The Community and Economic Development Committee met 03/09/2023. One of the items they took up was a request to approve an increase to the selling prices for land in the city’s business and industrial park from $40,000 per acre to $43,000 per acre. The committee unanimously approved the request.
I’ve prepared a transcript of the complete discussion for download.
Economic Development Specialist Matt Rehbein told the committee that every year he does a survey of local asking prices and recent sale prices to judge demand for industrial land and come up with pricing recommendations for the land in the city-owned business and industrial parks.
For a number of years, the city had been selling land at $40,000 an acre. It has been selling pretty well and they have not had any potential buyer balk at the price He looked at asking and selling prices for local comparable land, adjusted for the fact that there may be wetlands or that those other properties may not be as fully served by utilities or ready to build on as the land in Appleton and was now recommending that the city raise prices to $43,000 per acre which was still a discount compared to what a private developer would be paying for land.
He also noted that historically the city had paid an 8% real estate commission to procuring brokers who brought a deal to them. They would like to continue that practice because they had found that the real estate broker community had brought half the deals if not more to the city, and they wanted to maintain that incentive for brokers to generate business for the city. An 8% commission was market rate for raw land sales.
Staff was also recommending that the city maintain the current option fees that were in place which were 2% of the purchase price per year for lots more than 5 acres and 1% for lots under 5 acres. They kept the price lower for the smaller lots as a way to make things easier for smaller businesses who, for example, were potentially looking to expand a 10,000 square foot building to 20,000 or 30,000 square feet. Business of that size were more likely to be smaller, privately held businesses. On the other hand, the larger lots were more likely to hold larger corporations who were better able to absorb the cost to option those lots.
The city currently had 51 acres in the Southpoint Commerce Park that were not under contract and would be available to be sold at the increased $43,000 per acre price. There was an additional 30 acres that was under contract at $39,000 an acre.
Additionally, the city had been discussing developing the area between Coop Road and Eisenhower Drive which would increase the amount of land available.
$43,000 per acre was a little lower than what market rate would be, but the city preferred to keep the price lower so that they could be purchased, built upon, and enter the tax base. Additionally, the city could not provide any sort of tax incremental financing incentive in the Southpoint Commerce Park because the TIF district in that area has been closed as of 01/01/2023. That meant the only incentive the city could provide was the price of the land.
The committee voted unanimously to approve the recommended price increase and to maintain the option fees at their current levels.
View full meeting details and video here: https://cityofappleton.legistar.com/MeetingDetail.aspx?ID=1074133&GUID=EB203097-4348-487D-80B6-75F12BB1F421
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