Note: Weekly rates should be calculated onthe basis of 25 percent of monthly rates. THE APPRAISAL PURPOSE OF THE APPRAISAL The purpose of this report is to estimate the fair market rental value of family housing quarters subject to occupancy by non-military personnel on military installations in the Panama Canal Zone. Fair Charges for utilities, services, and furnishings are also included. The date of valuation is July 30, 1969. LOCATION All the units subject to appraisal in this report are located in the Panama Canal Zone in Central America. RENTAL VALUE DEFINITION Market rental is defined as that amount which, in a competitive market, a well informed and willing lessor or owner will accept, and which a well informed and willing lessee will payfor exclusive use and occupancy of a property for an agreed future term as of a given date. Rental value can also be expressed as the monetary amount reasonably expectable for the right to the agreed use of real estate. HIGHEST AND BEST USE All of the subject properties are presently being used as housing quarters for personnel in the Canal Zone. Most of the residential areas in the Canal Zone have been established for a long term of years and new housing is being constructed in suitable residential locations. Locational advantages may differ as well as neighborhood characteristics, but the highest and best use for all the subject quarters is for residential purposes. With a very few exceptions, all of the housing areas are separated from industrial uses and are separated from inharmonious land uses. PANAMA CANAL ZONE DATA LOCATION AND SIZE The Panama Canal is located in Central America on the Isthmus of Panama in the Republic of Panama. The Canal Zone is a strip of land extending approximately 50 miles from the Atlantic Ocean to the Pacific Ocean occupying a corridor approximately ten miles wide with the Panama Canal running through the center of the corridor. The Canal Zone covers an area of 558 square miles of land and water exclusive of tidal water. POPULATION The estimated population in 1969 was between 50 and 52 thousand including uniformed personnel of the armed forces. The population is composed of employees of the Panama Canal Company, the Canal Zone Government, the uniformed and civilian personnel of the Army, Navy, Air Force, and their dependents. HISTORY AND GOVERNMENT The Panama Canal has been in operation for more than fifty years and was first opened to commercial traffic August 15, 1914. The organization of the Canal Zone can be divided into three distinct groups as follows: The Military, which is responsible for the protection of the Canal. The Panama Canal Company, which is responsible for the operation of the Canal. The Canal Zone Government, which carries out the civil and governmental functions of the zone. The Military operates much the same as it does within the Continental United States and other areas throughout the world. The Military furnishes their own housing, Military Police, fire protection units, utilities, which are usually purchased from an outside source, schools, shopping facilities, hospitals and recreational facilities. The two units operating the zone (Panama Canal Company and Canal Zone Government) are headed by a single individual who is President of the company and Governor of the Canal Zone. His appointment as Governor is made by the President of the United States and subject to confirmation by the Senate, and he is ex officio President of the company. The Canal Zone Government as an independent government agency is under the direct supervision of the President of the United States who has delegated this authority to the Secretary of the Army. The Secretary of the Army is also the designated stockholder of the Panama Canal Company and appoints the Board of Directors of 13 members in which management of the corporation is vested. The Canal Zone Government functions as an independent government agency and operates on appropriated funds. It performs the normal functions of city, county and state governments. These include police and fire protection, the public school system, customs, postal and immigration services, public roads, public hospitals, sanitation and magistrate's courts. Net governmental operating costs, however, are paid back to the U.S. Treasury as profits from the Panama Canal Company. The Panama Canal Company operates as a corporate enterprise and the basic law requires that it be self-sustaining. Its financial obligations include its own operating expense, the net cost of civil government, interest and depreciation charges of the United States Government's investment in the project and a portion of the annuity paid to the Republic of Panama. The rates of tolls on vessels using the canal are set at levels to recover these costs. The operation of the Panama Canal is a huge venture with an average of 40 to 45 ships passing through the canal each day carrying average tolls of about $6,000 per vessel. HOUSING The Panama Canal Company currently employs 14,800 persons of which approximately 5,000 are Americans and the balance, Panamanians. The company operates a total of 8,000 housing units of which 5,000 are for Americans and 3,000 for Latin Americans. The Military operates approximately 4,500 housing units, making a total of approximately 12,500 housing units in the Canal Zone. The Pacific side of the canal is headquarters for the Military and for the Panama Canal Company. Approximately 65% of the total population of the Canal Zone is located on the Pacific side. Of the total Military population, approximately 19,500 are located on the Pacific side and about 6,900 are located on the Atlantic. TRANSPORTATION Transportation facilities within the Canal Zone are excellent with scheduled buses operated by the armed forces and the Panama Canal Company operating on a regular schedule. There is also passenger train service running from the Atlantic to the Pacific operating seven trains per day, with the 50-mile trip taking about one hour and thirty minutes. There is a good network of roads on both the Atlantic and Pacific sides but the transisthmian highway connecting the two areas leaves a great deal to be desired when compared to modern roads in the United States. SERVICES AND RECREATIONAL FACILITIES The following is a summary of the various community services and recreational facilities available in the Canal Zone. Hospital and medical facilities are not detailed, but are available for each military installation. The facilities listed contain only those facilities furnished by the Military. There are additional recreational and community facilities available from the Panama Canal Company on both the Atlantic and Pacific sides. Under the club category, Officers' Clubs, N.C.O. Clubs and Service Clubs are included. It can be noted from the list below that adequate recreational and community facilities are available in all areas of the Canal Zone except on the west side of the Atlantic at Fort Sherman. The locations of the bases where rental quarters are appraised, are identified below. The identification numbers are as follows: IF is Air Force; IN is Navy; 1A is Army; FA1 is Federal Aviation Administration. These designations are used throughout the report. Note: Other recreational features available in the Republic of Panama include boating, fishing, and hunting. All typical city utilities are available throughout the Canal Zone which include water, sewers, electricity, and telephone service. LOCATION CODE NUMBERS E/P-East side of canal-Pacific A-Army; F-Air Force; N-Navy; FA-FAA; PC-Panama Canal Company; RPC-Panama City; RC-Colon. These code numbers appear on photographs of subject properties, comparable properties and floor plan sketches. 1F-ALBROOK-E/P 2F-HOWARD-W/P 2N-FARFAN ANNEX-W/P 3N-FARFAN RADIO STATION-W/P 4N-HEADQUARTERS ANNEX-E/P 5N-ORDNANCE ANNEX-W/P 6N-RODMAN STATION-W/P 7N-SUMMIT RADIO STATION-E/C 8N-GATUN ANNEX-E/A 9N-COCO SOLO ANNEX-E/A 1A-FT. AMADOR-E/P 2A-FT. CLAYTON-E/P 3A-COCOLI-W/P 4A-COROZAL-E/P 5A-CURUNDU & CURUNDU HTS—E/P 7A-FRANCE FIELD-E/A 10A QUARRY HTS-E/P 13A-MARGARITA-E/A FA9-COCO SOLO-FA1-CARDENAS LOCATIONS OF THE VARIOUS MILITARY FACILITIES Pacific side-East: 1F-Albrook Air Force Base 2A-Fort Clayton 4A-Corozal Army Base 4N-Headquarters Annex Navy 10A-Quarry Heights Army Pacific side-West: 2F-Howard Air Force Base 9A-Fort Kobbe 2N-Farfan Annex Navy 3N-Farfan Radio Navy 6N-Rodman Naval Station 5N-Ordnance Annex Navy 1N-Cocoli Navy Atlantic side-East: 8N-Gatun Annex Navy 8A-Fort Gulick 13A-Margarita 9N-Coco Solo Navy FA9-Coco Solo FAA 7A-France Field Army 11A-Fort Randolph Atlantic side-West: 12A-Fort Sherman TYPOGRAPHY The terrain is generally flat and slightly rolling on both the Atlantic and Pacific sides of the zone. Towards the center of the isthmus, mountain ranges rise to elevations of from 700 to 900 feet. HOUSING AREAS Housing areas in the Canal Zone vary from substandard units in fair to poor condition to modern buildings in excellent condition. In the better housing areas of the Canal Zone, the neighborhoods can be described as beautiful. Landscaping is heavy and tropical with palm-lined streets, beautiful lawns and buildings with architectural design to match the tropical environment. The climate of the Canal Zone is tropical with high humidity and relatively high and even temperatures throughout the year, ranging from 73 to 87 degrees. There are two seasons in Panama-the rainy season and the dry season. The rainy season begins in May and lasts until December. The four to five months dry season which lasts from about January until May is temperate with trade winds that blow almost constantly but during the rainy season, the winds are relatively quiet and the humidity much higher. The rainfall varies greatly between the two sides of the isthmus. On the Atlantic side, the average rainfall is 130 inches and on the Pacific side, the average rainfall is only 68 inches. The mountainous range at the center of the isthmus breaks the warm moisture laden air from the Caribbean; therefore causing less rainfall on the Pacific side. REPUBLIC OF PANAMA DATA LOCATION AND SIZE The Republic of Panama is a long narrow nation averaging about 50 miles wide and extending some 480 miles in an East-West orientation between Colombia and Costa Rica. The area contains approximately 29,400 square miles exclusive of the Canal Zone and is the approximate size of the State of South Carolina. It is among the smallest republics in South America. POPULATION AND ECONOMIC DEVELOPMENT The current estimated population is around 1,400,000 with an annual rate of increase of about 3.2%. Approximately 46% of the population is urban and 54% rural. The two major cities are Panama City on the Pacific with a population of approximately 373,200 and Colon on the Atlantic with a population of approximately 64,900. From the days of discovery, the Panamanian Isthmus has figured importantly in World commerce, first as a link in Spanish colonial trade with the Pacific coast of South America, and later as a continental crossing point in the migration to California during the gold rush days. With the opening of the Panama Canal in 1914, Panama joined Suez as a funnel for World commerce. It has also been important as a transit point in commercial traffic between the Americas. The canal has been a major factor in helping shape Panama's economic development. Bananas are the nation's major export commodity and more than half of the population lives in rural areas, but the economic life centers around the urban complex which has grown at the canal Pacific terminus, Panama City and to a lesser extent, the Atlantic terminus, Colon. In this urban complex, an advanced service centered, commercially oriented economy has been developed. It is an open economy traditionally receptive to foreign participation and favorable to private enterprise. The Colon Free Zone is a good example of this type of activity. The Free Zone was formed in Colon in 1953 as a duty-free, tax-free area with no taxes, duties, consular fees and custom fees. From a 14-acre beginning and ten companies, the zone has now grown to a 100-acre commercial complex of warehouses, manufacturing plants and display centers. During 1968, goods valued at more than $320,000,000 were processed through the Free Zone. The Free Zone was built to satisfy clients' requirements and the buildings may be leased partially or wholly for a period up to 20 years with renewable provisions. Typical warehouse construction cost before interior improvements is $4.00 per square foot. Buildings are leased for a minimum of 200 square meters on a basis of from $0.65 per square meter per month to $0.75 per square meter per month, depending on the amount of space and the term of the lease. $0.75 per square meter per month is equivalent to $0.83 per square foot per year, or $0.69 per square foot per month. The country has a well developed commercial banking system providing international as well as domestic banking services. The official monetary unit is the Balboa. Panama issues only coins and does not issue its own paper currency but utilizes the United States dollar at par as legal tender. This factor serves to increase the nation's attractiveness to foreign investment and has contributed to price stability. There is no more inflation apparent than in the Continental United States. Panama's gross national product growth rate has been among the highest in the 19 Latin American republics. By 1967, Panama's per capita gross national product had risen to third rank among the Latin American republics. Data for late 1968, however, indicates some, and perhaps temporary, slackening of the nation's rate of economic growth for the year. Panama's imports amount to approximately $266,000,000 and exports, $93,000,000. The major exports in 1968 were bananas, petroleum products, and sea food-mainly shrimp. Wage scales in Panama are considerably below wage scales in the Continental United States. The minimum wage ranges from 25 to 50 cents per hour, depending on the area and the occupation. Maids, for instance, can be hired for $10 to $12 per week. In all of the better apartments and dwellings, live-in maid's quarters are provided. In the construction trades, typical labor cost is 60 cents per hour-$1.10 per hour for carpenters, electricians and plumbers and approximately $1.50 per hour |