My view on biz park proposal
I have been a professional real estate appraiser for 37 years, and my firm has been in existence since 1950. In as much, we have appraised numerous industrial and business parks throughout the Southeast. Although I have not read the McGill Associates report, I can offer my own personal observations.
From a positive perspective, the Greene property offers a lower land value for acquisition, provides a larger tract for development, has a low tax base and there is likely to be a good labor pool between existing residents and graduates of ASU.
However, from a negative perspective a business park in this location is not likely to represent a financially feasible use given its distance and inferior access from U.S. 421 that would provide access to I-77, I-40 and I-85 for distribution of finished goods and/or receipt of raw materials for manufacturing. The site is too large and the absorption or sellout would be many decades, provided there is demand. There are no other related businesses in the area that could provide synergistic influences and ancillary support.
In order to attract end users, there will likely be the need for tax credits, property tax abatements, job creation tax rebates, tax increment financing, research and development tax credits and likely energy rate discounts to mention the possible forms of financial inducements.
From a physical development perspective, there would be the significant costs of providing infrastructure improvements, such as the road widening (hindered by streams and several rock outcroppings along N.C. 194 N.), as well as the topography of the land with its undulating hills with steep grades, as well as wetland areas. The unsightly overhead power lines would not necessarily be an impediment to development as this area could remain as open space or a buffer.
What about marketability? In my travels around Boone and Watauga County, I have noted vacant industrial properties that have been available for sale or lease for many years. From a buyer or user perspective, would it not be more desirable to obtain either a developed property or land having infrastructure and sufficient land area for future expansion or development? Any reliance on general population change is not useful as an indication of industrial/business park demand.
Demand must address some other product types for industrial real estate to be financially feasible.
Discussing which probable users would represent the highest and best use would require significant analysis. I am not sure this has been adequately addressed. In addressing a property's highest and best use, one must consider the legally permitted uses. Would the subject not require a rezoning?
It must also be physically possible. There are physical limitations associated with the property and significant costs. There is also the issue of being financially feasible. Construction costs are higher in the mountains, and especially on hillsides as compared to flat land development. In the event of leasing, can an investor achieve an adequate return on invested capital? Would there be a resale market in the event a building went dark or vacated?
Finally, what would be considered maximally productive uses of the property? What would the mix of users be? Would they include warehouses, manufacturing, processing, single uses or special purpose uses? Moreover, what would be the maximum building areas and heights?
A developer cannot simply be enamored with the physical beauty and panorama this property offers nor its very affordable price. A cost-benefit analysis should be undertaken. In my expert opinion, I do not see this property being the ideal site for an industrial/business park that would meet with market demand and financial feasibility during the long run.
Again, I am not opposed to the property being sold and eventually developed. This property has a continued interim agricultural use until such time as the market recovers. In my opinion, this property has more development potential as a recreational or residential use or combination thereof.
I am pro growth, but the right type of growth and in the right location. An industrial/business park would be more suitable on a smaller tract of 50-75 acres along U.S. 421 to the east of town.
Frank A. Catlett