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City Fox. The Carneghi-Bautovich report was prepared by
Christopher Carneghi (Carneghi) and Ronald Blum (Blum), and
delivered to Crocker in September 1994. Carneghi and Blum are
both certified general real estate appraisers in California and
members of the American Institute of Real Estate Appraisers.
Carneghi, who is the president of Carneghi-Bautovich, testified
at trial regarding his report.
Carneghi determined that the highest and best use of the
Redwood City Fox, as improved on the valuation date, was to
retain the property as a theater and market it to a nonprofit
public or private group capable of generating funds in the future
to renovate the building. Carneghi concluded that the property
was in good physical condition and was suited for its current use
as a performing arts theater and retail/office space. Carneghi
also noted that “public outcry” would have made demolition of the
property “very difficult”.
Carneghi valued the theater component separately from the
retail/office component of the property. Carneghi utilized the
replacement cost approach and the comparable sales approach for
valuing the theater. Due to its lack of income potential,
Carneghi did not consider the income approach an appropriate
methodology for valuing the theater. With respect to valuing the
retail/office space, Carneghi utilized the replacement cost,
comparable sales, and income capitalization approaches.
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