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New City in the US

REI

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This is a semi-hypothetical question. If you heard that a new city was being created and you had an opportunity to invest in the city and surrounding areas, what investment strategy would you seek to take advantage of the opportunity? What business opportunities would you pursue for the short and long term?

The reason that I am asking these questions is because a small town that I grow up near is about to experience significant population growth over the next 20 years. This is a very rural area. It is estimated that about 10,000 new jobs will be created. I have put some estimates below to help understand the local area.

GROWTH PROJECTIONS:

*****************************************
Current
*****************************************
Population (City): 1000 people
Pop.: Surrounding Area: 8000 people

Blue-Collar Income: $8.50 to $15 per hour
White-Collar Income: $12 to $20 per hour

Median House Income: $29,000

Land Cost: $1100 - $1300 per acre

Restaurants 25

Hotel Rooms 1200

Apartments Units 10


*****************************************
Future
*****************************************
Population (City): 2,000 (due to new jobs)
Pop.: Surrounding Area: 30,000 people

Blue-Collar Income: $12 to $25 per hour
White-Collar Income: $18 to $30 per hour

Median House Income: $40,000

Land Cost: $2100 - $4500 per acre

Restaurants 50

Hotel Rooms 2400

Apartments Units 100

LOCAL AREA:
This area is a small town and has less than 1000 residents. 8000 residents live in surrounding small towns. These small towns are generally less than 20 miles apart. So, the total population of all the small towns is about 9,000 within a 30 radius. With 10,000 jobs expected to come to the area, the population is expected to double. Most of the jobs are expected to be blue-collar jobs such as truck drivers, freight-handlers, dock workers, and warehouse managers. Most of the jobs will be within office parks and industrial parks. Most of the people in this area live in houses or trailers on their own land. Apartments and condos are not very popular to the locals.

This town is located near a big lake and major interstates. It has tried to position itself as a vacation destination over the years but this has not created the desired growth. So, the focus is now on light manufacturing, logistics, and transportation.



BUSINESS IDEAS:
I have recommended the following business ideas to help some of the local people in anticipation of the population growth.

Small Apartments (20 units are less)
Small Self Storage (most people build additional storage in their backyard)
Home Builder (several local companies exist but more will be need to handle the growth)
Daycare Center (none exist in town)
Lawn Service
Janitorial/Cleaning Service
Mechanic Shop (no diesel shops exist)
Small Mall (1 exist but struggling to survive)
Shopping Center (1 exist and 100% occupied)
Banquet Facility (1 exist and 1 is being built)
Truck Stop (none exist near expected warehouse location)
Trailer Park (none exist)
Car Wash (1 exist)



Any ideas will be greatly appreciated.
 
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Russ H

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Mrs. BRKb

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This is a fun puzzle!

I'd be asking questions like..

What's the water source, and installation expense?

What is the town's revenue source?

Roof tops (houses) come first. Big box stores that generate sales tax have parameters on number of rooftops before they'll come to town. The town's budget funds could lag behind growth.

Same things goes for schools. You want to know that the school system can support growth, and that the town will be desireable for families with children.

As for opportunities..hmmm...

-Maybe lake front property (desireability; scarcity). (Assuming it's not already too expensive to make sense.)

-Getting options to buy raw land at some future date for x__ price, if you're the first to be foreseeing this growth.

-Studying Walmart and what their specs are for new stores. Buy the logical raw land locations, and resell to Walmart later.
 

REI

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This is a fun puzzle!

I'd be asking questions like..

What's the water source, and installation expense?

What is the town's revenue source?

Roof tops (houses) come first. Big box stores that generate sales tax have parameters on number of rooftops before they'll come to town. The town's budget funds could lag behind growth.

Same things goes for schools. You want to know that the school system can support growth, and that the town will be desireable for families with children.

As for opportunities..hmmm...

-Maybe lake front property (desireability; scarcity). (Assuming it's not already too expensive to make sense.)

-Getting options to buy raw land at some future date for x__ price, if you're the first to be foreseeing this growth.

-Studying Walmart and what their specs are for new stores. Buy the logical raw land locations, and resell to Walmart later.


Mrs. BRKb,

The infrastructure is in place such as water facilities, roads, and schools. Several of the local high schools have been consolidated into one large high school. If there is a significant number of new kids there may be a need for a new school or expansion of the current location. They are considering creating an additional water tower and exist ramp off the interstate that will go directly in to the new distribution hub. Good point.

The towns mostly receive income from interstate traffic (hotels and restaurants). Other income comes from boating, camping, and fishing. The main town where the jobs will be located promotes itself as a vacation destination. In my opinion, this has not created the desired growth.

The main Walmart that the locals visit is 30 miles away. There is only one Walmart store in the county. However, other Walmart locations in other counties are at least 25 miles away. I think researching Walmart model for selecting local communities would be beneficial.

Some investors have built condo units on the lake. These units have been selling very well. They have created 2 sites and a 3rd is under construction.

Thanks for your ideas.
 

Mrs. BRKb

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For any r.e. I'd be wondering--
-What is the entitlement process (who approves what you want to develop)?
-What's the water tap fee / sewer / electric? (thinking of the trailer park)

The town with the new jobs may or may not be the one that flourishes. A bedroom community may have issues w. paying support services (fire, police), if most of the purchases are taking place somewhere else, and another town is keeping that sales tax for its coffers.

Having multiple exit strategies from whatever you elect to do would seem like a good idea.
 
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SaraK

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I would look at it starting from this viewpoint - as growth occurs, what will the scarcest resources be? Prime land locations? Water? Are there certain pockets where the infrastructure (roads, water, sewer, electric, cable, schools, etc.) is strong and others where it is weak? What factors will determine where the growth takes hold first and strongest?

This is a very interesting thread for me because something similar is happening in the small rural town where my dad lives (where I grew up). A developer is coming in and wants to build a huge housing development (and stores and such - basically a small town of its own) out in the outskirts where my dad lives. He and other residents are fighting it because the developer wants to drill deep wells that would pump out all the water and deprive other land owners in the area of water (everyone out in that area runs off wells, it is outside of the city limits). So in that case water is the limited resource that will be a huge influencer (this town is in southern Arizona, technically a desert). It sounds like your town is somewhere where water is plentiful though, so this may not be an issue there.

Interesting thread, keep us posted!
 

howard_two

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A new city is being created:

http://en.wikipedia.org/wiki/Project_CityCenter

Quite a project.

Note: The Las Vegas Strip is OUTSIDE of the city limits of Las Vegas.

So this project really IS the creation of a city.

-Russ H.

Russ, I agree 100%. They say if you live in the City Center, you won't have to leave it. Everything will be in it. Here are some pictures taken from my own camera from the entrance of Planet Hollywood
IMG_0110.JPG


IMG_0111_thumb.jpg


Of course it's adjacent to the beautiful Bellagio
IMG_0109.JPG
 

^eagle^

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short term---land buys near the interstate. There will be a signifcant rise in restaurants and hotels, gas stations, truck washes, Fireworks and nudie bars wanting to build for the truckers.

Long term ___Small apartment buildings and retail strip malls with grocery/box store store anchors. for the day to day needs of the workers.
 
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