August 7, 2013 EditionAlso in this issue...
NEARIFA holds site class
As the Northeast Arkansas Regional Intermodal Facilities Authority (NEARIFA) continues to work with various governmental entities to locate potential prospects for their sites in Pocahontas, Walnut Ridge, Hoxie and Corning, members went back to class this past week to learn how to be more specific in their search and how to better market their sites to the outside world.
At Thursday's meeting of the NEARIFA Board of Directors, Steve Jones, building and site coordinator with Arkansas Economic Development Commission (AEDC), held a two-hour site class for the board designed to provide the NEARIFA with the knowledge necessary to create a quality product and expand the opportunities for a community, or in the case of the NEARIFA, a three-county area.
"The size, type and location of a community's site," Jones said, "should be determined by the community's growth patterns and strategic plan." He also said each community or region needs to customize the local sites to fit its own needs and to know what they want. "Who are you marketing to?" Jones continued.
"What are the strengths and weaknesses of your site, community and region?"
Jones also discussed land and property with the NEARIFA Board. He pointed out that pricing property can often be a very difficult thing to do.
"The community needs to cover expenses and make a profit if possible," Jones said. "But the profit may not be realized by the price of the land. The jobs and the good of the community may outweigh making money on the land transaction. In some instances, giving a good prospect the land may be the incentive that closes the deal."
Jones added the cost of the land is not the problem; it is the cost of developed property. Giving an example he said, "The community or region must ask itself, if a developed site costs $8,000 an acre and an undeveloped site costs $1,500 an acre, which is the better deal?" Jones said if you factor in adding utilities and road extensions to the property, the price of the undeveloped property may end up costing more than the developed site.
"You have to consider several factors," Jones said, "including the price of the land, utility extensions, transportation extensions, interest, profit and the price of comparable developments in the region." Jones said if property is priced high because of development costs, another parcel of land should be considered.
"It does not make sense," Jones continued, "to develop a site that will cost three or four times the amount of what other comparable sites are selling for."
He said one of the pitfalls cities and organizations like the NEARIFA often make is not buying enough land. "When a community develops its site," Jones pointed out, "it increases the value of the surrounding property, often making the price out of reach for future purchase." He said a site is only a tool, and if you do not use the tool, it is a wasted effort.
"Only communities," Jones said, "that are prepared to actively market their community and property should consider taking on the responsibility of developing property."
Jones also touched on a variety of other subjects in the session, including common mistakes made by communities, including purchasing land that is unusable. He discussed the pros and cons of spec buildings and their role in recruiting industry.
Another point he hammered home is when working with an unnamed prospect, or learning that a prospect is looking at the community, to respect their privacy. "Companies are serious about privacy," Jones said. "They will let you know when they want you to know who they are."
Jones also pointed out the importance of not ignoring existing industries in the community, and that communities and Intermodal Authorities should be constantly trying to meet their needs, as well.
Following Jones's presentation, NEARIFA Executive Director Wayne Gearhart told the board there continues to be inquiries and interest in all of the sites in the three-county area, and he is working with the communities to promote their sites.
The next meeting of the NEARIFA Board of Directors will be Thursday, Aug. 22, in Pocahontas.