Tis the season for yellow book appraisals - by John Nitz

As the holiday season ramps up so does the need for Yellow Book appraisals. Over the past few months, Connecticut municipalities and local land trusts have been scurrying in their attempt to meet application deadlines to attain State DEEP, i.e. State of Connecticut Department of Energy and Environmental Protection, grants for open space acquisitions. Funding is provided via the States’ Open Space and Watershed Land Acquisition Grant program (OSWLA).

Commercial appraisers are normally busy at this time of year as financial institutions and investors vie to close deals by year end. In addition, the State DEEP requires an appraiser qualified to complete a Yellow Book appraisal and an independent reviewer, who has had experience appraising and reviewing Yellow Book appraisals. As a result, at least two commercial appraisers are necessary for most grant applications involving a Yellow Book appraisal.

The Yellow Book appraisal is the common name for the Uniform Appraisal Standards for Federal Land Acquisitions document. The Yellow Book appraisal follows many of the same requirements found in a typical narrative appraisal which conforms to the Uniform Standards of Professional Appraisal Practice, USPAP. The Yellow Book appraisal is somewhat unique in that there are certain items that are different from the standard appraisal, including the market value definition, establishing the “larger parcel,” and applying special extraordinary assumptions, hypothetical conditions, and/or jurisdictional exceptions. 

Last May, the Connecticut Chapter of the Appraisal Institute and The Land Trust Alliance joined forces to provide a two-day educational course offering, entitled “Uniform Standards for Federal Land Acquisitions: Practical Application.” The course, taught by Appraisal Institute national instructor Vincent Dowling, MAI, SRA gave licensed appraisers the opportunity to enhance their skills with “Yellow Book” appraisals. The course contained a review of the Uniform Standards for Federal Land Acquisitions, 6^th edition, which includes critical instruction to those involved in federal land acquisition valuation assignments. The course included several case studies, demonstrated practical procedures, and concluded with an examination. The Land Trust Alliance provided a $300 stipend for licensed appraisers located throughout New England states.

The Land Trust Alliance is composed of 950 land trust members. Land trusts are nonprofit organizations focused on conserving land via acquisition and the use of conservation easements. Over 40 years, its member land trusts have protected more than 61 million acres of land. The Land Trust Alliance is devoted to strengthening land conservation efforts. The Land Trust Alliance describes itself in part as “the voice of the land trust community. As the national leader in policy, standards, education and training, we work passionately to support land trusts so they can save and secure more lands now and for future generations.” 

In the past month, my firm completed four Yellow Book appraisals for the Cheshire Land Trust. The Trust plans to acquire 20 acres of land in proximity of the Quinnipiac River to prevent future development and allow for public use for kayaking in the river. Other past assignments included appraising a 10-acre parcel of residentially zoned land in Bristol, CT that had been approved for a 16-unit PUD planned unit development. The parcel was part of the Hoppers site, which includes large undulations or “kettles” originally formed during the Ice Age. In Southington, CT a Yellow Book appraisal was necessary for the acquisition of 160 acres of mountainous terrain just north of Mount Southington Ski Resort. The site included Hushak Rock, a.k.a. White Rock, a massive rock that stands 60 ft. tall. Some Yellow Book appraisals can make for interesting assignments. 

In conclusion, the demand for Yellow Book appraisals is typically greater at this time of year due to year-end application deadlines. Those interested in ordering a Yellow Book appraisal should do so months in advance to allow for sufficient time to complete the appraisal and the review appraisal.

John Nitz, MAI, is owner of John W. Nitz & Associates, LLC. in Southington, CT. Assisted by Arnold Grant, MAI and Jacqueline Beauchaine, executive director, CT Chapter of the Appraisal Institute.