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Wednesday, 26 September 2007 00:00

The Super Wal-Mart land rush: Discount retail giant brings rising property prices

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By Julia Merchant • Staff Writer

Roger Winge knew a good deal when he spotted one.

Before Super Wal-Mart had announced plans to set foot in Waynesville, Winge, a local realtor, took one look at the 30-acre former industrial site once occupied by the Dayco rubber plant and saw dollar signs.

Winge, though, wasn’t interested in the site itself. Instead, his eyes drifted across the street as he set his gaze on the old buildings lining South Main Street. And there he saw it — opportunity.

The buildings themselves — a well-known barbeque restaurant and a couple of decrepit houses — weren’t much to look at. But to Winge, the land they were sitting on might as well have been solid gold.

Winge, who sold property in Atlanta for 40 years, has seen just what happens when a sizeable development like a big box store or mall goes into a community. Practically overnight, the value of commercial properties around the development site can skyrocket.

After county economic development officials bought the site and worked to market it, Winge suspected a big box store would inevitably occupy the old industrial site.

“I believe I didn’t know at the time who exactly was going to buy it, but I knew it was going to be a large commercial piece and they would have some major anchors,” recounts Winge. “I knew that whatever commercial development went in there would be a boon to the area.”

Acting on a hunch developed from years of experience, Winge set out knocking on doors and trying to convince the residents and business owners to let him list their property.

Though none of them were looking to sell, that didn’t stop Winge. He didn’t have much difficulty convincing the owners of the building that housed Big Mountain BBQ to list their property with him. The same people owned a residential house two lots over from Big Mountain BBQ; they also offered up that tract. Winge worked on the owner of a house in the middle of the two lots “for four months before he actually listed with me, because he really wasn’t interested in selling the property.”

The owner finally caved after realizing the property would be worth big bucks. Winge wanted to piece together the three tracts to sell as one, to make it a more desirable location that would be easier to build on.

The most current appraisal of the land according to county tax records lists the Big Mountain BBQ property at a total value of $267,230. The houses and their lots were worth roughly $150,000 each, bringing the total appraised value of the three adjacent lots to around $570,000.

Winge is under negotiation to sell the tracts for $1.6 million.

 

Here come the developers

It’s not every day the price of a piece of property shoots up nearly $1 million. But that’s exactly what happens when something like a Super Wal-Mart comes to town, because other stores want a piece of the market the big development will attract.

Mark Clasby, director of Haywood County’s Economic Development Commission, has seen a recent increase in calls inquiring about the Super Wal-Mart and land around it.

“There’s been a significant number of calls from out of state — we’re talking about substantial developers,” Clasby said.

Clasby explained that there is a pattern that follows a big box store development.

“Wal-Mart and Home Depot are the traffic generators. Then there’s the smaller developers who are interested in knowing what’s going on on South Main Street and the surrounding area. It’s a combination of bigger developers and smaller developers and investors wanting to know about property in the area,” Clasby said of the calls he gets.

Winge says it’s the “shadow” effect.

“There are brokers that work for development companies that go out and shadow Super Wal-Marts, Home Depots, and the bigger developments, and look for property around there,” says Winge.

For example, Winge is hoping a national drug store chain or similar business will buy the parcel he’s listing.

Since the official closing on the former Dayco property, Winge has seen an increased interest in the $1.6 million tract. In the last month, he’s been contacted by brokers from Atlanta, Charlotte, Knoxville and Florida asking about the property. It’s these people’s job to keep an eye on giant developments going up and then race to put chain stores around them.

Winge said the traffic generators are exactly what smaller chains are looking to follow in order to feed off of the customer base.

“It’s bodies and traffic counts that make property worth something,” he explained.

The anticipated 20,000 cars a day that will flow past businesses on South Main Street hasn’t yet materialized, but that hasn’t stopped values from skyrocketing. The value of properites in the area rose so quickly that Steve Smith, a property appraiser in the tax assessor’s office in Haywood County, admits the appraised values are a gross misrepresentation of what some of the properties are actually worth in the marketplace.

Properties are appraised every four years for tax purposes. The properties on South Main Street were last appraised on Jan. 1, 2006, when the crumbling eyesore of the Dayco site sat unoccupied across the street, its future uncertain. Since the Dayco deal had not yet closed at the time of the last countywide appraisal, county appraisers decided not to even figure in the possibility of a big development on the site. They didn’t want to over-appraise and give residents the false hope that their property was worth much more than before.

The properties around the intersection of South Main and Hyatt Creek roads would usually be appraised again in 2009. However, anytime a large development with a significant impact on property values comes into an area, the properties around it must be re-appraised immediately rather than waiting until the next appraisal period. The properties around the Super-Walmart will be appraised after the building is completed.

Winge’s $1.6 million tract is a good baseline for what the property around the new store will be worth.

“What appraisers do is look for comparables, so if mine was sold and closed, they would use it as a comparable for a tract with similar access and location,” said Winge.

Property owners are already catching on to the increased value of their parcels, as evidenced by two properties currently listed. Down the street from Winge’s property, Sambob’s convenience store is listed for $1.1 million, though it’s appraised at $250,920. Nearby Carroll’s Fine Food and Games is listed for almost $500,000 but appraised at $340,000.

“Now that the Dayco property is really happening, it’s creating a lot of interest for the whole area,” said Clasby. “There’s going to be a very significant economic boom.”

 

Little land available

Brokers and realtors are scurrying to get a piece of the pie, which is fast disappearing since it wasn’t that big to begin with, says Winge.

“Brokers ask me to find them properties around there, but there’s not much else available. I’ve looked through the area,” Winge said.

One business that jumped at the chance to get property by the new Wal-Mart is Old Town Bank, a new Haywood County Bank that just earned its state charter. Seeing the opportunity for a prime location, Old Town purchased two lots on South Main Street.

“The traffic will increase drastically and there will be lots and lots of people going by and seeing the bank. (It’s about) visibility and exposure,” said Joe Taylor, the bank’s vice chairman.

Though other businesses with Old Town bank’s mindset may be disappointed at the lack of available land, Winge said more will likely become available as more property owners decide to put their valuable land on the market. Once they’re ready to sell, they’ll have a number of Realtors at their beck and call.

One South Main Street storeowner who declined to be named said one Realtor sent a letter to all storeowners in the area around October of last year encouraging owners to contact them if they wanted to talk about selling their property.

Winge himself, as mentioned before, visited with property owners for months before they agreed to list their property.

 

Hanging around

Bob’s Sports Store co-owner Catherine Hambrick said she’s already been seriously approached by four different Realtors — some pushier than others — offering her their services. Hambrick, though, will be a tough sell. The land where her mom and pop athletic store sits has been in her family since 1930 and once was the site of her grandfather’s corn mill. It’s sentimental, and Bob’s has been a cornerstone of the local sports scene for years. Hambrick has so far told Realtors she’s “not in the least bit interested.”

Keeping a property, however, doesn’t always remain an option for a small business when the land shoots up in value. Factors like property taxes and rent can force businesses to relocate. Hambrick admits she’s thought about the property tax burden when her land is re-valued in the next couple of years.

“I’ve said jokingly to people, once we get that tax bill, we may have to reconsider,” Hambrick said.

Hambrick owns her building, but others who rent might not be so lucky. Though it’s illegal to kick a tenant with a lease out of a building just because it would be more profitable to sell, the building’s owner can raise rent to a price that’s no longer affordable.

Deborah Matthews, general manager at Pasquale’s, is one of the lucky ones — her rent is fixedin a long-term lease, preventing the landlord from raising it anytime soon. That wasn’t the case with nearby Big Mountain BBQ, which had to relocate when the owner opted to sell the property.

Winge cautions that owners of property on South Main need to understand that there are limits and specifications that make their property valuable to potential commercial development. Not every piece of property is going to be desireable simply because it’s in the right area, he says. If a property isn’t zoned commercial, has a railroad running through it or lacks frontage on South Main, it will likely be less attractive to investors.

“People think that simply because they have a house in that area, and they hear these prices (their property is valuable). What they don’t realize is that without the zoning or exposure, it just doesn’t equate,” Winge explained.

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