The Milan News-Leader
A Heritage Newspaper
Weekly Publication
Real estate firm wins city bid
Southfield company will list the transit building on the market
By Brian Cox, Staff Writer
PUBLISHED: February 1, 2007
The Milan City Council took another step toward selling the Milan Public Transit building last week when it entered into a six-month contract with a Southfield-based commercial real estate firm to act as broker for the property.
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The council voted 6-1 to appoint Signature Associates as the broker for the 10,000-square-foot facility. Also in contention for the contract was Real Estate One, represented by local realtor Barbara Gaines and a colleague, Michael Rhoade, who specializes in commercial real estate.
The two real estate agencies made their pitches at a council meeting Jan. 22 in response to a request for proposal.
Rhoade recommended the council consider a five-year lease-back plan in which an investor would purchase the building and the city would lease it back at approximately $6,000 a month.
"I don't think within the box," said Rhoade. "I think about how I can get the best for my sellers."
He estimated selling the building could take as long as two years whereas a lease-back agreement could take only six months.
"I'm not warning you it's a bad time to sell," said Rhoade, "I'm telling you it's a bad time to sell."
Signature Associates representative Keenan Fields said his company was the region's largest commercial real estate firm.
"This is the kind of property I sell," he said, adding he exclusively worked with commercial property and has been "entrenched" in the Dundee market recently.
The transit building was unique, he said, and would appeal to particular businesses such as other transportation companies.
"You have to target somebody who would use the property, and we have the tentacles to get out there and find them," he said.
In selecting Signature Associates, council members expressed confidence in the firm but also some regret for not working with the local company.
"I'm torn between wanting the local flavor and appreciating Signature's focus on commercial property," said Councilman Tim Gibelyou.
"We'd all like to deal with a local Realtor," said Councilman Doug Gilson, "but in light that it is a commercial property, I have to go with Signature."
Only Councilman Michael Armitage opposed selecting Signature Associates.
"I put a lot of weight in doing business with local companies," he said.
The six-month contract provides Signature Associates a 6 percent commission on the sale.
The city is looking to sell the building as a way to shore up funds to help make next year's bond payment on the wastewater treatment plant. The building cost about $750,000 and was constructed with funds borrowed from the $13.6 million wastewater treatment plant expansion bonds.
The plan at the time was to pay the money back using a grant from the Michigan Department of Transportation, but the state claims no grant application was submitted, leaving the city with an unexpected debt of $750,000.
Both real estate agents estimated the building could bring anywhere from $600,000 to $900,000.
"We're trying to cut our losses," said Councilwoman Martha Churchill.
Staff Writer Brian Cox can be reached at 429-7380 or bcox@heritage.com.
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