Village buys 153 acres to expand industrial park
Dundee Village Council approved the purchase of 153 acres to expand the industrial park, at a special meeting on Tuesday, March 23.

The land is being purchased from Monroe Bank & Trust. The property had been through bankruptcy proceedings. Formerly the Davis property, the acreage is located off Ann Arbor Road, and extends to the area to be occupied by the Arbor Chase housing development.

“It has been structured as a grant agreement,” said Village Manager Patrick Burtch. “The state is giving us $2.5 million to extend our industrial park in terms of engineering and roads, water and sewer lines.”

The construction of the industrial park expansion is expected to be done by November 15.
Monroe Bank & Trust is deeding the property over to the Village. The Village will have five years in which to market and sell the property as “improved.”

The value placed on the unimproved land is $3.4 million, with 4% interest. The $2.5 million state grant counts as the down payment, and there are no closing costs. The bank is deeding the land over to the Village, with payments to the bank to follow sales. The bank has set a minimum price on the land, and the Village will set the maximum price. The bank will receive a payment after the sale of each parcel.

“The Village will be able to keep the difference between the minimum required by the bank, and the sale price, set by the Village,” said Mr. Burtch. “The Village can keep that money, or apply it to the debt.”

He said it was possible that the land could sell for enough money that in three years, the entire $3.4 million with 4% could be paid to the bank, and there could be some land left over free and clear for the Village to sell. It all depends on the sale prices.

The only out-of-pocket expense to the Village for the 153 acres is $45,000 which is the amount the Village will contribute to the marketing of the land. The bank also will pick up part of the cost of marketing the land.

“There’s no risk to the Village here,” said Mr. Burtch. “If the Village can’t sell part of the property, the residual reverts to the bank (as improved property, therefore worth more), and we will not owe any principle or interest on that unsold land.”

He added that the Village plans a big marketing campaign, fronted by the bank, to sell the property. This arrangement was made under a development agreement with the bank.

“This land is pretty substantial,” said Mr. Burtch. “It controls the rest of the development land [off Ann Arbor Road]. Now that the Village has the land, it will be easier to sell. Before the land was in bankruptcy and in a trust. We have one small prospect right now.”

Mr. Burtch said the bank came to the Village with this plan in mind. To the bank, the land was a non-performing debt. He said the Village has done a good job of marketing industrial development land in the past, and the bank felt the Village could do the job of selling the land better than anyone else.

“They’ll feel confident that they’ll get their money back, and the land will be put to good use,” said Mr. Burtch. “Plus, now it’s on their books as a performing debt, because they are getting a four percent return.”

Mr. Burtch added that since the state will have so much invested in the industrial park, the state also is interested in helping fill the industrial park. The state is expected to steer business Dundee’s way. And, because unsold land will revert back to the bank, it is in the best interests of the Village to sell the land.

Mr. Burtch said the Village will continue to seek clean, quiet industries. The land in question is not zoned for heavy industrial, and will be located next to a residential area.

Since the Village owns the land, it also will have more say over what goes in there, and can turn undesirable businesses away.

The Arbor Chase subdivision developers are still working with the school district in order to obtain approval of the extension of Ypsilanti Street into the subdivision. The Village has received a draft PUD (planned unit development) plan from the developers, and is waiting for its attorney to review the plan, said Mr. Burtch.

The Village Council also received more good news at the special meeting on March 26. The state has informed the Village that it will forgive a $1.3 million debt on the remainder of the Village’s share of the Cabela’s development costs, and wipe out the need for the project to create 75 new jobs.

The jobs will instead be covered by the creation of jobs by the GEMA (Global Engine Manufacturing Alliance) plant in a CDBG (Cities Development Block Grant) amendment.