What's All The Fuss About the South End Real Estate Development?
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Local Real Estate Professionals Not Happy With Tax Incentives and Bay City Times' Editorial Position
Last week (February 18, 2007), MyBayCity.com featured a business article about a South End (Bay City) real estate development.
The article featured comments by RE/MAX Results Broker/Owner Mark Duncan that were critical of the local City Commission for their stance on tax breaks for new houses to be constructed. Read Duncan's Comments Here.
Duncan also ran a "Last Word" classified (Monday and Tuesday) in the Bay City Times challenging the Editorial position (See the complete Bay City Times Editorial at the end of this column) of the Bay City Times and directing readers to MyBayCity.com for the "full story".
Several other real estate professionals chimed in with on-line comments concerning both the Times' and the Commission's position.
So . . . What's the big deal, you ask?
Here's the rub:
The are more houses for sale in Bay City/Bay County, Michigan right now than at any time in history. It's taking longer and longer for sellers to find buyers. Prices are down and being leveraged lower each month as sellers that "have to sell" are forced to bail out and make a deal at any price.
Real estate professionals in Bay County say that offering tax incentives for 180+ new houses in the South End of Bay City will glut the local market even further and drive housing prices into the toilet.
Some say that it's beyond belief that both the Bay City Times and the City of Bay City favor tax incentives for new South End homes.
REALTORS say that "they just don't get it."
One local Real Estate Broker (that asked to not be quoted) said that neither the City Commission nor the Bay City Times' Editorial Board were qualified to take a stand on the issue. "They should have come to real estate professionals for guidance," the broker said. "They have no clue."
That's pretty strong talk.
I have been personally involved in Bay City/Bay County Real Estate since 1983 when my company began publishing the Bay City Homes magazine that is distributed "free" all throughout Bay County and beyond. I know these business men and women very well.
One thing for sure: I have never seen this many REALTORS agree on anything in the last 24 years like they do concerning tax incentives for the South End Bay City development.
Can this many real estate professionals all be wrong?
One More Thing: Last week's article on the South End Real Estate development (fueled by the "Last Word" classifieds) was the most-read one-week article in MyBayCity's 4-year history.
Which means, that the people of Bay City also care.
Perhaps, both the City Commission and The Bay City Times Editorial Board would do well to turn an ear and listen closer to what the real estate professionals of Bay City are saying.
Below is the full text of the Bay City Times' Editorial - February 13, 2007.
Bold type highlights the areas of greatest contention between
the REALTORS and the Bay City Times' position.
Bold type highlights the areas of greatest contention between
the REALTORS and the Bay City Times' position.
Proposed neighborhood will give Bay City new homes it now lacks
Tuesday, February 13, 2007
Bay City has taken its one, last shot for a neighborhood full of sparkling, new homes. Good. We hope it succeeds.
Bay City needs the kind of subdivision that developers John Billette and Toby Bridges envision. Eventually, they want to fill 50 South End acres between Lincoln and Trumbull avenues with 189 single-family homes.
Although a tad outdated, a 1993 study of housing here shaded a snapshot of Bay City in old-fashioned black-and-white. Then, about 83 percent of the city's houses were pre-1960 vintage. Old, if not mostly well-maintained.
Many people who might be looking for a new - or at least newer - home may be forced to head for the 'burbs. That has been one of the reasons why Bay City has lost population while the townships that surround it may have fared a bit better. This South End subdivision could counter that trend.
Local real estate agents, though, wonder what the project will mean for the local housing market. Some worry that the new homes, carrying a proposed break on property taxes, could drive down prices of other houses on the market. But not one that should stumble the city's drive to finally get this land developed.
The developers have said they intend to ask the state to designate the property a neighborhood enterprise zone. That would mean home buyers would pay just half the statewide average in property taxes - 16.86 mills - for six to 12 years. Compare that to Bay City's total residential property tax bill of about 45 mills.
State officials ought to OK that tax break.
New homes on this vacant land have been a long time coming. Starting in 1998, former city manager James M. Palenick pushed hard for a newfangled neighborhood based on a 'new urbanism' concept of townhouses and small homes.
That idea fell like a lead balloon several years later, after a developer said he'd need to add apartments in order to make it fly. City officials didn't have more rental property in mind for the land. Neighbors were foursquare against apartments. So the city has quietly awaited any other ideas for building single-family houses there.
While some people in the area have wanted the property left vacant, or made into a park, Bay City needs this new neighborhood to draw people into the city. Into houses that will be taxed, even if it would be at a lower rate for the first dozen years or so.
It's why the Bay City Commission let the land go for a song. The city paid $566,000 for the property between 1998 and 2003. It is selling the land for $150,000 - actually, it's $100,000 if the developers build at least 50 homes within five years.
Yes, there is the nagging worry that a lot of new homes in Bay City may affect the value of older houses for sale here. But this is something this city, with its drooping revenues and falling population, needs to do.
Build the kind of neighborhood that it lacks, and new residents will come. They'll pay taxes. They'll help revive Bay City. It's a gamble worth taking.
---- Our View is the editorial opinion of The Bay City Times, as determined by the newspaper's editorial board, which includes the editorial page editor, the editor and the publisher.
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O. J. Cunningham |
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