Completing the second phase of a market and economic analysis of a Brown Road Overlay District, Allen & Associates Appraisal Group and Real Estate Development Research have told the Orion trustees that there is a market feasible for technological and research facilities on Brown Road.
Phase I of the study, determining if a market did exist, was presented to the board in January 2003, and on May 17 they learned the results of the study’s Phase II.
‘The conclusion of the first phase was yes, there’s a market,? said Deborah Bobowski of Real Estate Development Research. ‘These are the conclusions of the market analysis (in Phase II). We want to remind the board that assumptions were made all along…for the purpose to determine if there is a market.
‘We’ve determined that yes there is an underlying residual value to the land, with pieces being sold off by different owners in time.?
Larry Allen, of Allen & Associates, told the board that the conclusion of the study was that it would be financially feasible for Orion Township to create the district.
‘At a land price of $9 million (for a 15-acre parcel), developers could absorb lots of (development) costs,? he said, adding that a side plan included 56 lots, being sold 10 per year at the cost of $650-$750 per square foot.
‘From this potential revenue stream, with costs such as property tax, insurance and closing costs subtracted, there would be $1.7 million in cut and building costs,? Allen added. ‘The major cost was just site improvements (including roads and utilities), at $2 million.?
Approximately $1.5 million would be the township’s share of the cost of easements to extend sewer lines to the site.
‘These assumptions are hypothetical,? Allen said. ‘The actual site will probably be developed differently.?
Trustee Richard Tomczak was concerned about the cost of the sewer.
‘We’re looking at a $9 million purchase price for the overlay district…There’s a cost of $3 million for the sewer alone,? he said. ‘One third of the total cost will be for putting in sewers for development.?
According to township engineers Orchard, Hiltz and McCliment. it’s been determined 39 percent of sewer costs going to the township.
‘Perhaps other costs would have to be absorbed by other users,? Allen said, adding that individual special assessment districts (SADs) could be put in place for each piece of property.
‘A location like that would typically demand a higher price,? he said. ‘Due to costs the developers will be absorbing, they can pay more. It still can absorb the $3.8 million total cost.?
Regarding the first phase of the study being completed in October 2002 and presented to the board in January, Tomczak wondered if too much time had passed.
‘It this still a viable project?? he asked.
Bobowski said the study was done based on looking at the market several years in time.
‘For planning purposes,? she explained. ‘You must plan for a 20-30 year time horizon. We couldn’t assign a date…You wouldn’t want market information older than six months, but we’re not financing it tomorrow.?
‘Things are happening in (that) area on Baldwin Road,? said treasurer James Marleau. ‘The planning commission did not want to go into the retail business.
‘Auburn Hills is doing the same with some of their area,? he said. ‘There’s no need for retail, (technological research and development uses) were what we were asked for this property.?
‘You’ll be able to achieve decent-sized research parcels without a problem,? Bobowski said.