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wooly1

Real estate/development question

Question

wooly1

I own 4 acres of land abutting 30+ acres bought by a developer. We are township land surrounded by city land. they want to be annexed. The city says one annex all annex (meaning me too). If I don't agree it probably won't happen.

Do I agree solely due to increased value? Or is it reasonable to request payment from my neighbor to go along with annexation and higher taxes.

It should be mentioned the former owners offered me mid-five figures to go along with annexation so they could get a better price for their land. Long story short they sold as "as good as annexed" to the developer, and I got nothing because annexation didn't go through before the sale.

Opinions please.

I would like to get something to cover expenses until it is developed where I can realize some profit.

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Dozer

Should have taken the money while you had the chance IMO.

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wooly1

Didn't have the chance. It was structured to pay upon annexation. Annexation hasn't happened yet and now there is a different owner.

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Dozer

I dont really know how all that stuff works but doesnt sound good for you! Good luck getting any $ out of anybody!!

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wooly1

Dozer,

I still have the land which is increasing in value due to the development next door. So the only time I have lost out was how the previous agreement was structured. That would have been "found money".

My question is rather simple to someone who is in the development or real estate biz, can I /should I request compensation from the developer, who wants annexation, for being annexed when I will have to pay more taxes (30%) after being annexed?

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Jackpine Rob

Get all the money you can get as quickly as you can get it. Annexation can be a nasty deal - and most of us who have been annexed over the years had nothing to say about it. We just have the joy of paying higher taxes.

If you have a card to play, do so immediately.

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Dozer

 Originally Posted By: Jackpine Rob
Get all the money you can get as quickly as you can get it. Annexation can be a nasty deal - and most of us who have been annexed over the years had nothing to say about it. We just have the joy of paying higher taxes.

If you have a card to play, do so immediately.

Thats exactly waht I am trying to say. There is nothing you can do about it and you are screwed. I really dont think the developer is going to care what you want and isnt going to give you one cent no matter what you think or say. Good Luck

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IFallsRon

Sadly, you're being squeezed out. Annexation equals assessments and higher taxes.

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sparcebag

 Originally Posted By: wooly1
I own 4 acres of land abutting 30+ acres bought by a developer. We are township land surrounded by city land. they want to be annexed. The city says one annex all annex (meaning me too). If I don't agree it probably won't happen.

Do I agree solely due to increased value? Or is it reasonable to request payment from my neighbor to go along with annexation and higher taxes.

It should be mentioned the former owners offered me mid-five figures to go along with annexation so they could get a better price for their land. Long story short they sold as "as good as annexed" to the developer, and I got nothing because annexation didn't go through before the sale.

Opinions please.

I would like to get something to cover expenses until it is developed where I can realize some profit.

I'd talk to the new developer explain your past deal,try to deal saying you will go along with annexation for---$.*If not you'll oppose it.The city can force you in to annexation,and being surounded by city it WILL happen..BUT WHEN.Put it in front of the developer the way you did us.See what happens.

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EJ

If they can't annex without your approval, then you have a lot of leverage and still ask for compensation.

I am working on a similar situation right now where a dvelopment is being held up because a neighbor will not sign off on a street where he currently has a non-exclusive easement for a shared gravel drive.

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lawdog

Is this land you want to retain? The developer may pay a huge premium to gain the extra acres and control over the annexation issue. Sell it to him at a huge profit if you don't need it. All kinds of people have gotten filthy rich just by having land in the right place at the right time when someone really wants/needs it for something else. Why not join them?

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rainylakefisher

Generally annexation cannot occur by 'leap frogging' over parcels. The City limits must be contiguous although that doesn't necessarily keep them from doing an 'end around' by just skirting the property while maintaining continuity to the current City limits.

I am a development consultant and deal with issues like this frequently. My general advice to landowners is that you don't want to be the first to sell, but you really don't want to be the last and left out in the cold. I'll find a way to work around you and it usually hurts you worse than the client. Playing ball, up to a point, is usually the best option.

Disclaimer: As mentioned, there are times when you truly have someone over a barrel and then the developer might pay large money to make you go away. It all depends on how big a deal it is and whether the other units can support the money being paid out.

Landowners have unrealistic expectations of value right now because they've heard numbers much higher than possible at this time given the current market coniditions. Hang onto your land for a while ... there aren't that many people willing to buy raw land when they can buy finished or 'entitled' lots at steep discounts.

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wooly1

Thanks sparcebag,

That is the direction I was leaning but needed to hear I wasn't off base. Annexation will happen at some point in the near term. Their land would have better value with city water and sewer. It is near downtown and schools so it would be idiotic for it to remain as is.

City allowable density would be greater than township creating more value.

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wooly1

EJ,

Annexation will be a slam dunk with my cooperation. Without they may lose another year on developing.

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wooly1

lawdog,

I intend to...at the best and most profitable time. But when is that time? Before dirt is pushed, After annexation or before?

Once phase one is done?

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wooly1

Thanks rainy,

I am not looking to retire on the money my 4 acres will bring but reasonable windfall is what I seek.

I do not have anyone over a barrel, my acreages is in the corner.

The land has not been leap frogged. It is an island of township surrounded by city, developed and undeveloped.

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