When Gov. Mitch Daniels unveiled his ambitious but vague plan for an outer loop around more than half of Indianapolis, some landowners in the potential path panicked while others dreamt of a windfall.
But local experts say, until a route is more defined, neither worry nor anticipation is warranted.
“There are so many outstanding issues,” said Abbe Hohmann, a land-price expert for the local office of St. Louisbased Colliers Turley Martin Tucker.
Hohmann said two types of buyers usually drive up land prices-speculators and developers.
The route’s too uncertain to attract the former yet, she said.
The latter tries to buy land only a short time before building on it to keep down carrying costs.
“It’s too early for this to have any real impact on land values,” she said, apart from isolated cases where a seller might ask for a small premium to the going price for farmland.
If the road is built, the value of land around exits will go up while homes within view of the road might lose value, real estate observers said.
“There’s always going to be somebody who knows where the interchanges will be and will leak that to a friend who gets that land tied up,” said Nick Arterburn, first vice president in the local office of Los Angeles-based CB Richard Ellis.
A land-use expert said highways normally increase values for nearby parcels where access is improved-since more uses are competing for the same ground.
Industrial, office or apartment developers might seek out land that had been used for farming or single-family homes, said Sam Staley, director of urban land use policy for the Los Angeles-based Reason Foundation, a libertarian-leaning think tank.
But, Staley said, if a homeowner wants to stay put, the impact will be negligible unless the home has an unpleasant view of the road.
Indianapolis-based Lauth Property Group says the bypass would be a boon to Westpoint Business Park, the 550-acre industrial park it’s developing on the northeast corner of Interstate 70 and State Road 39, one interchange west of Plainfield. The new bypass is supposed to tie into I-70 close to that intersection.
“It’s a net positive for the area because it increases the ease of access to major highways,” said Tag Birge, vice president and market officer for Lauth.
“It’s just more good news for what’s already the area’s strongest submarket” for distribution projects, he said.
So far, more homeowners appear to be fretting over the road plan than viewing it as an opportunity to profit, said Kathy Hall, a real estate agent in the Greenfield office of Century 21 Realty Group-Elsbury.
“[People] are concerned about what’s going to happen to property values,” she said, “and what their rights are in regards to eminent domain,” the government’s power to acquire private property without an owner’s consent.
Hall said farmland in her area sometimes goes for $3,500 an acre, while lots for residential building range from $5,000 to $12,000, depending on location and whether they’re wooded.
If homeowners were to sell now, they wouldn’t be required to disclose the proposed road to potential buyers, said Jodi Tuttle, general counsel for the Indiana Association of Realtors.
The association advises homeowners to err on the side of over-disclosure, she said, but Indiana law requires notification of planned highways only if the landowner has received notice his property will be affected.
“With something this tentative, the landowner hasn’t received any kind of notice yet,” she said.
Pendleton Town Council President Donald Henderson said his 3,100-person burg has firsthand experience with how a major new highway can affect property values.
When Interstate 69 was built in the 1960s, farmland fetched $500 to $1,000 an acre, said Henderson, who is a farmer.
Prices didn’t rise immediately, but as residential growth pushed out from Indianapolis and Fishers via the interstate, values increased. Recently, for instance, land the town owns in an industrial park sold for $55,000 an acre.
“I would think that, without question, the bypass would add to the value,” he said.
He said some homeowners worry they’ll have to move or that sprawl will overtake their town.
But because of the town’s historic nature-it was settled in 1818 and is on the National Register of Historic Places-it already has passed ordinances to control growth, Henderson said.
“I want us to be an oasis in all this growth that is taking place around us,” he said.