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Charter Township of Orion Market & Financial Feasibility Analysis of the Brown Road Overlay District

Orion Township, Michigan

With the rapid development of commercial and industrial uses along the I-75 corridor in Oakland County, Orion Township sought improve the appearance and mix of uses located in its southern 'gateway'-the area known as the Brown Road Study Area. The Brown Road Master Plan identified a portion of the Brown Road frontage as 'Research Industry.' The Township's Planning Consultant drafted text for an Overlay District to encourage redevelopment of the area into high technology research and industrial park uses. The Township then sought to determine if there was a market for the types of uses envisioned and if development of the study with such uses would be financially feasible.

Our firm, in partnership with another, was retained to prepare a two-phase analysis of these issues. Phase 1 examined the market potential of the Overlay District to determine if there was already an adequate supply of lands zoned for such uses in the marketplace and whether the study area was competitively positioned to take advantage of the market demand for such uses.

Then, working with a conceptual site plan and with cut and fill estimates provided by the township's engineering consultant, we utilized a development approach to prepare the Phase 2 analysis of the potential financial feasibility were the study area to develop as a high technology research and industrial park.

Our analysis was the second phase of a two-part analysis. The first study (performed by a partner organization) examined the market potential of the Overlay District to determine if there was already an adequate supply of lands zoned for

 

such uses in the marketplace and whether the study area was competitively positioned to take advantage of the market demand for such uses. The study concluded that there were reasonable prospects of market absorption for the study area were the Overlay District to be established.

Research steps for our analysis included determination of the value of each individual lot as it sells off (utilizing the supply and demand analysis and concluded sell off timing determined in the Phase 1 market analysis), estimation of site improvement costs (other than those provided by the township's engineer), lot pricing, holding costs and the assumed developer's profit.

A discounted future cash flow, following deduction for developer's profit, was then prepared to identify the residual land value, or that amount of money a developer could feasibly pay for the subject property.

The Phase 2 analysis was based on the hypothetical assumption that the land was under one ownership, that the proposed overlay zoning district had been approved, that a special assessment district was established to fund the extension of sewer lines to the property, and that a large on-site gravel pit was restored to a minimum required grade level.

The Phase 1 and 2 reports provided input to the variety of factors considered by the Township relative to its implementation of the proposed overlay zoning district in the Brown Road study area.

Allen & Associates Appraisal Group Troy

5700 Crooks Road
Suite 200
Troy, MI 48098
Phone: (248) 433-9630
Fax: (248) 433-1314



Allen & Associates Appraisal Group Detroit

4444 Second Avenue
Detroit, MI 48201
(313) 753-1715

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