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Primrose construction : a hypothetical development / by Scott Duane Beckwith.

by Beckwith, Scott Duane.

Housing development

Neighborhood planning

Land speculation

vii, 126 leaves : ill., maps, charts, plans ; 29 cm.

Purpose -- Phase one: Real estate selection -- Tax incremental finance districts -- Establishing a tax incremental district -- TIF district expenses -- Phase one - expense summary -- TIF spread sheet analysis -- TIF spread sheet strategies -- Phase two: Market plan synopsis -- Sales forecast synopsis -- Development income expenses -- Sensitivity analysis strategies -- Summary -- Conclusion.

The six block section in Milwaukee’s Central City would be completely redeveloped to attract middle and upper income families. The primary target market will be minority families who could afford housing in the suburbs, but chose to live in the city because they feel more accepted there. The secondary market will be young married couples with no children. They will be individuals who work downtown and enjoy all the activities the city has to offer. Both groups will demand a safe and secure environment and will be willing to pay for it. They will also appreciate the close proximity to the downtown area and the freeway. Finally, they will enjoy all the amenities that a new custom built has to offer. House and lot will sell for approximately $150,000 plus association fees incurred for lawn care, snow removal, recreational areas, and security. The target market will have a combined family income in the range between $60,000 to $90,000 per year. The land will be acquired through the city’s redevelopment authority’s power of eminent domain. The anticipated cost for acquisition, relocation and demolition is estimated to be $3.4 million dollars. Financing will be obtained from the city’s sale of a bond. The bond is then repaid through Tax Incremental Financing (TIF). TIF is an agreement between the tax authority’s to only collect the current tax revenue in a given area for a specified term. The difference between the new revenue and current one is deducted to pay off the bond. Once the land is cleared it will be given to the developer. Initial improvements such as speculation built homes and site work will be the responsibility of the developer. An initial investment of $100,000 will be used to cover incidental start up costs. $1,063,764 will be borrowed for a period of three years to make improvements which will be held as collateral to the loan. $709,176 will be used to cover the cost of constructing eight speculation built homes. Seven of these units will serve as model homes until they are sold. The eighth unit, a value of $150,000, will be used as the main office and will be turned over to the association as a storage and recreation facility upon completion of the project. The balance of $225,000 will be expended on site improvements which include the security system, green space and recreational areas. The project should take about three and one half years to complete. The first nine to twelve months will be devoted to clearing the land. In the following period, twenty five homes are anticipated to be built and sold each year. The feasibility study projects profits to be about $150,905 million dollars with an Internal Rate of Return of 20.13%. One final note, in the spirit of good community relations, Primrose Development will establish a Discretionary Responsibility account. $144,000 will be deducted from the project and placed in an annuity for the betterment and economic relief of the residents who will be displaced as a result of the project.

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