Environment and Real Estate & Retail

EYE ON THE PIE: WestClay, prepare for some competition

December 5, 2005

U.S. 20 is one of our lesser-known t r a n s c o n t i n e n t a l highways. It starts at the Boston Commons, about two miles from the Green Monster of Fenway Park. The route then winds west to a few blocks from the Pacific Ocean at Newport, Ore.

U.S. 20 runs through Yellowstone National Park in Wyoming and such cities as Albany, N.Y.; Erie, Pa.; Toledo, Ohio; Rockford, Ill.; Sioux City, Iowa; Casper, Wyo.; Boise, Idaho; and Corvallis, Ore. This long route has inspired no sentimental tome, no hit songs, nor any TV series.

In Indiana, U.S. 20 enters the state about 10 miles east of Angola (Steuben County) and exits the state in Hammond (Lake County) beneath the massive steel and concrete structure joining the Indiana Toll Road with the Chicago Skyway.

U.S. 20, the story goes, is one of the reasons the toll road was built. The idea was to divert traffic off U.S. 20 and keep "those foreign trucks" out of our towns, away from our virtuous youth in Lagrange, Elkhart, Mishawaka, South Bend, Furnessville and Gary.

What, you have not heard of Furnessville, home of Smokey's and its fine offering of ribs? Well, friend, you have not been exploring Indiana's niche eateries.

But Furnessville is not being ignored. Gary Atkinson and Donna Harris have formed Dune Country Partners to develop an environmentally friendly community on 182 acres adjacent to U.S. 20. This well-conceived project in Porter County is just minutes from Lake Michigan, the Indiana Dunes National Lakeshore, and the South Shore rail line to downtown Chicago.

Atkinson and Harris want to recycle resources, honor the past, but not constrain the future. Their plans for Dunes Country include a variety of home styles and prices similar to the achievement of the Village of WestClay in Hamilton County.

In place of urban sprawl, they are attempting to build an urbane place. They have chosen land that might well become nothing more than another unimaginative subdivision in the hands of less dedicated investors. Toward this end, they have already cleared acres of intrusive, nonnative plants, developed a wastewaterreclamation and -reuse plan, and established a conservancy district.

It is easy to fall in with the enthusiasm of Atkinson and Harris and to revel in anticipation of such a marvelous development. But one must wonder if there are enough real estate investors who can see beyond today to support Dunes Country.

There is a wide belief today among "the smart people" that the real estate market, housing in particular, is "overbuilt" and ready for a fall. Homeowners are being scared into lowering their expectations about sales prices, which brings about lower sales prices.

We hear a great deal about the anticipated decline in housing starts because of higher interest rates. Those rates have been rising more than a year. Yet, for the year to date (January to October), housing starts in 2005 are 3.8 percent higher than in 2004. Building permits for single-family homes in October were 5.1 percent higher this year than in October 2004.

Nonetheless, investors seem to be drawing back from housing commitments. This reluctance damages the prospects for innovative efforts like Dunes Country. For, if there is anything an investor does not want to do, it is to put his or her money behind something bearing the four deadly descriptors: new, progressive, distinctive and unfamiliar. Sometimes it is remarkable that we make any progress at all.



Marcus taught economics more than 30 years at Indiana University and is the former director of IU's Business Research Center. His column appears weekly. To comment on this column, go to IBJ Forum at www.ibj.comor send e-mail to mortonjmarcus@yahoo.com.
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