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MJLO

By MJLO
in Grand Rapids

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torgo Town

torgo

Posted
Posted

I think we all need to wait and see, and not get discouraged (at least not yet). For all the news reports, there is very little real, concrete information out there. It sounds like Faust isn't the man with the money. In that case, I see him as the "glue"...he is the guy coordinating this thing, but not the guy with the money.

Whatever it is that is happening, the real developer's PR needs to come out and inform the masses before the wheels come off the truck. All the secrecy is going to become a liability they aren't careful.

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quoteme3 Whistle-Stop

quoteme3

Posted
Posted

In the ESNA Report:

"Demonstrating the impact that zoning changes may have on property valuations, Grubb & Ellis has identified two land parcels that were purchased in the Grand Rapids metropolitan area as agricultural parcels and later rezoned to residential and commercial/PUD parcels. Each parcel appreciated at least 10 times its previous value by moving from the least valuable to the most valuable zoning (see appendix)."

Can any developers here explain if this is standard operating procedure???

Can Faust grab a sooner flight to GR than "later this week"????? :lol:

Its done all the time. I was recently part of a rezone/variance out of state that tripled the value of the dirt.

But 10X ??? huh? Ours was for one 10 acre parcel... this is HOW many properties? Im sure the zoning around the city land is some kind of industrial... not much of a step to commercial or even residential.

Its not like its cow pasture that a city will rise from. The people agreeing to the options all wouldnt GIVE away their businesses/locations for a song, so its not like these guys are starting with bargain basement land.

The bothersome thing to me is that what was uncovered was the equivalant to a Game Plan, a strategy

for going forward. It is depenent on the city doing something they just would not do (nice backpeddle job today Mayor)...... well hey if the city will just lend us the land for a few years and give us anything we ask of a rezone/variance/PUD, we'll be set to sell in no time. Nice vision.

So if that was a game plan of a year ago... why would it change? What would happen since then that would make the 40 acre quick flip no longer the objective?

At this point I am almost hoping this is an elaborate trick to get the hounds of the trail (the site plan map of the wrong city is puzzling), BUT, I am also hoping that ticket I buy friday night is the big winner.

And oh yeah, b4 my 2 cents runs out........ the FRONT guy owes back taxes in Cali?

WTF

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GRDadof3 Ecumenopolis

GRDadof3

Posted
Posted

I've given up on the "Columbo" work for a while. I think we've shined a pretty good spotlight on this thing that maybe the mainstream press wasn't. Maybe even the "A" team is asking some hard questions of the the "B" team. That's what we're here for.

As more news comes out, we'll jump back in a rip it apart again. :thumbsup:

So, what else is going on in GR?

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Time Whistle-Stop

Time

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Posted

Developer, in his word says several high rises... Changing the skyline.

Hometime connection is included in channel 8s update.

Where did you here in info about changing the skyline? It is not in the text version of Wood's coverage.

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Time Whistle-Stop

Time

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Posted

Geha did a phone interview, something of an hour or so long and it was updated on a piece at 5... This is an update for me because it confirms highrises as directly from developer.

Sounds good, can't wait to watch the news tonight!

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civitas Burg

civitas

Posted
Posted

In the ESNA Report:

"Demonstrating the impact that zoning changes may have on property valuations, Grubb & Ellis has identified two land parcels that were purchased in the Grand Rapids metropolitan area as agricultural parcels and later rezoned to residential and commercial/PUD parcels. Each parcel appreciated at least 10 times its previous value by moving from the least valuable to the most valuable zoning (see appendix)."

Can any developers here explain if this is standard operating procedure???

Can Faust grab a sooner flight to GR than "later this week"????? :lol:

Adding value is a primary function of the development business. If you can buy something for $75 and increase its value to $100 you have created the 25% equity that a bank may require for a mortgage. Value can be added through a number of ways, rezoning from agricultural to commercial would represent a extreme example, assuming, of course, that you were able to buy the land at agricultural prices.

The Grubb and Ellis examples did in fact increase in value by nearly 10 times, but only after many millions of dollars were invested in site improvements and off-site infrastructure. Rezoning alone did not generate that amount of added value, in fact, the land was purchased at a fair market commercial value. The 10x increase only came through improvements and market dynamics.

To put land values in perspective, undeveloped greenfield commercial land can be bought for $150,000 per acre. The city is asking over $2,000,000 an acre for their urban land. The proposal for this property depends on the developer buying everything but the city's land and selling it at significant profit to end users over a 3 year period. That profit will then be used to pay the city for their land. The stategy fails if the city won't accept "seller financing" on the riverfront land and the mayor now says the city isn't interested in such a deal. The carrying cost on $70,000,000 worth of land for a 3-year startup period is $5m per year at 7%. That's a huge burdon for any development.

If this is only a speculative venture based on land control it will likely fail to attrack necessary capital. The market for that much of anything is very hard to predict and, therefore, very high risk. It seems that the PR folks will have to start exposing hard deals with major end users real soon or this plan will quickly loose credibility.

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civitas Burg

civitas

Posted
Posted

Developer, in his word says several high rises... Changing the skyline.

Hometime connection is included in channel 8s update.

Highrises are really easy to draw, but without hard deals with major tenants they won't get built.

The DeVos and Ellis tower at Pearl and Ottawa was as well financed as any project in the history of development, but it didn't happen because there was no market. The second tower at Bridgewater has been how many years in the making?

No more hype, show us the tenants!

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GRDadof3 Ecumenopolis

GRDadof3

Posted
Posted

Adding value is a primary function of the development business. If you can buy something for $75 and increase its value to $100 you have created the 25% equity that a bank may require for a mortgage. Value can be added through a number of ways, rezoning from agricultural to commercial would represent a extreme example, assuming, of course, that you were able to buy the land at agricultural prices.

The Grubb and Ellis examples did in fact increase in value by nearly 10 times, but only after many millions of dollars were invested in site improvements and off-site infrastructure. Rezoning alone did not generate that amount of added value, in fact, the land was purchased at a fair market commercial value. The 10x increase only came through improvements and market dynamics.

To put land values in perspective, undeveloped greenfield commercial land can be bought for $150,000 per acre. The city is asking over $2,000,000 an acre for their urban land. The proposal for this property depends on the developer buying everything but the city's land and selling it at significant profit to end users over a 3 year period. That profit will then be used to pay the city for their land. The stategy fails if the city won't accept "seller financing" on the riverfront land and the mayor now says the city isn't interested in such a deal. The carrying cost on $70,000,000 worth of land for a 3-year startup period is $5m per year at 7%. That's a huge burdon for any development.

If this is only a speculative venture based on land control it will likely fail to attrack necessary capital. The market for that much of anything is very hard to predict and, therefore, very high risk. It seems that the PR folks will have to start exposing hard deals with major end users real soon or this plan will quickly loose credibility.

Thanks civitas! I'm with you: show me the money! :P

If Faust comes out with his announcement later this week and says "All will be shown to you in due time", it's gonna be a maelstrom around here! :silly:

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civitas Burg

civitas

Posted
Posted

Developer, in his word says several high rises... Changing the skyline.

Hometime connection is included in channel 8s update.

Much discussion has occured regarding use and development, but sooner or later the matter of urban form should become important. I would suggest that an outwardly-oriented mid-rise solution with 3-6 story buildings (GVSU DeVos Center) is a much more community friendly form than inwardly-oriented high-rise buildings (GVSU Eberhard Center, Bridgewater).

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jp1631 Crossroads

jp1631

Posted
Posted

Faust: "We plan to build a large scale, mixed-use infrastructure development project that will serve as the standard bearer for not only Grand Rapids but the entire state of Michigan, making the transition from an industrial, manufacturing-based economy to a technology-economic-health care-entertainment as well as financial economy that everyone else is doing in the country."

"Financial economy?" Could the large/international tenant be a banking/financial institution? Just grasping at straws...

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Rizzo City

Rizzo

Posted
Posted

^Hometown, sorry for the mistype

Wood although really had nothing new, except the Developer basicly confirmed Canary warf as an example of what this development will have. This development will have a marina. I believe this is where Langlois and others thought of as international map. (Canary warf idea)

I want to see who is "they" that the developer will be bringing to town.

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ClownFromThe60s Crossroads

ClownFromThe60s

Posted
Posted

Much discussion has occured regarding use and development, but sooner or later the matter of urban form should become important. I would suggest that an outwardly-oriented mid-rise solution with 3-6 story buildings (GVSU DeVos Center) is a much more community friendly form than inwardly-oriented high-rise buildings (GVSU Eberhard Center, Bridgewater).

I can't imagine it costing 1.6 billion +, just consisting of several (or even many) 3-6 story buildings? Am I wrong to think this?

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snoogit Town

snoogit

Posted
Posted

I can't imagine it costing 1.6 billion +, just consisting of several (or even many) 3-6 story buildings? Am I wrong to think this?

Its not several 3-6 story buildings, Civitas was using that as an example that a shorter building can feel more community oriented then a large tall one can.

Although if there is a "Vertical Mall" that might only be 3-5 stories.

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