597 Belmont Street, Belmont, MA

Oracle Valuations Services P. O Box 90280 Needham, MA 02492 (617)964-0077

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Oracle Valuation Services P.O. Box 920280 Needham, MA 02492

July 17, 2017 Rev. Dr. Norman F. David 597 Belmont Street Belmont, Massachusetts 02478

RE: Christ Evangelical Lutheran Church 597 Belmont Street, Belmont, MA

In accordance with our engagement, I have inspected, researched, analyzed, and appraised the real property known as Christ Evangelical Lutheran Church, Belmont, Massachusetts. The appraisal is intended to provide an independent fair market value opinion to assist in determining a probable selling price. The body of this report is an integral part of the appraisal and includes an explanation of the valuation approach and the various support data gathered in our investigation. The conclusions are subject to the Statement of Assumptions and Limiting Conditions as set forth in the report. In my professional opinion, the market value of Christ Evangelical Lutheran Church, as of July 17, 2017, was $1,100,000. Oracle Valuation Services

Peter J. Vergados, MBA,

597 Belmont Street, Belmont, MA

Oracle Valuations Services P. O Box 90280 Needham, MA 02492 (617)964-0077

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Table of Contents Factual Background .....................................................................................................................3 The Appraisal Issue ......................................................................................................................3 Scope of the Appraisal Assignment ..............................................................................................3 Effective Date of Appraisal ...........................................................................................................3 Definition of Market Value ...........................................................................................................3 The Appraisal Methodology .........................................................................................................4 Description of Property 597 Belmont Street, Belmont, MA .........................................................5 Legal Description .........................................................................................................................5 Property Rights Appraised ...........................................................................................................5 Neighborhood Description ..........................................................................................................5 Highest and Best Use Analysis ....................................................................................................6 Legally Permissible Use ...............................................................................................................6 Reconciliation and Conclusion ....................................................................................................8 Certification Statement .................................................................................................................8 Statement of Qualifications Peter J. Vergados, MBA, SPA ....................................................... 14

597 Belmont Street, Belmont, MA

Oracle Valuations Services P. O Box 90280 Needham, MA 02492 (617)964-0077

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Factual Background Christ Evangelical Lutheran Church was organized under the General Laws of the Commonwealth of Massachusetts on February 21, 1941. The property located at 597 Belmont Street, Belmont, MA was purchased on April 23, 1941 and is recorded in the Middlesex South Registry of Deeds Book 6488 Page 518. The Appraisal Issue The Parish Council of the Christ Evangelical Lutheran Church intends to sell the property and to protect the interest of the Church seeks an independent professional appraisal of the most probable selling price, i.e., the fair market value of the Church property. Scope of the Appraisal Assignment I analyzed the legally permissible, physically possible, and economically feasible uses of the property. This task provided insight and a reasonable answer to the most economically feasible property uses. My work did not include an investigation relative to structural engineering, environmental issues, lead paint, radon, mold, heating oil storage, or whether there may be or not be hazardous materials in the soil or about the property. I did collect and verify, wherever possible, data including costs, neighborhood property sales, listings, market income and expense information, deeds, and recorded documents, assessments, and tax records in sufficient quantity to form an opinion of value. I researched the deed at the Middlesex South County Registry of Deeds. I analyzed Town of Belmont Zoning and Building Codes. I examined and studied the real property, developed descriptions, researched the legal interest held, researched assessor methodology, investigated the sale of land, churches, and commercial buildings through Bankers and Tradesmen sales data and Multiple Listing Service sales data and prepared this self-contained appraisal report. Effective Date of Appraisal The effective date of the appraisal is July 17, 2017 Definition of Market Value Market value is generally described as, “a type of value stated as an opinion, that presumes the transfer of a property as of a certain date, under specific conditions set forth in the definition of the term and identified by the appraiser as applicable to a given situation.”1 The concept of market value includes the element of a reasonable exposure in the open market. A current economic definition agreed upon by federal agencies that regulate financial institutions in the United States is,

“The most probable selling 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. Implied in the definition is the consummation of a sale as of a specific date and the passing of title to the buyer under conditions whereby: the buyer and seller are typically motivated; both parties are well informed or well advised, and acting on what they consider their own best interest; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash or financial arrangements comparable thereto; and the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions by anyone associated with the sale.”2

1 Uniform Standards of Professional Appraisal Practice, page 3 2 55 CFR 564.2 Definition of Market Value Department of the Treasury.

597 Belmont Street, Belmont, MA

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The concept is a well-defined legal term meaning "the price at which a property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell, and both having reasonable knowledge of relevant facts."3 The concept is a well-defined legal term meaning "the price at which a property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell, and both having reasonable knowledge of relevant facts."4 The Appraisal Methodology

1. I developed a market value opinion applying generally accepted national standards of appraisal practice.5 Generally, there are three approaches to developing an opinion of real property market value;6 (1) A depreciated replacement cost. (2) A capitalization of net cash flow and, (3) a market value inferred by recent sales of comparable properties. I researched the sales of churches and fraternal organizations to develop an opinion as to whether the property was worth more as a church than as land for residential development.

2. Statement of Assumptions and Limiting Conditions 3. An appraisal is an unbiased professional opinion of the value of a property reached through an

analysis of that property and of data evidence from the marketplace. The major assumptions and limiting conditions of this appraisal are as follows:

4. I examined deeds but did not perform title searches. I assume merchantable title and render no

opinion as to title.

5. I assumed there were no hidden or non-apparent environmental conditions within the property, which would make it less valuable. Environmental issues affect land use and availability. I made a general inspection of the property and the neighborhood for obvious and discernible adverse environmental conditions that could negatively affect the site’s value and utility. The appraisal does not include an engineering or environmental survey of the site. I did not see any evidence of environmental contamination during the inspections.

6. This appraisal was prepared for the specific purpose and use described, i.e. a potential sale of

the subject property. Any other incidental use is unauthorized and could be misleading.

7. I do not disclose confidential information or assignment results prepared for our client to anyone other than the client, persons specifically authorized by the client, state enforcement agencies and third parties as may be authorized by law and duly authorized professional peer review committees, who are equally charged not to disclose confidential information. Information received from our named client is confidential where that information is not available from public sources.

8. Reverend Norman David, my client, may distribute copies of this report in its entirety to such

third parties as the client may select.

3 26 CFR § 25.2512.1 IRS valuation of property for gift tax purposes and 26 CFR § 20.2031-6, [IRS valuation of household and personal effects for estate tax purposes. 4 26 CFR § 25.2512.1 IRS valuation of property for gift tax purposes and 26 CFR § 20.2031-6, [IRS valuation of household and personal effects for estate tax purposes. 5 Uniform Standards of Professional Appraisal Practice, promulgated by the Appraisal Foundation, which in turn was authorized by the United States Congress as the Source of Appraisal Standards. 6 See State v. Wilson, 6 Wash. App. 443, 447-448, 493 P.2d 1252, 1256 (1972) where the court discusses the methods generally used by appraisers.

597 Belmont Street, Belmont, MA

Oracle Valuations Services P. O Box 90280 Needham, MA 02492 (617)964-0077

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Description of Property 597 Belmont Street, Belmont, MA The rectangular site contains 11,388 square feet The Church building has brick exterior. The roof is asphalt gable style. The building is heated by oil. The oil tank is located above ground at the rear of the building. Subject was built in 1949. The first level has an area of 3,374 square feet, with an additional 3,374 square foot in the basement. The first level (See photos and floor plan) is the main area of the church. There is an organ, pulpit and seating area with removable seats. To the left of the altar is the main office area. There is one bathroom at the rear of the building near the front door. The basement area also includes a sleeping area, full kitchen, office area, and two bathrooms. There is also a mechanical room wherein is located the oil burner, hot water tank and electrical panels. During the week, first level is used by the Nursery School and the basement area is used by the Toddler Center. Legal Description Christ Evangelical Lutheran Church acquired the property on April 23, 1941 from Arthur T. Nelson with Quitclaim Covenants. Deed can be found in the Middlesex County Registry of Deeds, Book 6488, Page 518. The property is described as:

“A certain parcel of land situated in Belmont, Middlesex County, Massachusetts, and being lot 98 and part of lot 97 as shown on a “Plan of Landin Belmont, Mass.” dated March 14, 1932, drawn by Fred A. Joyce, Surveyor, recorded with Middlesex South Registry of Deeds at the end of Book 5631 and bound and described as follows: Southwesterly by Belmont Street, seventy-five (75) feet; Southeasterly by lot 99 as shown on said plan, one hundred forty and 33/100 (144.33) feet; Northeasterly by lot 87 as shown on said plan, fifty-five and 76/100 (55.76) feet; Northerly by lot 88 as shown on said plan, about twenty-two and 50/100 (22.50) feet; And Northwesterly by the remaining part of lot 97 as shown on said plan, by a line parallel to the westerly line of said lot 99, about one hundred and fifty seven (157) feet.”

Property Rights Appraised The fee simple interest of Christ Evangelical Lutheran Church, in a parcel of land and the building thereon located at 597 Belmont Street, Belmont, Massachusetts. Neighborhood Description Belmont is a town in Middlesex County, Massachusetts, a suburb of Boston. It is part of the Boston metropolitan area. Its population was 24,729 at the 2010 census. Belmont was established on March 10, 1859, by former citizens of, and land from the bordering towns of Watertown, to the south; Waltham, to the west; and Arlington, then known as West Cambridge, to the north. They also wanted a town where no one could buy or sell alcohol. The town was named after Belmont, the 200 acre estate of the largest donor. The easternmost section of the town, including the western portion of Fresh Pond, was annexed by Cambridge in 1880 in a dispute over a slaughterhouse licensed in 1878 on Fresh Pond, so that Cambridge could protect Fresh Pond, a part of its municipal water system. Preceding its incorporation, Belmont was an agrarian based town, with several large farms servicing Boston for produce and livestock. It remained largely the same until the turn of the twentieth century, when trolley service and better roads were introduced, making the town more attractive as a residential area, most notably for the building of large estates. Belmont's population grew by over 90 percent during the 1920s. The reclamation of a large dump and quarry off Concord Avenue into sites for the

597 Belmont Street, Belmont, MA

Oracle Valuations Services P. O Box 90280 Needham, MA 02492 (617)964-0077

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Belmont High School and the Clay Pit Pond stands as a lasting example of environmental planning. With the introduction of automobiles and highways Belmont continued its transition to a commuter-based suburb throughout the twentieth century. Major roads in the town are Concord Avenue, which bisects the town from east to west, Common Street and Pleasant Street (Route 60) which travel north-south through Belmont, and Trapelo Road and Belmont Street which run along the southern edge of the town. Massachusetts Route 2 runs along the northern border of the town. Belmont is served directly by two state routes. Running close to the middle of town is Route 60, locally known as Pleasant Street. On the northern border, Route 2 predominantly outlines Belmont's boundary with the neighboring town of Arlington. Despite the smallness of the town, Belmont has 5 exits on Route 2. Two MBTA Commuter Rail stations, Waverley and Belmont Center, are located in the town. Belmont is roughly 16 minutes away from the rail line's terminus at North Station, Boston. Belmont remains a primarily residential suburb with little growth since the 1950s.There are three major commercial centers in the town: Belmont Center in the center, Cushing Square in the south, and Waverley Square in the west. The Subject Property is located less than ½ mile from Cushing Square. The neighborhood is primarily residential with some commercial influence. The immediate area has older multi-family properties. Highest and Best Use Analysis Highest and Best Use is defined as the reasonably probable use of vacant land or an improved property, which is legally permitted, physically possible, financially feasible, and results in the highest value to the land. The four criteria the highest and best use must meet are legal permissibility, physical possibility, economically feasibility, and maximum profitability. Legally Permissible provides an analysis of the public restrictions in the form of zoning, building codes, historic districts, watershed protection overlays, environmental regulations, parking, height restrictions, land use, access. Legally permissible also involves private restrictions in the form of deed covenants, easements, and restrictions, Physically Possible addresses topography, land area, shape and functional utility, set-back and parking, and the availability of utilities, etc. Financially Feasible addresses whether the proposed legally permitted and physically possible use is economically feasible. Will the return be greater than the current use? Return can be measure by increased net cash flow or in capital gains. The concept relates to the fact that property can have alternative uses, which would result in a greater value than the apparent current use. The analysis leads to the conclusion of a use, which is “maximally profitable,” i.e. the highest rate of return to the land. Legally Permissible Use The property lies in the “SC” Single Residence C -Zoning district. Legally permissible uses within this zoning district include single family residences, hospitals, churches, schools, fire station or other municipal buildings and municipal recreational uses. 7 The “Single Residence C” Zoning District requires a minimum lot size of 9,000 feet and minimum frontage of 75 feet. Other requirements in this zoning district include Minimum Setbacks as follows: minimum lot width of 25 feet, a minimum front yard-25 feet; a minimum rear yard of 25 feet and a minimum side yard of 10 feet. The maximum lot coverage cannot exceed 25% of the lot area. There is a maximum height restriction of 2.5 stories not to exceed 36 feet.8 Section 6- Special Regulations, of the Town of Belmont Zoning By-Law says the purpose of this Section is to promote the preservation of Religious and Municipal Buildings by permitting their adaptive reuse for residential or commercial use (or combination thereof) that may not otherwise be permitted under this Zoning By-Law. (See addendum).

7 Town of Belmont Zoning Ordinance. 8 Town of Belmont Dimensional Requirements

597 Belmont Street, Belmont, MA

Oracle Valuations Services P. O Box 90280 Needham, MA 02492 (617)964-0077

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Physically Possible Uses The 11,388 square foot site would allow for the construction of a 2 unit dwelling. The interior of the church is in relatively good condition. I considered the cost of demolition and the construction of a 2 family dwelling.. The Cost to demolish the existing structure and build a residential dwelling is economically unfeasible. Therefore, after studying the legally permissible and physically possible uses, I concluded the highest and best use is its continued use as a House of Worship. Assessor Analysis Current assessed value is $1,632,000. Land assessment is $422,000. The building is assessed for $1,210,000 Sales of Church Properties I searched for sales of properties utilizing State Use Codes 906 (Church), 960 (Religious property) and 353 (Fraternal Organizations).There have been a significant number of church sales. However, the churches sold have a great variety of distinguishing characteristics including location, amenities, style, and especially land area and building size. I examined sales of churches as well as Fraternal Organizations. Comparable sales varied widely depending on condition, location, sale date and other factors. The following sales were considered to be the most comparable to the subject.

The sales used were considered to be the most comparable to the subject. The Sale Comparison Approach infers a value of $267.25 to $358.11 or $312.68 per square foot of gross building area. Therefore $312.68 per square foot times 3,374 square feet = $1,054,982.30. Rounded to $1,100,000.

SALE 1 SALE 2 SALE 3 SALE 4

Address 95 Rockland Street West Roxbury, MA

8 Revere Street Revere, MA

215 Grove Street Watertown, MA

178 Commonwealth Rd Wayland, MA

Sale Date 02/24/2016 10/30/2016 07/02/2015 05/28/2015

Sale Price $725,000 $1,055,000 $1,500,000 $790,000

Condition Good Good Good Good

Site Area 8,460 sf 17,750 sf 29,000 sf 28,156 sf

Building sf 2,260 sf 2,946 sf 5,038 sf 2,956 sf

Price per SF Building

$320.80 $358.11 $297.94 $267.25

597 Belmont Street, Belmont, MA

Oracle Valuations Services P. O Box 90280 Needham, MA 02492 (617)964-0077

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Reconciliation and Conclusion Valuation by its very nature is rarely susceptible to direct proof. It is established by inference from circumstances surrounding the issue. Factors from which value may be inferred include comparable sales of similar properties and the value of the land based on the land’s legally permissible and physically possible uses. The question was what would be the market value of the Church Property should it be offered for sale. We defined that term market value, as the most probable selling price. The analysis follows a process of determining what legal and physical use is possible. I studied the highest and best use based on the legally permissible, physically possible and most economically feasible. A single or two family residential building is legally permissible, but there are too many variable relating to the cost to convert the existing structure to habitable living units and which portion should be razed. My conclusion for the highest and best use is for continued use as a House of Worship. In my professional opinion, the market value of Christ Evangelical Lutheran Church, as of July 17, 2017, was $1,100,000. Certification Statement

1. I certify that, to the best of our knowledge and belief: 2. The statements of fact contained in this report, upon which the analyses, opinions, and

conclusions expressed herein are based, are true and correct.

3. I have no present or future contemplated interest in the property. I have no personal interest or bias with respect to the subject matter of this report or the parties involved; The appraisal assignment was not based on a requested minimum valuation, a specific valuation, or on a fee contingent on the outcome. .

4. The reported analyses, opinions, and conclusions are limited only by the reported assumptions

and limiting conditions, and is my personal, impartial, and unbiased professional analyses, opinions, and conclusions.

5. The appraisal report has been made in conformity with and the use of this report is subject to

the requirements of the Uniform Standards of Professional Appraisal Practice (USPAP) and the American Society of Appraisers’ Code of Ethics.

6. Peter J. Vergados personally inspected the real estate.

7. No one else provided appraisal assistance in the preparation of this report.

Oracle Valuation Services

Peter J. Vergados, MBA, SPA Research Sources Consulted Real Property Town of Belmont Zoning/Building Department, Town of Belmont Assessor Multiple Listing Service

597 Belmont Street, Belmont, MA

Oracle Valuations Services P. O Box 90280 Needham, MA 02492 (617)964-0077

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Warren Information Group

MAIN LEVEL

597 Belmont Street, Belmont, MA

Oracle Valuations Services P. O Box 90280 Needham, MA 02492 (617)964-0077

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BASEMENT LEVEL

597 Belmont Street, Belmont, MA

Oracle Valuations Services P. O Box 90280 Needham, MA 02492 (617)964-0077

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597 Belmont Street, Belmont, MA

Oracle Valuations Services P. O Box 90280 Needham, MA 02492 (617)964-0077

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597 Belmont Street, Belmont, MA

Oracle Valuations Services P. O Box 90280 Needham, MA 02492 (617)964-0077

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597 Belmont Street, Belmont, MA

Oracle Valuations Services P. O Box 90280 Needham, MA 02492 (617)964-0077

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Town of Belmont Zoning By-Law As amended through 06/06/2016

Approved_07/21/2016_______________________________________________________________

________________

SECTION 6. SPECIAL REGULATIONS

6.12 Religious and Municipal Building Preservation

Note: §6.12 was adopted under Article 31 at the 2013 Annual Town Meeting. 6.12.1 Purpose The purpose of this Section is to promote the preservation of Religious and Municipal Buildings by permitting their adaptive reuse for residential or commercial use (or combination thereof) that may not otherwise be permitted under this Zoning By-Law. 6.12.2 Buildings Eligible Under this By-Law A Religious or Municipal Building located in any zoning district is eligible for a Special Permit under this Section 6.12 if: a) The building, or at least one of the buildings located on the property, was always used for religious or municipal purposes; and b) The Religious or Municipal Building was originally constructed prior to 1950. 6.12.3 Uses Allowed by Special Permit The Planning Board may grant a Special Permit to allow a Religious or Municipal Building, as identified under Section 6.12.2, to be used for other residential or commercial uses (or any combination thereof) than otherwise would be allowed in the underlying zoning district. 6.12.4 Incentives for Preservation In order to permit the adaptive reuse of Religious or Municipal Buildings, the Planning Board may grant a Special Permit to: a) Reduce the on-site parking requirements; b) Modify Inclusionary Housing requirements of Section 6.10; and c) Increase, within the existing buildings, the number of stories and dwelling units allowed by the underlying zoning district. 6.12.5 Special Permit Procedure a) An Application for a Special Permit under this Section shall comply with the procedures and requirements set forth in Section 7.4 of this Zoning By-law. b) Applicants are encouraged to meet informally with the Planning Board and Historic District Commission to discuss the proposal prior to submittal of a formal Application.

597 Belmont Street, Belmont, MA

Oracle Valuations Services P. O Box 90280 Needham, MA 02492 (617)964-0077

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Statement of Qualifications Peter J. Vergados, MBA, SPA Specific Qualifications Relative to This Task Practice involves the valuation of real estate to include, single family, multi-family, condominium, land, mixed use properties and various commercial type properties including, gas stations, retail stores, shopping plazas and small apartment complexes. Also the highest and best use studies of specialized property, e.g. churches, and typical commercial and residential property involving divorce, IRS challenged decedent estate value, gift tax values. He holds a Commonwealth of Massachusetts Real Estate Brokers license #71335. He is also licensed by the Commonwealth of Massachusetts as a Family Care Certified Assistant (6 children)-License #9018793. Formal Education and Specialized Training Boston University, BS in Aeronautical Engineering and Management, Babson College, MBA. Specialized Education included Appraisal Institute II Urban Real Estate Properties, IB Capitalization Theory, and IA Principles of Real Estate Appraisal, and various courses and seminars to maintain license currency. Professional Associations National Association of Professional Appraisers, Senior Professional Appraiser (SPA) designation Expert Witness Experience. Middlesex & Essex County Superior Courts Professional Experience 2007-Durkin Valuation Consultants, Senior Real Property Appraiser. From 1980, P. J. Vergados Associates: Real Estate Appraisal, Property Management and consulting activities including Market Value appraisals, Construction Cost estimates, general consulting on real estate matters. 1979 to 1980 Alpha Development Corporation. Project Management proposed commercial buildings. Management of existing commercial properties. Negotiated lease agreements and leasehold improvements with prospective tenants. GTE Sylvania Real Estate Administrator Undertook and performed assignments in specific areas of real estate activity. Analyzed alternative solutions including costs, negotiated terms and conditions of real estate contracts. Prepared feasibility studies, evaluated real estate taxes, maintained data on real estate markets and trends. 1976 to 1978 IDS Realty Trust, Boston, Ma: Management and leasing of two 60,000+ square foot shopping centers in Raynham and Swansea, Massachusetts, 1970 to 1974 Marlboro Investment Corporation Commercial Division leased and managed office buildings and existing shopping centers. Finance Division Prepared projected financials and market surveys for planned projects. Retired Major, U.S. Air Force 6 years active duty. 16.5 years MA Air National Guard. Rated Pilot, various duties included Flight Safety, Air Operations and Training. Decorations: Distinguished Flying Cross, 11 Air Medals, Vietnam Cross of Gallantry with Palm.