The first principle of good real estate investment is location, location, location. For years, homes in the 46802 ZIP code, near the abandoned General Electric buildings, have had some of the lowest values in Allen County.
Vacant, deteriorating commercial property is a detriment to residential home values. Those who claim concern over investing $65 million of local public funds in Electric Works fail to understand this investment is low risk with some of the highest potential for return in multiple avenues. The first return on investment is increasing home values in surrounding neighborhoods.
The National Association of Realtors is excellent at providing data for economic advisers. Data on the 46802 ZIP code and Electric Works have garnered the attention of economists in The Wall Street Journal, Huffington Post and Indiana Business Journal. Allen County and the city of Fort Wayne need to recognize these economic indicators and make the commitment to invest the necessary local funds as a core component of Allen County economic development.
Here are the facts on residential home values in the 46802 ZIP code:
• In December 2015, the year-to-date median sales price for residential property was $37,500. In December 2016, the year-to-date median sales price increased to $50,000. Granted, this increase was also attributed to post-recession recovery. However, no other ZIP code increased in value as dramatically.
When discussions of the Electric Works campus began in 2015, the 46802 market saw values change by what is called the anticipatory market. Sales were sparked by the clear vision and excitement about rejuvenation of the historic GE site, a vision that embraces our past and provides an innovative future of mixed-use development. By the fourth quarter of 2017, the year-to-date median sales price in the 46802 ZIP code jumped to $93,950. Keep in mind, this is still one of the most affordable housing markets in the country. Not just the city – the country!
• Presently, the year-to-date residential median sales price for 46802 is $138,000. Name another location in Indiana that has more than tripled in value since 2015.
• The property tax cap is 1 percent of assessed value for owner-occupied residential real estate and 2 percent of assessed value for investment properties. Increasing residential values are already increasing tax revenue, even before renovations begin at the Electric Works campus.
A respected business mentor told me long ago that the best investment is to invest in yourself so that you will always be of value to those around you. The state of Indiana has committed to invest in our community, and so has the federal government. Private investors are ready to infuse capital into our community. It is time for city and county officials to commit $65 million in local public funds to the Electric Works campus renovation.
Failure to do so means we are telling the state to spend the $50 million designated for Fort Wayne in a different city. It tells the state and private investors that we don't value our community enough to invest in ourselves. The old GE site cannot sit as it is. The choice is to let the buildings and our future deteriorate or to renovate and build our future.
Some would lead the public to believe there are not enough funds for other local projects if $65 million is spent on Electric Works. One of the most important aspects to understand about committing the $65 million in public funds is that those funds will not be spent until leases are secured, minimizing the risk to taxpayers.
Yes, there are still financial risks as there are in any development project. However, few projects offer as little financial risk to the public as Electric Works. The TinCaps stadium was far more risky financially, but Fort Wayne made it a great success.
May it be so with Electric Works.
Beth Goldsmith is a Fort Wayne Realtor and a board member for Greater Fort Wayne Inc.