possible noncompliance in estimating the value of the property.


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MARKET AREA ANALYSIS


LOCATION


The subject property is located at the southwest corner of 203
rd
Street and Holmes Road
(State Route D) in Unincorporated Cass County, Missouri. The following map shows the
subject’s location within the Kansas City Metropolitan Area.


Neighborhood Map—Metropolitan Perspective

As the map illustrates, the neighborhood is in the southern portion of the Kansas City
Metropolitan Area. Access to the neighborhood is primarily provided by Missouri Highway
150 and Missouri Highway 58. The subject’s general neighborhood is considered to be
bound by Missouri Highway 150/ 203rd Street to the north, Holmes Road to the east, 175
th

Street and 177
th
Street to the south, and Kenneth Road to the west. The map on the
following page shows the neighborhood in greater detail from a local perspective.


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Neighborhood Map—Local Perspective


Surrounding Land Uses & Development
The subject property’s four tracts are located along the east, south, and west of the Village of
Loch Lloyd, as illustrated by the aerial photograph on the following page. The subject’s
immediate neighborhood is comprised primarily of single-family and agricultural uses, as
well as some special use properties. Residential uses include both moderate-density single-
family residences and single-family residences on agricultural acreage. The most substantial
residential development is located within the Village of Loch Lloyd development, which is
comprised of a number of upscale single-family residences. A number of older, more
moderately priced single-family residences are located in the Holmes Valley subdivision.
The remainder of the neighborhood is largely comprised of agricultural uses, including
residences on acreage. The only major land use in the area is the golf course within the
Village of Loch Lloyd.

New development in the area is essentially limited to development within the Village of
Loch Lloyd, as well as the previously discussed religious facility. Substantial development
has not reached the subject’s vicinity from any of the surrounding communities. Vacancy in
the area was noted to be minimal in the neighborhood. The condition of properties in the
neighborhood varies greatly. Properties in the Village of Loch Lloyd are generally in good
condition, while other residences in the area range from poor to average-to-good in terms of
condition.

The aerial photograph on the following page illustrates the general composition of the
subject’s neighborhood.

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Aerial Photograph


AREA DEMOGRAPHICS


The following map shows a 1-mile, 3-mile and 5-mile radius from the location of 20300 S
State Route D in unincorporated Cass County, Missouri:


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The following charts show population demographics, particularly household and median
income demographics within a 1-mile, 3-mile and 5-mile radius from the location of 20300
S State Route D:

20300 S State Route D (1-Mile Radius) Census Trends
2010
% Change
10-13 2013
% Change
13-18 2018
Population 152 1.3% 154 2.6% 158
Number of Households 54 1.9% 55 3.6% 57
Median Household Income $60,413 8.6% $65,593
*Data from STDBOnline


The population within a 1-mile radius of the area has increased 1.3% since the previous
census was taken in 2010 to reach 154 people. A further increase of 2.6% is expected
within the next five years. There are currently estimated to be 55 households within the
area, with a median household income of $60,413. This is expected to increase to $65,593
per household by 2018 for 57 households.

20300 S State Route D (3-Mile Radius) Census Trends
2010
% Change
10-13 2013
% Change
13-18 2018
Population 2,414 1.2% 2,442 3.0% 2,515
Number of Households 863 1.9% 879 3.4% 909
Median Household Income $64,172 16.1% $74,492
*Data from STDBOnline


The current population in the area within 3-miles of the subject property is estimated to be
2,442 people. Current estimates expect an increase of 3.0% over the next five years to reach
2,515 people by 2018. There are 879 households within 3-miles of the area, bearing a
median household income of $64,172. This is expected to increase to $74,492 per
household by 2018 for 909 households.

20300 S State Route D (5-Mile Radius) Census Trends
2010
% Change
10-13 2013
% Change
13-18 2018
Population 18,504 0.9% 18,674 2.2% 19,081
Number of Households 6,960 1.5% 7,067 2.6% 7,250
Median Household Income $58,209 14.7% $66,737
*Data from STDBOnline


The population within a 5-mile radius of the subject property has increased 0.9% since the
previous census was taken in 2010 to reach 18,674 people. A further increase of 2.2% is
expected over the next five years. There are currently estimated to be 7,067 households
within the subject area, with a median household income of $58,209. This is expected to
increase to $66,737 per household by 2018 for 7,250 households.

The following table shows the relative retail sales of the area compared to the relative retail
expenditures of the area’s population:
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1-Mile 3-Mile 5-Mile
Demand (Retail Potential) $1,851,272.00 $29,270,099.00 $219,495,952.00
Supply (Retail Sales)
$278,613.00 $6,795,604.00 $74,050,895.00
Retail Gap $1,572,658.56 $22,474,494.84 $145,445,057.38
*Data from STDBOnline
Area Market Profi l e 2013


The chart shows the total retail expenditures of the subject population and compares them to
the actual retail sales within the subject area. If the retail sales are greater than the retail
potential, it shows that neighboring communities are shopping within the subject area at a
greater rate. If the retail sales are less than the retail potential, it shows that the subject area’s
population is doing a portion of its shopping in neighboring communities. We call this
comparison the retail gap.

The table below shows the top ten retail consumer expenditures for households within each
radius from the subject property:

1-Mile 3-Mile 5-Mile
Food And Beverages $8,922.47 $9,397.25 $8,815.31
Food At Home $5,487.21 $5,742.26 $5,393.86
Food Away From Home $3,435.26 $3,654.99 $3,421.45
Entertainment $3,822.83 $4,027.28 $3,674.23
TV, Video and Audio $1,417.69 $1,487.61 $1,403.33
Apparel $1,624.99 $1,731.59 $1,620.25
Household Furnishings and Appliances $1,200.11 $1,265.28 $1,162.29
Furniture $540.89 $572.64 $530.93
Child Care $457.33 $502.42 $469.50
Lawn and Garden $523.19 $542.59 $476.04
Computer $270.36 $287.88 $266.41
Household Supplies $808.79 $841.77 $780.50
Transportation $8,774.89 $9,201.79 $8,611.70
Vehicle Purchases $4,117.76 $4,307.22 $4,008.84
Gasoline and Motor Oil $3,415.41 $3,588.04 $3,400.11
Maintenance and Repairs $1,241.72 $1,306.53 $1,202.75
*Data from STDBOnline
Top Retai l Consumer Expendi tures 2013


The table takes the area’s retail sales and breaks them down by the type of product being
sold for selected categories. Top retail sectors for the subject areas include food and
beverages, transportation, entertainment, and apparel.


Conclusion
The neighborhood is located in a largely rural area in the southern portion of the Kansas City
metropolitan area with average access via highways and main thoroughfares. Growth in the
area has largely been limited to properties within the Village of Loch Lloyd, although some
additional development of special use properties has occurred. Growth within the village
has been steady. Given the area’s demographics and historical trends, it is likely the
neighborhood will remain in a stable phase for the foreseeable future, with additional
growth possible as the economic and real estate markets improve.

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SUBJECT


IDENTIFICATION


Brief Property Description
The subject property consists of a single-story wood frame bar building that was originally
constructed in 1935. It is on a concrete slab. In addition there are two adjoining land tracts
that are unimproved. There a total of three tracts with three separate parcel identification
numbers. The individual parcels are summarized the table below. For purposes of this
report 50,000 SF of land will be considered with the improvements while the remaining
61,513 SF is considered excess land.



Bird’s Eye View
Taken to the West


Bar/Restaurant Unimproved Land Unimproved Land
Property Location 20300 S Holmes Road No Address Assigned 20304 Holmes Road
Parcel Identification 2514300 2514700 2514800
Number of Buildings 1 NA 1
Owner of Record TAC Investments LLC TAC Investments LLC TAC Investments LLC
Land Area (SF) 24,829 32,234 54,450
Land Area (Ac) 0.57 0.74 1.25
No. of Stories 1 NA NA
Design Freestanding NA NA
Year Built 1935 NA NA
Gross Building Area (SF) 2,407 NA NA
Zoning NA NA C-2
Corner Yes No No
Frontage 203rd/Holmes None Holmes
Condition-Exterior Avg NA NA
Condition-Interior Avg NA NA
Unincorporated, Cass
County, MO
Unincorporated, Cass
County, MO
Unincorporated, Cass
County, MO
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Address
20300 - 04 South Holmes Road (State Route D)
Belton, Cass County, Missouri 64012


Legal Descriptions

Parcel No.2514300
Lots 1-4, Block 1, Village of Jaudon, Cass County, Missouri.

Parcel No.2514700
Lots 23-28, Block 4, Village of Jaudon, Cass County, Missouri.

Parcel No.2514800
Lots 15-22, Block 3, Village of Jaudon, Cass County, Missouri.


Ownership
TAC Investments, LLC


HISTORY


The ownership purchased the subject in October 2012 from Jerome A. Gable. According to
the title commitment the loan amount was $125K. The actual sale amount is unknown. The
sellers had owned the subject for approximately 8 years prior to the most recent sale.

To the best of our knowledge, no other transactions regarding the subject are known to have
occurred within the past five years.

The subject is currently leased to the New Jaudon Roadhouse for $2,000 per month or
$9.97/SF.




Unit Rental Annual Renewal Options/
Unit Tenant Size (sf) Rate ($/sf) Base Rent Begin End Concessions/
Comments
20300 New Jaudon Roadhouse 2,407 9.97 $ 24,000 Jul-12 Jun-14 tenant pays ins
2,407
Lease Term
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SITE DESCRIPTION


Location/Access/Frontage
The site is located at the southwest corner of 203rd Street and Holmes Road. The site has
vehicular access via gravel drives from both frontage roads. The site has approximately 350
feet of frontage along the east side of Holmes Road and 165 feet along the north side of
203rd Street. An aerial map of the subject site is shown below.




Shape and Size
The site is “L” shaped and contains 111,513 SF, or 2.56 acres according to the Cass County
records. The plat map is located below.



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Topography and Flood Hazard
The site is generally level and at street grade with the frontage roads. According to Flood
Insurance Map 29037C0015F, dated January 2, 2013, the site is situated outside of federally
identified flood hazard areas. The zone is defined as “Zone C”. An excerpt from the flood
map is shown below.


Easements/Encroachments
All easements appear to be of a local-service nature enhancing the utility and marketability
of the property. No encroachments by or upon the property are evident, and no hazards or
nuisances appear to affect the property.


Traffic Count
The subject is located along Holmes Road (State Route D). The nearest traffic counts along
Holmes Road are around 5,500 vehicles per day 4 miles to the north at Highway 58. Nine
miles to the south the counts decrease to around 1,000 vehicles per day.


Zoning
The site is not zoned according to Cass County. The subject has reportedly operated as a
restaurant/bar since it was constructed and is presumed to be a legal use of the site.


Utilities
All utilities except sewer are available and installed to the subject site. The subject uses
propane gas. The subject is on a septic system.


Hazardous Materials/Toxic Wastes
There were no hazardous materials observed during an inspection of the property. It is
assumed that no toxic wastes were present within the soils. However, Bliss Associates, LLC
is not qualified to detect the presence or absence of such materials. If further evidence is
needed regarding the lack of danger from hazardous materials or toxic waste, authorities
with expertise in detecting these conditions should be consulted (see Standard Assumptions
and Limiting Conditions, Appraisal Section).
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Conclusion
The site has adequate physical characteristics for a variety of potential development. No
significant adverse influences were noted. The site has a second tier commercial location.

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IMPROVEMENTS DESCRIPTION


The subject property consists of a one-story wood frame building with a pitched metal roof.
The total GBA is 2,407 SF. It has a partial basement (864 SF) with a stone foundation and a
loft office space with approximately 400 SF. Windows are double hung and fixed windows
in metal and wood frames. The main entrance is a single-glass door in metal frame along
the east elevation. There are metal doors along the west and south elevations.

The interior consists of a kitchen, prep area, bar, dining area and two lavatories. The finish
consists of tile wood and concrete flooring, exposed duct work, wood side walls, suspended
fluorescent light fixtures and wood partitioning.

The building is 100% heated and cooled with forced air gas heating and central air
conditioning. The HVAC is ground mounted. Plumbing and electricity are adequate for
restaurant use.


Site Improvements
There are three pole lights, pole signage, canopy and an 800 SF patio.



BUILDING SKETCH





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IMPROVEMENTS ANALYSIS



Deferred Maintenance (Curable)
As of the date of inspection, the improvements are noted to be in generally average to fair
condition. Reportedly the roof has a few leaks that the tenant has not been able locate. The
tile flooring in the dining area is worn. The wood flooring is warped in places. We estimate
deferred maintenance of $10,000.


Condition/Physical Depreciation
The original improvements were constructed in 1935. It has been rehabbed and updated
over the years. Most recently (2012) the tenant reportedly replaced 3 air conditioning units
and installed ductwork throughout the dining and bar area. The total cost was
approximately $15K to $20K. The effective age is somewhat lower than the weighted age,
estimated at 25 to 30 years. The total economic life of the improvements is estimated at 55
years.


Functional Obsolescence
The building’s design as a single-tenant office or retail facility is easily convertible to service
a variety of potential users. The improvements represent a mature commercial building that
fits with the rural feel, but is not typical of contemporary restaurant or retail appeal. Though
functional, the improvements likely have limited appeal. All things considered, the design is
functional and typical of smaller multi-purpose properties in today’s market and the subject
does not appear to suffer from functional obsolescence.


External Obsolescence
External obsolescence is attributed to factors from outside the subject property and is
generally reflected in market rent levels that are inadequate to support new construction. In
this case, rent levels do not support new construction and the subject is considered to suffer
from external obsolescence. The second tier location makes it difficult to compete for
tenants in all of the newer buildings that are in more populous areas.


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SUBJECT PHOTOGRAPHS





Front (East) Elevation Looking North along Holmes Road




Looking West along 203rd Street North Elevation




West Elevation South Elevation



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Bar/Dining AREA Gaming/Dance Area




Prep Area Kitchen




Walk-In Cooler Basement



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loft office Area Lavatory




Furnaces Buckets for Leaks




Unimproved Land Unimproved Land

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REAL ESTATE TAXES


Real estate taxes in Missouri are calculated by applying the appropriate mill levy to the
assessed value, which is based on the County Appraiser’s appraised value. The assessment
ratio for commercial properties is 32%. The assessment ratio for vacant land tracts is 19%.
The following table summarizes the subject’s total tax and assessment history over the past
two years.




Real estate taxes are forecast at approximately $2,300 or $0.96 per square foot.


HISTORICAL COUNTY APPRAISED VALUES,
ASSESSED VALUES, AND REAL ESTATE TAXES
Owner: TAC Investments, LLC
Mailing Address: 8844 Hillcrest Road, Kansas City, MO
Situs Address: 20300 S State Route D, Belton, MO
2012
Parcel # Appraised Value Assessed Value Real Estate Taxes
2514300 (improved) $80,125 $25,640 $1,861.73
2514700 (vacant) $16,650 $3,160 $212.39
2514800 (vacant) $21,380 $4,060 $272.88
Total $118,155 $32,860 $2,347.00
2013
Parcel # Appraised Value Assessed Value Real Estate Taxes
2514300 (improved) $75,870 $24,280 $1,774.47 *
2514700 (vacant) $16,650 $3,160 $213.89 *
2514800 (vacant) $21,380 $4,060 $274.80 *
Total $113,900 $31,500 $2,263.16
*unpaid
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USE


MARKET OVERVIEW


Retail Market – Cass County
Until recently, the retail market in the Kansas City Metropolitan area struggled because of
the general poor economic conditions. There was downward pressure on rental rates,
upward pressure on vacancy and more perceived risk in the retail sector in general. More
specifically newly developed retail in the path of development, but which was not yet
surrounded by supporting population suffered the most in the current cycle. Well located
centers with established populations surrounding have been able to maintain the status quo,
with landlords more willing to negotiate lease rate to maintain occupancy.

The subject development represents a second tier property located along a state route in a
mainly rural and agricultural setting.

The following chart shows the metropolitan vacancy rate and the various individual
submarkets throughout the MSA for all retail properties for the Year-end 2013.



The total KCMSA had a vacancy rate of 8.40% for all retail properties with a positive
absorption of over 1,000,000 SF. Approximately 563,000 SF of retail was constructed in
2013. The chart above shows the larger submarkets in the KC metro area. The Cass County
Market is not listed in the MSA chart above. CoStar’s retail statistics for Cass County are
summarized in the following table.

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The chart above indicates a current vacancy rate of 7.8% and a five year average vacancy
rate of approximately 8%. The survey included 524 existing buildings. Approximately
35,000 SF of new retail construction has taken place in the Cass County market in the past
five year with none in 2013.


Marketability
The subject property has a rural location with limited demand. Access and visibility is good
via State Route D. The building is older than most retail or restaurant properties in the
market area. Therefore, market appeal is rated below average. Market fundamentals are
weak and more conservative underwriting standards exist compared to a few years ago.


REASONABLE EXPOSURE AND MARKETING TIME


The reasonable exposure time inherent in the market value concept is always presumed to
precede the effective date of the appraisal {USPAP, SR-1-2(c), SMT-6}. By contrast,
reasonable marketing time is an opinion of the amount of time it might take to sell a
property interest at the concluded market value level during the period of time immediately
after the effective date of an appraisal {USPAP, Advisory Opinion, AO-7}.

The subject is an average quality building with adequate access from Holmes Road. It has a
functional layout for a bar or restaurant use and could easily be converted to an office use.
Its relatively small size suggests single-tenant occupancy. Vacancy in this submarket is
relatively low (7.8% for general retail). Considering the subject’s physical and locational
characteristics, a reasonable exposure time of approximately 12 to 18 months is considered
reasonable given the value conclusion contained in this report.

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The graph above generated from Costar indicates marketing time for retail and office
buildings ranged from 184 days to over 1,600 days over the past 9 quarters. The survey
consisted of office buildings in Belton, Kansas City, Grandview, Pleasant Hill and
Harrisonville.

Although the overall market appears to be improving somewhat, the market for retail and
office properties (as well as other property types) continues to be uncertain. However, a
relatively small building like subject should be competitive with other properties on the
market. If the subject were placed on the market on the date of this appraisal, the value
estimate contained in this report is intended to reflect a reasonable marketing time of 12 to
18 months. The estimate of marketing time assumes the property is adequately marketed
and mortgage financing is readily available.



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HIGHEST AND BEST USE


Definition
Highest and best use may be defined as, "the reasonably probable and legal use of vacant
land or an improved property, which is physically possible, appropriately supported,
financially feasible, and that results in the highest land value." (Appraisal Institute, 275)

Because the use of land can be limited by the presence of improvements, highest and best
use is determined separately for the site as though vacant and available to be put to its
highest and best use, and for the property as improved.

Highest and best use must meet four criteria. It must be:

 physically possible
 legally permissible
 financially feasible
 maximally productive.

These criteria are usually considered sequentially; a use may be financially feasible, but this
is irrelevant if it is physically impossible or legally prohibited.


Highest and Best Use As Vacant
The subject site’s physical characteristics are sufficient for development although it has size
limitations. The surrounding properties along the main thoroughfares consist of mainly
residential and agricultural uses with limited commercial development. The site is not
zoned. Given the location of the site, as well as the surrounding uses, office, industrial or
retail uses are likely. However, speculative development is not currently supported by
rental rates, therefore holding for future development is the only feasible use. No other use
would result in a higher land value and be physically possible, legally permissible, and
financially feasible. Given these factors, the concluded highest and best use as vacant is
more for light industrial uses similar to those in the immediate area as warranted by demand.


Highest and Best Use As Improved
The site is improved with a restaurant/bar building. Continued use of the building is
presumed to be legally permissible and the improvements are suitable to serve the needs of
a number of users. Demolition and redevelopment is not feasible at this time. Therefore,
the highest and best use as improved is continued use of the existing improvements.

Since the subject is on a septic system the land due south of the building is included in the
“primary parcel”. The balance is considered excess land.


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INCOME APPROACH


RENT


Contract Rent
The subject is currently 100% leased to the New Jaudon Roadhouse for $2,000 per month
or $9.97 per sq. ft. The lease began in July 2012 and expires in June 2014. The landlord
pays the real estate taxes only.


Market Rent
Most properties in small suburban areas are owner occupied and there is limited lease
information and therefore we have expanded the search area. The following rent
comparables are included as indications of market rent. The comparables are located in the
Belton and Harrisonville areas of Cass County.



The locations of the market lease comparables are illustrated in the map below.


Lease Comparables Location Map

Property ID Total NRA (SF)
Street Address Yr Blt / Ren
No. City/State Condition Exp. Basis Tenant SF Leased Lease Start Lease Exp. Rate psf Mod Gross Equiv
1 Smoke Shop 4,004 Smoke Shop 4,004 3/14 NA $9.44 $9.44
105 A & B N Scott 1965 Mod Gross
Belton, MO Avg
2 Donnas Dance Studio 3,400 Donnas 3,400 1/14 NA $6.39 $6.39
540 N Scott Ave 1980 Mod Gross
Belton, MO Avg
3 Commercial Bldg 4,077 NA 4,077 5/14 NA $8.24 $8.24
507 Main St 2002 Mod Gross
Belton, MO Avg
4 Shooting Gallery 8,008 NA 8,008 6/13 NA $5.14 $5.14
1700 W Wall 1985 Mod Gross
Harrisonville, MO Avg
5 Row-type bldg 2,500 NA 2,500 6/14 NA $5.00 $5.00
311-13 Main St 1900 Mod Gross
Belton, MO Avg
AVG $6.84 $6.84
Subject Property 2,407
20300 Holmes Rd 1935 New Jaudon Roadhouse 2,407 06/01/12 06/01/14 $9.97 $9.97
Belton, MO Avg-fair
Tenant Detail or Summary
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All of the comparables are on a modified gross basis. The locations are all considered
second tier and comparable to the subject. The sizes range from 2,500 to 8,008 SF and are
generally comparable. The rentals range from average to good condition.

Based on the comparables, we conclude a market rental rate of $7.00 per SF on a modified
gross basis.


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COMPARABLE LEASE PHOTOGRAPHS





Lease No. 1 Lease No. 2




Lease No. 3 Lease No. 4



Lease No. 5

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Sources of Other Income
No reimbursement income is anticipated. Thus, none is included in this analysis.


VACANCY AND COLLECTION LOSS


According to the 4th quarter 2013 CoStar Retail Report, the total vacancy for the South KC
general retail market was 14.6%. The most recent vacancy rate of Cass County was
approximately 8%. Given our observations of the market and the characteristics of the
subject, the stabilized vacancy allowance is estimated at 12%.


EXPENSES


Operating Expenses
The following operating expenses are deducted to arrive at an estimate of net operating
income (NOI). The following expenses are the landlord’s responsibility under the subject’s
modified gross lease basis; other expenses are paid by the tenant.

Real Estate Taxes
As discussed on page 21, we have estimated taxes to be $2,300 or $0.96 per square foot.

Insurance
Insurance for small commercial buildings typically range from $0.15 to $0.35 per square
foot. We have estimated the insurance to be $700 or $0.29 per square foot.

Maintenance & Repairs
The landlord’s maintenance expense is primarily structural. Given the age and condition of
the building repairs will be on-going. An allowance of $2,000 or $0.83 per square foot is
included for structural maintenance.

Property Management
Management fees are usually charged as a percentage of effective gross income. A range of
3% to 6% is common for commercial properties. Given the subject’s characteristics, a
management fee of 3% is concluded.

Miscellaneous
An allowance of $500 is included for miscellaneous expenses not expressly considered in
another category.

Replacement Reserves
Market participants rarely include replacement reserves in their projections, and the overall
capitalization rate applied in the next section is intended for net income before reserves.
Since the replacement reserve is implicit in the capitalization rate, no deduction is applied
for replacement reserves.



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STABILIZED STATEMENT





The effective gross income is $14,827 and the expenses are $5,945 resulting in an NOI of
$8,882.

Category
INCOME $Amount PSF % EGI
Rental Income $16,849 $7.00 113.6%
Other Income 0 0.00 0.0%
TOTAL INCOME 16,849 7.00 113.6%
Vacancy est to be 12% (2,022) -0.84 -13.6%
EFFECTIVE GROSS INCOME $14,827 $6.16 100.0%

OPERATING EXPENSES
Taxes $2,300 $0.96 15.5%
Insurance 700 0.29 4.7%
Utilities 0 0.00 0.0%
CAM 0 0.00 0.0%
Maintenance & Repairs 2,000 0.83 13.5%
Janitorial 0 0.00 0.0%
Management & Administration 445 0.18 3.0%
Miscellaneous 500 0.21 3.4%
Total Expenses $5,945 $2.47 40.1%
Net Operating Income $8,882 $3.69 59.9%
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DIRECT CAPITALIZATION



As previously indicated, transaction volumes for all types of real estate have been down due
to the Great Recession. The most recent retail capitalization rates that have occurred within
the Kansas City Metropolitan area are summarized in the table below.



The rates range from 8.41% to 12.50% averaging 9.72%. The three most recent sales
indicate rates from 8.9% to 11.6%. Sale No. 5 is located in the subject’s South KC market
area and is the closest in proximity.

The following is a summarized capitalization rate study performed for Johnson County. The
subject property is considered most similar to a Class C/D single-tenant retail property. The
recommended overall rate for this classification is 10-11.00%.




According to the PWC 4th Quarter 2013 market report, strip centers had capitalization rates
ranging from 5 to 10%, averaging 6.98%. These are mainly institutional grade properties.
The spread between institutional and non-institutional grade retail properties ranges from 25
to 500 basis points, averaging 156 basis points.

We concluded to a capitalization rate of 10%.

SUMMARY AND CONCLUSION


The stabilized NOI for the subject property is capitalized below.




VALUE INDICATION: INCOME APPROACH $90,000

Sale No. Address City State Property Name Event Date: Cap Rate: Net Rentable Area:
1 8350 N Church Rd Kansas City MO Applebee's Restaurant 1/8/2010 8.18 5,285
2 1461 E 151st St Olathe KS Indian Trails Shopping Center 12/15/2010 9.79 31,140
3 8300 Wornall Rd Kansas City MO Blue X Discount Smoke 2/10/2010 8.41 4,435
4 1000 W US-24 Hwy Independence MO 24 Hi-Way Shopping Center 8/15/2012 12.5 45,300
5 1507 Main St Grandview MO Storefronts 6/1/2012 9.36 5,270
6 5438 Johnson Dr Mission KS Pride Cleaners 1/5/2012 10 1,435
7 310 SW Main St Lees Summit MO Two Mixed Use Buildings 5/8/2013 11.6 12,906
8 10 SW 3rd St Lees Summit MO Retail Bldg 5/8/2013 8.19 2,024
9 4831 W 135th St Overland Park KS Strip Center 8/15/2013 9.44 8,366
AVG 9.72
Class-Retail A B C D E
2012
Single Tenant 7.75% 9.00% 10.00% 11.00% 12.00%
Unanchored strip center 8.75% 10.00% 11.00% 12.00% 13.00%
Neighborhood/Community center- anchored 7.75% 9.00% 10.00% 11.00% 12.00%
Net Operating Income / Overall Rate = Estimated Value
$8,882 / 10.00% = $88,823
$90,000 rounded
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SALES COMPARISON APPROACH


COMPARABLE SALES

The sales comparison approach involves the comparison of the property being appraised
with other properties that may have been sold, listed for sale, or are under contract. The
underlying premise is that the market value of the property is related to the prices of
comparable, substitute properties. Because of the unique character of each property,
adjustments are made of differences between the subject property and those to which it is
compared. Finally, the resulting adjusted sales prices of the comparables are reconciled into
a value conclusion regarding the subject property.

The subject property is a bar/restaurant. It was originally constructed in 1935. The local
neighborhood was researched for similar properties. Due to a lack of adequately
comparable sales in the immediate area, the market radius was expanded to include other
areas of Kanas City, Missouri. The primary criteria for selection were size, age/condition,
and quality/construction type. More detailed descriptions of the sales with photographs are
located prior to the DOCUMENTS section of the report.


Improved Sale Summary




The unit of comparison is the price per square foot.

Sale
No. Property Name Address Date Price $/SF GBA Built Condition LB Ratio
1 former McDonald's 8411 Holmes Rd 7/10/2013 $220,000 $58.32 3,772 1968 Average 12.79
KCMO
2 Feuerborn Bar 21900 Branic Dr 4/18/2014 $255,000 $72.40 3,522 2007 Avg-G 7.92
Peculiar, MO
3 Kickstand Bar 10817 E. Truman Rd 4/1/2014 $118,000 $39.33 3,000 1940 Avg-F 5.81
Independence, MO
4 former Patrikios 9849 Holmes Rd 7/19/2011 $235,000 $55.95 4,200 1963 Avg-F 5.79
KCMO
5 Doughboys Pizza 1806 N Commercial St 7/15/2011 $118,750 $53.98 2,200 1947 Avg-F 7.73
Harrisonville, MO
6 Mandy's Cafe 5920 Winner Rd 1/7/2011 $230,000 $55.83 4,120 1969 Average 7.40
KCMO
Average: $55.97 3,469
New Jaudon Roadhouse 20300 Holmes Rd Subject: 2,437 1935 Avg-F 20.52
Belton, MO
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EXPLANATION OF ADJUSTMENTS


Buyer Expenditures
There are no adjustments necessary for buyer expenditures.


Property Rights, Financing Terms, and Conditions of Sale
The sales involved the fee simple estate or leased fee estate at market terms, so no property
rights adjustments are applied. In addition, each sale involved cash or its equivalent, so no
financing adjustments are necessary. It is adjusted upward. No other adjustments were
required for conditions of sale.


Market Conditions
Market conditions for retail and office properties peaked in mid-2006, but have largely
remained stagnant since that time. The sales span a time range from January 2011 to April
2014, all well after the real estate crash was fully realized and as such, none of the sales are
adjusted for market conditions.


Size
Typically, smaller properties sell for a premium, in part because of the decreased risk
involved in leasing or selling a smaller sized building due to the greater number potential
users. Furthermore, there are more potential uses for a smaller property and as such, more
potential buyers. Finally, there are fewer investment dollars needed to invest in a smaller
building thus there are potentially more buyers. The sales range from 2,200 SF to 4,200 SF.
Sale Nos. 1, 2, 4 and 6 are adjusted upward. Sale Nos. 3 and 5 are relatively similar in size
and no further adjustments are made.


Location/Access
The subject has average location and access at the southwest corner of 203
rd
and Holmes
Road in a sparsely populated area of Cass County. It is considered a secondary, semi-rural
commercial location. All of the sales have superior locations. Sale Nos. 1 and 4 are located
along the same frontage Road but within populous areas of Kansas City, MO. Sale Nos. 2
and 5 are located in Cass County in more densely developed areas. Sale Nos. 3 and 6 are
located in more populous areas with declining growth. All are adjusted downward.

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Age/Condition
The subject is approximately 80 years old. It is in average to fair condition and has some
items of deferred maintenance. Sale Nos. 1, 2, 4 and 6 are all newer than the subject. Sale
Nos. 3 and 5 are considered similar in age. Sale Nos. 1, 2 and 6 are superior condition.
Sale Nos. 3, 4 and 5 are similar condition. Except for Sale Nos. 3 and 5 all of the sales are
adjusted downward for age/condition.


Quality
The subject is average quality class D wood frame building. The sales are al similar quality
and no adjustments are necessary.


Land to Building Ratio
The subject has a land to building ratio of 20.52 to 1. Larger land to building ratios allow
for additional parking and possible expansion. Sale Nos. 3 and 4 have land to building ratios
of less than 6 to 1 and are adjusted upward. No other adjustments are made.




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ADJUSTMENT GRID





SUMMARY AND CONCLUSION


After adjustments, the sales provide an indicated unit value range of roughly $37 to $52 per
square foot averaging $45 per square foot. Sale Nos. 2 and 3 are the most recent sales. Sale
Nos. 2 and 5 are located in Cass County. Sale No. 5 is the most similar in size. We
concluded at the average of the range at $45 per square foot. The calculation is as follows.






VALUE ESTIMATE: SALES COMPARISON APPROACH $110,000

20300 Holmes Rd 8411 Holmes Rd 21900 Branic Dr 10817 E. Truman Rd 9849 Holmes Rd 1806 N Commercial St 5920 Winner Rd
Unincorporated Kansas City Peculiar Independence Kansas City Harrisonville Kansas City
Cass JACKSON Cass JACKSON JACKSON Cass JACKSON
MO MO MO MO MO MO MO
64012 64131 64078 64052 64131 64701 64125
Sale Number SUBJECT 1 2 3 4 5 6
Sales Date 7/10/2013 4/18/2014 4/1/2014 7/19/2011 7/15/2011 1/7/2011
Sales Price $220,000 $255,000 $118,000 $235,000 $118,750 $230,000
Price Per SF $58.32 $72.40 $39.33 $55.95 $53.98 $55.83
Sale Characteristics
Rights Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple
Adjustment % 0% 0% 0% 0% 0% 0%
Adjusted Price $220,000 $255,000 $118,000 $235,000 $118,750 $230,000
Terms Cash to seller Cash to seller Cash to seller Cash to seller Cash to seller Cash to Seller
Adjustment % 0% 0% 0% 0% 0% 0%
Adjusted Price $220,000 $255,000 $118,000 $235,000 $118,750 $230,000
Conditions Arm's length REO Market REO Arm's length Arm's Length
Adjustment % 0% 0% 0% 10% 0% 0%
Adjusted Price $220,000 $255,000 $118,000 $258,500 $118,750 $230,000
Buyer Expenditures
Adjustment % 0% 0% 0% 0% 0% 0%
Adjusted Price $220,000 $255,000 $118,000 $258,500 $118,750 $230,000
Market Conditions -
Adjustment % 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Adjusted Price $220,000 $255,000 $118,000 $258,500 $118,750 $230,000
Adjusted Price PSF - $58.32 $72.40 $39.33 $61.55 $53.98 $55.83
Property Characteristics
Building Size 2,437 3,772 3,522 3,000 4,200 2,200 4,120
Age 79 46 7 74 51 67 45
LBR 10.19 12.79 7.92 5.81 5.79 7.73 7.40
Features
Building Size 5% 5% 0% 5% 0% 5%
Location -20% -10% -10% -20% -10% -10%
Age -5% -25% 0% -5% 0% -5%
Condition/Quality 0% -10% 0% 0% 0% 0%
Design 0% 0% 0% 0% 0% 0%
L/B Ratio 0% 0% 5% 5% 0% 0%
Total Net Adjustment - -20% -40% -5% -15% -10% -10%
Total Gross Adjustment - 30% 50% 15% 35% 10% 20%
Final Adjusted Price - $46.66 $43.44 $37.37 $52.32 $48.58 $50.24
Unit Indicated
Subject SF Value Value Rounded
2,437 x 45.00 $ = 109,665 $ 110,000 $
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EXCESS LAND VALUATION


The following section pertains to the excess land component of this report. Other than size,
frontage and zoning the site characteristics are essentially the same as the improved site
previously described in this report.


IDENTIFICATION


Brief Description
The subject consists of 61,513 SF or 1.41 acres of vacant land located along the north side of
204
th
Street just west of Holmes Road in Unincorporated, Cass County, Missouri.


MARKET OVERVIEW


Reasonable Exposure/Marketing Time
The reasonable exposure time inherent in the market value concept is always presumed to
precede the effective date of the appraisal {USPAP, SR-1-2(c), SMT-6}. By contrast,
reasonable marketing time is an opinion of the amount of time it might take to sell a
property interest at the concluded market value level during the period of time immediately
after the effective date of an appraisal {USPAP, Advisory Opinion, AO-7}.

The subject property is a residentially zoned site located along the west side of Cherry Street
just north of 203rd Street. The subject consists of one tract containing a total of
approximately 61,513 SF or 1.41 acres. The topography of the site is generally level and at
street grade. The subject was along with the improved tract in 2004.

There are several vacant land listings of residential and commercial land within the Cass
County KC market. The listing prices and days on the market several properties are
summarized below. The average asking price is $81,570 per site, with an average number
of days on the market being 794 days, or approximately 2.5 years of exposure to the market.
The 64 sold lots averaged $46,055 per site or $9,211 per acre, with an average number of
days on the market being 296 days.


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Most land tracts that have sold within the past two years did so at prices highly discounted
from the original asking prices.

At this point, any development for the subject site is considered to be one to two years
away. A reasonable exposure time of 18 to 36 months is estimated to have been necessary
to achieve a sale at a price consistent with the final value conclusion contained in this
appraisal.

Market conditions are beginning to improve somewhat in the market area and a modest
increase in demand is anticipated in the foreseeable future. However, no significant
changes are anticipated, therefore, if the subject were placed on the market today, it is
believed a marketing time of 18 to 36 months would also be necessary to achieve a sale
consistent with the market value estimated in this report.



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COMPARABLE LAND SALES


Below is a summary of land sales utilized in estimating a market value for the property. The
most applicable unit of comparison is considered to be the price per SF. Detailed
descriptions of these sales are located at the end of this section of the report.





Land Sales Map





NO. LOCATION CITY/STATE SALE DATE SALE PRICE SIZE (SF) $/SF ZONING
1 17300 S 291 Hwy Pleasant Hill, MO 8/09 $60,000 130,690 $0.46 C-2
2 21712 N Main St Peculiar, MO 5/13 $58,500 375,487 $0.16 AG
3 30009 E 286th St Garden City, MO 3/13 $15,000 60,984 $0.25 AG
MEAN 189,054 $0.29
MEDIAN 130,690 $0.25
LOW 60,984 $0.16
HIGH 375,487 $0.46
LAND SALES SUMMARY TABLE
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EXPLANATION OF ADJUSTMENTS


Property Rights, Terms, Conditions of Sale
All of the sales are considered to be arm’s length transactions of fee simple title. No
adjustments are necessary.


Market Conditions (Time)
The sales span a time frame from December August 2009 to May 2013. The market for rural
land sales in Cass County has remained fairly static over the past 5 years and no adjustments
are necessary.


Size
Typically, larger sites sell at a lower unit price than smaller sites as there are fewer available
buyers, more investment dollars required and greater risk associated with their development.
Sale No. 2 is adjusted upward. Sale Nos. 1 and 3 are all relatively similar in size to the
subject and no adjustments are necessary.


Location/Access
The subject is in an average location with average access. It is a secondary location with
limited commercial potential. The sales have similar rural locations and no adjustments are
necessary.


Functional Utility/Zoning
The subject property is zoned for commercial and AG. The sales have similar zoning and
no adjustments are made.

In addition, the subject does not have sewer. Sale Nos. 1 and 3 do not have sewers and are
comparable. Sale No. 2 has sewer and is adjusted downward.


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ADJUSTMENT GRID




SUMMARY AND CONCLUSION


After adjustment, the sales provide an indicated unit value range for the subject of $0.21/SF
to $0.46/SF. The average indication is $0.29/SF. An indicated unit value for the subject of
$0.30/SF is considered reasonable and supported by the market. Applied to the subject:

61,513 SF x $0.25 = $15,378, rounded to $15,000.



VALUE INDICATION: SALES COMPARISON APPROACH (Excess land): $15,000


SUBJECT 1 2 3
Sales Date - 8/09 5/13 3/13
Sales Price - $60,000 $58,500 $15,000
Land SF 61,513 130,690 375,487 60,984
Sale Price per SF $0.46 $0.16 $0.25
Transaction Adjustments
Property Rights Fee Simple 0% 0% 0%
Financing Terms Cash to Seller 0% 0% 0%
Conditions of Sale Normal 0% 0% 0%
Market Conditions - 0% 0% 0%
Adjusted Price PSF $0.46 $0.16 $0.25
Physical Charac. Adj's.
Location/Access KCMO/Good 0% 0% 0%
Size in SF 86,684 0% 45% 0%
Functional Utility Avg 0% -10% 0%
Zoning/Use C-2/Ag 0% 0% 0%
Net Adjustment 0% 35% 0%
Adjusted Price per SF $0.46 $0.21 $0.25
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Aerial View
17300 S 291 Hwy
Pleasant Hill, MO 64080
113607 BlissWorld No.
Redford Construction
Land
Commercial
COMPARABLE SALE NO. 1
Transaction
Sale Price: $60,000
Seller: Mike O'Connor
Buyer: Stanley W. and Johnna R.
Redford, Trust
Sale Date: 8/5/2009
Book: 3263
Page: 282
The land was owned by Mr. Mike O’Connor. Mr. Stan Redford (Redford Construction) was hired to
erect the building in 2006 for Mr. O’Connor’s sod business. Mr. Redford paid for the building as a
build-to-suit arrangement. When Mr. O’Connor decided to move his business elsewhere he sold Mr.
Redford the land for $60,000 in 2009.
Analysis
Price / SF Land: $0.46 Price / Acre Land: $20,000
Land
SF: 130,690
Acres: 3.00
Zoning: C-2
Shape: Irregular
Utilities - Water: Yes
Utilities - Gas: Yes
Utilities - Sewer: No
Utilities - Electric Yes
Tax ID: 0142401
Subdivision: Irish Acres Lot: 1
The site is located along the west side of South 291 Highway in rural Cass County, Missouri. The site
is “L” shaped and has 162.79 ft. on the west side of South 291 Highway and a depth ranging from
550 ft. to 300 ft. The property is “L” shaped and contains 130,680 SF (3.00 acres). The property is
zoned C-2, Commercial District, by Cass County, Missouri.
Comparable Sale -

1
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Looking West
21712 N Main St
Peculiar, MO 64078
119375 BlissWorld No.
Noble Refrigeration
Land
Industrial
COMPARABLE SALE NO. 2
Transaction
Sale Price: $58,500
Conditions of Sale: Arm's Length
Interest Conveyed: Fee Simple
Seller: LEAD Bank (FKA Garden
City Bank)
Buyer: Noble Refrigeration
Terms: Cash to Seller
Sale Date: 5/1/2013
Book: 3687
Page: 428
The sale is an REO that was listed for $100,000 for several years. The property was marketed ofr
atotal of 157 days prior to the sale.
Analysis
Price / SF Land: $0.16 Price / Acre Land: $6,786
Land
SF: 375,487
Acres: 8.62
Shape: Irregular
Frontage: 415.00
Topography: Level
Utilities - Water: Yes
Utilities - Sewer: Yes
Utilities - Electric Yes
Tax ID: 070209000000084000
Legal: Lots 3 and 4, Flynn's Subdivision, in Cass County, MO.
Subdivision: Flynn's Sub Lot: 3 & 4
It is an irregular shaped tract of commercially zoned land located along the west frontage (Main
Street) road of I-49. It is about one quarter mile north of the interchange of I-49 and MO "C"
highway.
The property is between two platted industrial subdivisions. The north subdivision has 10 lots with
no improvements while the south subdivision has 5 of 11 lots improved to date.
Comparable Sale -

2
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Document Page 74 of 83
30009 E 286th St
Garden City, MO 64747
122138 BlissWorld No.
Smith Land
Land
Agricultural-Undeveloped
COMPARABLE SALE NO. 3
Transaction
Sale Price: $15,000
Analysis Price: $15,000
Conditions of Sale: Arm's length
Interest Conveyed: Fee Simple
Buyer: George Smith & Marcella
Wright etal
Terms: Cash to seller
Sale Date: 3/7/2013
Book: 3699
Page: 824
Property had 3 green houses that were removed prior to the sale.
Analysis
Price / SF Land: $0.25 Price / Acre Land: $10,714
Land
SF: 60,984
Acres: 1.40
Zoning: AG
Shape: Irreg
Topography: Level
Tax ID: 372502
Section: 20 Range: 30 Township: 44
Subdivision: White Rock Park (lots 9-12) Lot: 10
Located along southboubnd SR 7 north of Garden City.
Comparable Sale -

3
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Document Page 75 of 83
8411 Holmes Rd
Kansas City, MO 64131
121318 BlissWorld No.
former McDonald's
Land
Commercial
COMPARABLE SALE NO. 1
Transaction
Sale Price: $220,000
Analysis Price: $220,000
Conditions of Sale: Arm's length
Interest Conveyed: Fee Simple
Seller: James Montee
Buyer: KC Holmes DG LLC
Terms: Cash to seller
Sale Date: 7/10/2013
Deed No.: 2013E0075225
Analysis
Price / SF Land: $4.56
Land
SF: 48,256
Acres: 1.11
Zoning: B1-1
Shape: L
Topography: Gently Sloping
Proposed Dev.: Dollar General
Tax ID: 48-210-06-18
Legal: w/2 lot 10 and 11 ex w 11'
Subdivision: Ernest Kellenstrass Lot: 10-11
Located one property north of the NEC of 85th and Holmes Road. Site was develpoed with a
McDonald's restaurant in 1968. Converted to office use in the 2000's. Improvements were razed
after this purchase for construction of a Dollar General.
The subject was marketed as an improved site. The developer paid a sale price consitent with
commercial buildings in the area. The price per GBA of the razed improvements equates to
$58.32/SF.
Comparable Sale -

1
Case 14-40253-can11 Doc 44 Filed 05/29/14 Entered 05/29/14 16:44:02 Desc Main
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21900 Branic Dr
Peculiar, MO 64078
122117 BlissWorld No.
former Restaurant
Retail
Tavern, Bar, Nightclub, Micro-Brewery
COMPARABLE SALE NO. 2
Transaction
Sale Price: $255,000
Analysis Price: $255,000
Conditions of Sale: REO
Interest Conveyed: Fee Simple
Seller: Hawthorn Bank
Buyer: John Feuerborn
Terms: Cash to seller
Sale Date: 4/18/2014
Purchaser owns at least two bars in Cass County.
Analysis
Price / SF Building: $72.40
Building
Building SF: 3,522 Year Built: 2007
Exterior Walls: Hard Board Quality: Average
Condition: Average to Good Const. Class: Class D
Land
SF: 27,878
Zoning: C-1
Topography: Level
Vacant restaurant building located at the SWC of State Hwy J and Branic Drive just east of the I-49
interchange.
Comparable Sale -

2
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Document Page 77 of 83
10817 E Truman Rd
Independence, MO 64052
122119 BlissWorld No.
former Kickstand Bar
Retail
Tavern, Bar, Nightclub, Micro-Brewery
COMPARABLE SALE NO. 3
Transaction
Sale Price: $118,000
Analysis Price: $118,000
Conditions of Sale: Arm's length
Interest Conveyed: Fee Simple
Seller: Frances & Gary Tanahill
Buyer: James & Jenelda Woolery
Terms: Cash to seller
Sale Date: 4/14/2014
Deed No.: 2014E0024903
Analysis
Price / SF Building: $39.33
Building
Building SF: 3,000 Year Built: 1940
Exterior Walls: Hard Board Quality: Average
Condition: Average Const. Class: Class D
Land
SF: 17,424
Acres: 0.40
Shape: Rect
Topography: Level
Tax ID: 27-140-07-01
Subdivision: Maywood Lot: 1 & N 25' Block: 4
Comparable Sale -

3
Case 14-40253-can11 Doc 44 Filed 05/29/14 Entered 05/29/14 16:44:02 Desc Main
Document Page 78 of 83
9849 Holmes Rd
Kansas City, MO 64131
120225 BlissWorld No.
Former Patrikios Restaurant
Retail
Restaurant
Sit Down
COMPARABLE SALE NO. 4
Transaction
Sale Price: $235,000
Analysis Price: $235,000
Conditions of Sale: REO
Interest Conveyed: Fee Simple
Seller: Patriots Bank
Buyer: S&Z Corp
Terms: Cash to seller
Sale Date: 7/19/2011
Deed No.: 2011E0067876
Analysis
Price / SF Building: $55.95 Price / SF Land: $9.66
Building
Building SF: 4,200 Year Built: 1963
Exterior Walls: Stucco Quality: Average
Condition: Fair to Average Land / Bldg. Ratio: 5.79
Const. Class: Class C
Land
SF: 24,316
Acres: 0.56
Zoning: B3-2
Shape: Irregular
Topography: Level
Tax ID: 48-540-01-59
Subdivision: Holmes Wood Lot: B
Located at the NEC of 99th and Holmes Road. Former Patrikios restaurant building. Marketed as a
restaurant building with fully equipped kitchen and dining room. Capacity for 125 people.
Comparable Sale -

4
Case 14-40253-can11 Doc 44 Filed 05/29/14 Entered 05/29/14 16:44:02 Desc Main
Document Page 79 of 83
1806 N Commercial Dr
Harrisonville, MO 64701
122124 BlissWorld No.
Doughboy Pizza
Retail
Tavern, Bar, Nightclub, Micro-Brewery
COMPARABLE SALE NO. 5
Transaction
Sale Price: $118,750
Analysis Price: $118,750
Conditions of Sale: Arm's length
Interest Conveyed: Fee Simple
Seller: Pleasantview Enterprises LLC
Buyer: Adam Portzen
Terms: Cash to seller
Sale Date: 7/15/2011
Deed No.: 480507
rehabbed for use as a pizza restaurant
Analysis
Price / SF Building: $53.98
Building
Building SF: 2,200 Year Built: 1947
Exterior Walls: Hard Board Quality: Average
Condition: Average Const. Class: Class S
Land
SF: 17,000
Zoning: C-2
Topography: Level
Tax ID: 1771800
Property is located along the north side of Commercial St east of M-291. Single story wood frame
building with a flat roof.
Comparable Sale -

5
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Document Page 80 of 83
5920 Winner Rd
Kansas City, MO 64125
56635 BlissWorld No.
Mile High Grocery Supply - Mandy's Caf
Retail
Restaurant
Sit Down
COMPARABLE SALE NO. 6
Transaction
Sale Price: $230,000
Conditions of Sale: Arm's Length
Interest Conveyed: Fee Simple
Seller: TJC Properties, LLC
Buyer: Mile High Grocery Supply,
Inc.
Terms: Cash to Seller
Sale Date: 1/7/2011
Deed No.: 2011E0007552
The property was formerly a Waid's Restaurant (Cafe) and Mandy's Cafe.
Analysis
Price / SF Building: $55.82
Building
Building SF: 4,120 Year Built: 1969
Exterior Walls: Concrete Quality: Average
Condition: Average
Land
SF: 0
Acres: 0.70
Zoning: M2a
Shape: Quadrangle
Frontage: 200.00
Depth: 231.00
Topography: Level
Utilities - Water: Yes
Utilities - Gas: Yes
Utilities - Sewer: Yes
Utilities - Electric Yes
Tax ID: 28-120-06-08
Legal: Lengthy, see file
Section: 1 Range: 33 Township: 49
Subdivision: Charlevoix Addition
The property is a former Waid's Restaurant located on the northwest corner of Winner Road and
White Avenue in a primarily industrial neighborhood area of in Kansas City, Missouri. The
improvements were constructed in 1969 and contain 4,120 square feet of building area. The
improvements are of wood frame construction with a brick and wood exterior, and is considered to
be in overall average condition. The interior design is typical of a sit-down restaurant and includes a
commercial-grade kitchen area.
Comparable Sale -

6
Case 14-40253-can11 Doc 44 Filed 05/29/14 Entered 05/29/14 16:44:02 Desc Main
Document Page 81 of 83
MATTHEW R. WOODS


Certifications

• Missouri State Certified General Real Estate Appraiser No. 2005090012


Experience

 20 years full-time real estate appraisal experience with Bliss Appraisals, Woods
Appraisals, Hughes Development Corporation and Nunnink & Associates, Inc.


Formal Education

 University of Virginia, Economics, Charlottesville, Virginia


Course Work & Seminars

 2002 AI Course I320, Advanced Applications
 2000 AI Course II430, Standards of Professional Practice, Part C
 1995 AI Course II420, Standards of Professional Practice, Part B
 1995 AI Course I410, Standards of Professional Practice, Part A
 1994 AI Course I310, Basic Income Capitalization
 1994 AI Course I120, Appraisal Procedures
 1994 AI Course I110, Appraisal Principles
 Various Continuing Education Courses (14 hours per year))


Case 14-40253-can11 Doc 44 Filed 05/29/14 Entered 05/29/14 16:44:02 Desc Main
Document Page 82 of 83
2014
ROBERT E. MARX, MAI, SRA

Certifications
• Appraisal Institute’s Litigation Professional Development Program
• Member Appraisal Institute (MAI), No. M-9207
• Senior Residential Appraiser (SRA)
• Institute of Residential Marketing
• Colorado State Certified General Real Estate Appraiser No. CG100048101
• Kansas State Certified General Real Property Appraiser No. G-383
• Kansas Licensed Real Estate Broker No. BR00052260
• Missouri State Certified General Real Estate Appraiser No. RA001238
• Missouri Licensed Real Estate Broker-Salesperson (inactive) 1999023167
Experience
• 38 years full-time real estate appraising with Bliss involving all types of properties
• Expert Valuation Witness
District Courts in Kansas Counties:
Geary, Johnson, Leavenworth, Riley, Sedgwick, Shawnee, and Wyandotte
Circuit Courts in Missouri Counties:
Cass, Clay, Jackson and Platte
Federal Bankruptcy Courts:
Western Missouri and Kansas
Various local planning and zoning hearings
• Recent teaching and related experience
March 2013, Co-presenter, CLE Seminar, National Business Institute, Eminent
Domain from Start to Finish
October 2009, Speaker, KC Regional Chapter of the International Association of
Assessing Officers, Valuation and Appraisal in a Dysfunctional Market
October 2009, Co-presenter, CLE Seminar, KC Metropolitan Bar Association,
Handling Distressed Commercial Properties in 2009
2000, Approved instructor for appraiser continuing education in Idaho, Illinois,
Indiana, Kansas, Missouri, Pennsylvania and Virginia
2000, co-author: manuscript Police Power Regulation of Highway Access and
Traffic Flow in the State of Kansas
Associations
• Member: Appraisal Institute Review Panel
• Member: Kansas City Regional Association of Realtors
• Member: Missouri Association of Realtors
• Member: National Association of Home Builders
• Member: Young Advisory Council of the Appraisal Institute
• Past President: KC Data Service, Inc. (1991)
Formal Education
• BA Chemistry
University of Kansas, 1973
Recent/Advanced Course Work
• 2012, Handling Eminent Domain Cases in Missouri and Kansas (CLE Seminar)
• 2012, Wind Energy Transaction (CLE Seminar)
• 2011, Condemnation Appraising: Principles and Application
• 2010, The Appraiser as an Expert Witness: Preparation & Testimony
• 2010, Hotel Appraisal
• 2010, Litigation Appraising: Specialized Topics and Applications
• 2008, Appraisal Review - General
• 2007, Finance, Statistics & Valuation Modeling
• 2006, New Markets Tax Credit Conference
• 2003, Separating Real and Personal Property from Intangible Business Assets
• 2000-2001, Regression Analysis and Special Topics in Statistics – SAS
(UMKC\Courses 590\6 credit hours)
• 2000, Regression Analysis (UMKC\ Course 590\3 credit hours)
Case 14-40253-can11 Doc 44 Filed 05/29/14 Entered 05/29/14 16:44:02 Desc Main
Document Page 83 of 83

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