MEDC adds industrial real estate marketing tool

December 14, 2009
| By Pete Daly |
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Following the lead of other states, the Michigan Economic Development Corp. has established a Project Ready Site Program to help identify and market sites of 200 acres or more that are shovel-ready for immediate development as industrial, warehouse or high-tech types of use.

According to some West Michigan industrial real estate experts, there aren't a lot of large, shovel-ready parcels like that available in West Michigan, but the MEDC Project Ready program can only help, in the face of stiff competition for major new business investments.

Two hundred acres is "a pretty big parcel. We might have one or two that we'll be able to put together here" for the program, said Susan Jackson, vice president of business development at The Right Place in Grand Rapids.

The ideal shovel-ready site would be cleared land that is already zoned for a developer's intended industrial uses — or can be quickly. Sites zoned or planned for residential, retail or commercial development are not eligible for the program, according to the MEDC Web site.

The qualified parcel would already have all utilities, access to a highway, a problem-free environmental impact assessment, and no liens against it, among other things.

"It's very stringent criteria" to qualify as a Project Ready Site, said Jackson. For example, she mentioned a well-known 250-acre parcel near the Lowell exit on I-96, which is being marketed by Robert Grooters. That property probably would not meet the MEDC criteria, she said, because the closest utilities are a mile away.

"Which is one of the reasons it hasn't been developed," said Jackson. "It's extremely expensive and very time consuming" to bring utilities to the site.

Nonetheless, she said the Project Ready program is a good idea because "any additional marketing tool is a good thing."

"Not that anybody gets lots of large projects" requiring major investments in property, "but if there was one looking here, we'd like to be ready," said Jackson.

In announcing the program, D. Gregory Main, president/CEO of the MEDC, noted that "many other states have similar 'Shovel Ready' or 'Certified Sites' programs that they have successfully used to secure new investment projects."

"We encourage you to consider seeking this prestigious designation for your best sites. The current competitive environment, in which speed to market is key, makes it essential to have sites that can be readily developed for new projects," said Main.

The Project Ready program requires "significant due diligence to be completed in advance to demonstrate that the sites are truly ready to go," said Main. With that work done in advance, he said it can save a potential developer approximately six months in investigatory time and thousands of dollars in due diligence studies.

The Project Ready designation will be awarded after the application is reviewed by representatives from MEDC and other state departments, as well as an independent engineering consultant who will verify that the site is actually Project Ready. Sites will then be marketed by the state and the local community as Project Ready sites that are pre-screened and ready for development. Involvement of state departments upfront will help expedite required permitting, said Main.

Two commercial/industrial real estate firms in the Grand Rapids area each have a large listing that may qualify for the program.

Duke Suwyn of Grubb & Ellis|Paramount Commerce said he plans to submit to the MEDC a 200-acre site near Broadmoor/M-6 and 60th Street, part of the Meadowbrook Business Park. It already has all utilities and is near the Gerald R. Ford International Airport.

Kwekel Cos. has a listing for a 274-acre parcel at the Dorr exit on U.S. 131. Damon Root, vice president at Kwekel, thinks the property probably would qualify easily for a Project Ready designation by MEDC. He said utilities reach the site and the zoning is "structured around an industrial-type classification." Root said he thinks the property has been on the market for as long as 10 years now, not all of that time with Kwekel.

"Locally and on a state level, this site is pretty well known," he said, adding that it is the largest contiguous tract of land that Kwekel has on the market right now.

"It's got to be one of the larger ones in the area," he said.

Muskegon has at least three available pieces of property that may eventually be able to qualify as Project Ready, according to Ed Garner, president and CEO of Muskegon Area First, a private, nonprofit economic development corporation serving Muskegon County.

One is the Muskegon County Business Park North, a 210-acre parcel in Dalton Township that was formerly a chemical manufacturing site. It has been cleaned up and is now owned by the county. The land is a Renaissance Zone, with most state and local taxes abated through 2014.

Another parcel, which is well over 300 acres, is part of the privately owned Bayer Crop Science land in Muskegon Township. Bayer only uses about 40 acres of the 400-acre site.

The third potential Project Ready site is 1,100 acres at the massive Muskegon County Wastewater Treatment facility at East Apple Avenue and North Maple Island Road. For the last couple of years, Muskegon County has been trying to market that unused acreage; however, Garner concedes there is a problem with it: There are no water lines to it.

"But if we had a project, we may be able to get water lines out there," he said.

Garner said a fourth potential Project Ready site is more than 200 acres owned by Egelston Township, which is also near the county wastewater treatment land and also lacks water mains.

To encourage creation of Project Ready sites on government-owned lands, the MEDC has plans to reimburse some of the cost of obtaining the due diligence site information, for a limited number of sites. Main said it will be a "competitive" process: the sites that receive the Project Ready designation and are "best positioned for future large-scale development" will be reimbursed up to $100,000 or 50 percent of the cost of the due diligence, whichever is less.

Garner said his staff is "already collecting some data" for the three most promising sites in Muskegon County.

"We'd love to have these identified by the state as ready to go," he said.

Ken Rizzio, director of Ottawa County Economic Development, is looking but does not have a qualifying Project Ready site yet.

"My experience has been that it's hard to find large sites in Ottawa, because there is just so much development here. Areas that have water and sewer are pretty much developed," said Rizzio.

"When you get (a developer seeking) 200 acres, and in some cases, up to a thousand acres, it's very difficult to find that here in Ottawa County," he added. "The larger that acreage gets, the harder it is to find."

Additional information on MEDC Project Ready Sites and applications can be found at www.themedc.org/projectreadysites

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