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14-1 Property Values

The May 17, 2016 Market Impact Analysis prepared by MaRous & Company states that MaRous & Company has consulted on the proposed Allegheny Energy Center, the proposed Lackawanna Energy Center, the Oakwood Hills Energy Center, the Twin Forks Wind Farm,

RESPONSE 14-1

 

The “summary of findings” for the projects specifically included in the request in this paragraph are included below where reports have been completed.

                                                                                               

Allegheny Energy Center - The report is not yet complete. However, it does not appear that the research conducted for this proposed project will support a finding that there is any impact on residential property values by proximity to a power plant.

 

Lackawanna Energy Center - Following are the conclusions of this market impact analysis.

 

As a result of the market impact analysis undertaken, it is our opinion that the proposed power plant will not have a negative impact on the property values either in the neighborhood where it is to be located or to residential properties in the general vicinity.

 

Specifically:

  • There are significant financial benefits to the local economy and to the local taxing bodies from the development of the proposed power plant, including the creation of well-paid jobs in the area which will benefit overall market demand;

‒    There is little demand for the existing “brownfield” site for Lackawanna; however, were the site to be developed with industrial uses, negative impacts of trucks and vehicular traffic could have a greater impact on the community than those of the proposed operating power plant;

  • The proposed power plant will be one of the most efficient power plants in its class in the world, using state-of-the-art technology which will result in extremely low emissions;
  • The site is zoned for industrial use, is surrounded on three sides by an industrial park, and is compatible with the existing and planned development;
  • There already is electrical and natural gas infrastructure located in the area of the proposed plant;
  • The site property boundary is located approximately 2,211 feet from the nearest residence and is separated from the larger residential areas by the Lackawanna Valley Industrial Highway;

‒    The site is further buffered from the residential development in the area by the rolling topography and woods;

‒    An analysis of residential sales proximate to existing power plants did not support any finding that proximity to a power plant had a negative impact on property values; and

‒    None of the real estate brokers interviewed believed that proximity to a power plant adversely affected the value of the residential properties with which they were involved.

 

Oakwood Hills Energy Center - The project was cancelled; no report was completed for this project. However, as part of our preliminary consulting, we raised the following concerns:

 

  • The economic benefits to the local community were poorly defined;
  • The improvements were to be enclosed in an enormous building, with the stack at approximately 350 feet;
  • Including the appurtenant structures, the foot-print encompassed nearly the entire 11.88-acre site;
  • The level topography and lack of a buffer zone would have resulted in the plant being visible for miles;
  • The nearest residential properties were 650 feet from the property line, and at least one house was located within the 45 decibel ring.

     

Twin Forks Wind Farm - Following are the conclusions of this market impact analysis.

 

As a result of the market impact analysis undertaken, it is my opinion that the proposed wind farm will not have a negative impact on the property values in the neighborhood, nor will it impede the orderly development of the area for uses permitted in the zoning districts. Specifically:

  • There are significant financial benefits to the local economy and to the local taxing bodies from the development of the proposed wind farm;
  • The proposed wind farm will create well-paid jobs in the area which will benefit overall market demand;
  • An analysis of recent residential sales in the area of existing wind farms did not support any finding that proximity to a wind turbine had a negative impact on property values;
  • An analysis of agricultural land values in the area and in other areas of the state with wind farms did not support any finding that the agricultural land values are negatively impacted by the proximity to wind turbines;
  • Reports indicate that wind turbine leases add value to agricultural land;
  • A survey of County Assessors in all 18 Illinois counties in which wind farms are located determined that there was no market evidence to support a negative impact upon residential property values as a result of the development of and the proximity to a wind farm, and that there were no reductions in assessed valuations; and
  • There is no evidence that development of or proximity to a wind farm impedes the orderly development in the area.

     

Walnut Ridge Wind Farm - Following are the conclusions of this market impact analysis.

 

As a result of the market impact analysis undertaken, it is my opinion that the proposed wind farm will not have a negative impact on the property values in the neighborhood, nor will it impede the orderly development of the area for uses permitted in the zoning districts. Specifically:

  • The proposed use will meet or exceed all the required development and operating standards;
  • Controls are in place to insure on-going compliance;
  • There are significant financial benefits to the local economy and to the local taxing bodies from the development of the proposed wind farm;
  • The proposed wind farm will create well-paid jobs in the area which will benefit overall market demand;
  • An analysis of recent residential sales in the area of the Big Sky wind farm did not support any finding that proximity to a wind turbine had a negative impact on property values;
  • An analysis of agricultural land values in the area and in other areas of the state with wind farms did not support any finding that the agricultural land values are negatively impacted by the proximity to wind turbines;
  • Reports indicate that wind turbine leases add value to agricultural land;
  • An updated and expanded survey of County Assessors in all 18 Illinois counties in which wind farms are located determined that there was no market evidence to support a negative impact upon residential property values as a result of the development of and the proximity to a wind farm, and that there were no reductions in assessed valuations; and
  • There is no evidence that development of or proximity to a wind farm impedes the orderly development in the area.

     

Long Island Solar Farm – MaRous & Company did not perform a market impact analysis for this consulting assignment.

 

Natural-Gas-Fired Power Plants Market Impact Conclusions

 

MaRous & Company has undertaken objective analyses in all assignments, as required by USPAP. We have been unable to find any instances where a paired sales analysis supports a finding that a natural-gas-fired power plant has had a negative impact on property values. (We have not studied coal-fired power plants.)

 

Moreover, we continue to conduct research into the question of potential impact on property values. For example, I recently visited a state-of-the art Invenergy power plant located in Rock Falls, Illinois. This plant is consistent with modern manufacturing uses, with no visible smoke, and no noise at the entrance drive from the road.

 

This visit contributed to, and supported the conclusions we have drawn regarding modern natural-gas-fired power plants. We have determined that certain design elements contribute to the lack of impact: carefully chosen sites, with good topography, and adequate buffer zones; a location sufficient distance from residential uses to limit noise; the lack of visible smoke; and adequate traffic controls. 

 

Neither have we been able to find any instances where a paired sales analysis supports a finding that proximity to a wind turbine has had a negative impact on property values, once the wind farm is operational. We have not studied the transition period between the time the wind farm is proposed, is under construction, and comes on line.

 

On the other hand, we have been able to document negative impacts on property values using matched pair analyses for residential properties in proximity to quarries, waste transfer stations, and large truck distribution facilities.

 

RESPONDENT:

Mike Marous, MAI, CRE, MaRous & Company

DATE:      

August 18, 2016