ASSIGNMENT
Your aunt died recently and willed you 31 acres of land on State Highway 33, which connects Sun City and Parkridge, two rapidly growing communities in the Sun Belt. The property has been in your aunt’s family for over 110 years. The 31 acres are made up of two parcels on opposite sides of Highway 33. The southern parcel contains 7 acres, has a cotton mill and an old warehouse on it, and is bordered on the east by Avion Way, which comes off the highway and provides direct access to the airport. Avion Way is scheduled to be widened to four lanes, with a center boulevard, during the next year. Also, a railway line runs along the property’s southern edge. It is doubtful that the improvements are consistent with today’s highest-and-best use of the parcel. The larger parcel, which is vacant except for an old farmhouse where your aunt lived, fronts onto Highway 33 for one-quarter of a mile, and is bordered on both the eastern and western sides by public streets. Highway 33 carries a considerable amount of traffic. The parcels on it generally range in size from one-half to three acres, with mostly mixed, residential, and highway commercial uses. Within five miles are many single-family residences, apartment buildings, commercial and office buildings, medical buildings, two colleges and a state university, several churches, and a large country park. The metropolitan airport, recently expanded, is about three miles to the south, just beyond the East-West Interstate Highway. The central business district of Sun City, population 210,000 and eight miles to the east of the parcels, is undergoing a major face-lift as part of an urban renewal project. The Jackson County courthouse is in Sun City. Downtown Parkridge, population 80,000, is four miles to the west of the parcels. Of the two cities, Parkridge Downtown Parkridge,is the faster-growing. The cities are growing toward each other, for the most part. Most industrial expansion of consequence in the last two decades has been in unincorporated areas south of the interstate highway and the airport. Several high-technology firms have built plants there in recent years. Thus, the location of the parcels appears to preclude their being developed for industrial purpos Taxes on the parcels amount to about $30,000 per year, or $2,500 per month. The net income from operation of the mill has been sporadic; in fact, it is likely that the mill has been operating in the red since your aunt’s death, 18 months ago. Having just entered the work force, your income is only about $1600 per month, gross. Clearly you must make some decisions. All estate and probate problems have been resolved. Now, as the new owner, you are free to take whatever legal action you deem necessary to preserve your position and to operate the properties at a profit. Major problems you now face are as follows:
a) Not being familiar with this real estate, you need information and advice about it and how to operate it. How would you go about getting such information? Alternatives range from looking online and arranging an appointment with a broker, to engaging a marketing and planning consultant, probably at a minimum cost of several thousand dollars.
b) What steps might you take to develop some personal idea of the highest-and-best use of the property?
c) Should the costs of demolishing the existing structures enter into your thinking and planning? Under what circumstance would you not demolish any structures?
d) Could and should the 7-acre parcel be developed independently of the larger parcel? What issues might be involved in making this decision?
e) What, in your opinion, is the feasibility of preserving the building on the smaller parcel and converting it into a:
1. Neighborhood shopping center?
2. Recreational center?
3. Retirement home?
4. Public market?
5. Office complex?
6. Research complex? Give at least one reason for or against each use.
What additional information might you want before making a decision on any of these?
