Price sank plan for Wal-Mart siteI don't think I'm divulging confidential information in retelling this story, so ...
By Cody Lowe and Jeff Sturgeon, The Roanoke Times
Wal-Mart canceled plans for a 200,000-square-foot Clearbrook supercenter because some landowners apparently wanted more money than the project's developer would pay.
Kelly Hobbs, Wal-Mart spokeswoman, said Wednesday that Holrob Investments "and a few of the sellers couldn't come to a price." (link)
For a short time, I worked in the real estate department of a large corporation several years ago and was involved in the work that went into, among other things, looking at property leases that were coming due and making recommendations as to whether or not we wanted to re-up, renegotitate, or walk away from them. A whole mess of factors impacted the process, none of which are really important to this story.
In one particular instance, the company had entered into a long-term (either a 20 or 25 year) lease with a Japanese real estate company years before in a deal having to do with land out in northern California. That lease period was soon to expire. Because of the whole Silicon Valley thing, with property values going through the roof at the time, we knew that the asking price to renew the lease was going to be sky-high.
But it was worse than that. A representative of the company contacted me and told me that his firm had no interest in renewing at any (remotely reasonable) price. The property, he said, had been appraised at $10 million (in 1990's dollars) and his plan was to sell it and take the profits to the bank. Perfectly understandable.
But this was California.
In the course of obtaining all the necessary permissions and permits in preparation for the transfer of the property to a potential buyer and for the demolition of the existing structures there, it was determined through an environmental impact study performed by the state that some protected species of fish was thought to be dwelling in a stream that flowed across the land involved. Some minnow or something.
You can imagine the potential problems. The company was going to pave over the habitat of some endangered fish? The state said: We don't think so.
The Japanese were caught in a vice. Knowing that their efforts to sell the property would now take several years, they came back to us with a deal. We could continue to occupy the building on that site, with a substantial per-month lease payment increase (which we were willing to accept) and, once all the necessary environmental regulation hoops had been jumped through (and the stream diverted), and the company could transfer the land, we would have built for us another building on another site owned by that same company. We agreed.
Odd how these things play out.
As Wal-Mart (and I) will attest (see above), these things sometimes come together, sometimes not. But we move forward regardless.