aknowledgeableperson wrote:How long do you expect most owners to sit on a building that is producing little to no income and at the same time you have to pay for taxes on the building plus utilities, insurance, maintenance, and so on? At the same time there are other nearby properties nearby in the same shape. In other words it is a money losing piece of property with no end in sight. I do have an option. I can demolish the building, pave the land, and open a parking lot and now the money losing piece of property is now producing a profit for me.
Point is, value isn't absolute. And you're assuming a lot of things in that statement. Not all surface parking is an expression of market forces because the risk is to a property owner is nil if you overestimate parking demand and only make a fraction of what you expected. Unless you really did something dumb, you'll eventually make money on the parking lots.
aknowledgeableperson wrote:So, yes, the building has less value than a parking lot. If the demand returns for that lot to be used as a building site I or someone else I sell the property to can build to meet that demand, probably in less time, and maybe cost, than it would take to rehab the older structure.
Bullshit. New buildings take an enormous amount of time and capital. Old commercial buildings can offer an easy path back for a neighborhood because the cost to get a small business or whatever in there can be very low. No way that places like the Crossroads happen if someone had paved it over and we were sitting around waiting on the market to decide it's worthwhile to build there again.
IMO you're also overestimating the willingness of a surface lot owner to sell. If you owned a surface lot in a redeveloping neighborhood, would you sell the lot or rake in every dollar that you could, for as long as you could? I know what I'd do. It makes more sense to hold the lot for as long as possible, let scarcity drive the asking price up, and be one of the last properties to sell to a developer.
aknowledgeableperson wrote:Look at the surface lots around the baseball field. Doubtful those were there with the old Tiger Stadium, especially since the old stadium wasn't in the neighborhood of the new stadium.
Google Earth only goes back to 1999, but all of the parking around Comerica and Ford Field now is there then. The steel for Comerica is barely out of the ground. There's no Ford Field at all. It's not definitive because we can't get back to before stadium construction, but the lots already have stripes and worn paths in the drive aisles. They don't look new. What's striking is how little has changed in that area besides those two buildings.