Saturday, January 11, 2014

Should the City buy the Edwards Bros. Property?

The University of Michigan has made an offer to buy the local book manufacturer's 16.7 acre property on South State Street for $12.8 million. Due to a 2010 tax abatement agreement, the city has right of first refusal for any sale. The City Council is exploring the option of exercising the aforementioned right.

If the city does nothing, they will lose the property tax revenue from the Edwards Brothers Land. Currently the property pays about $180,000 annually. That said, the assessed value for the property is about $3.1 million so the University is willing to pay substantially more than the value of the parcel. Paying $12.8 million to preserve annual property tax revenue of $180k seems like a raw deal. That said, if the city could quickly "flip" the property, it could result in a larger property tax stream in the future. Still, it seems like it would take a lot of work on the city's part to make sure this investment would pay off.

1 comment:

  1. There's a big risk to having a big chunk of real estate on the city's books - consider the Ypsilanti "Water Street" project as a note of caution.