Council Solicits Realtors to Sell Business Parks


By Terry Rogers

On Monday, January 8, Milford City Council agreed to allow staff to create a Request for Proposal (RFP) that would solicit proposals from real estate agents to represent the City in order to promote the sale of lots in the Greater Milford Business Park and Independence Commons. The decision was related to a discussion at the December 11 Council meeting in which the vote was tabled for the City to research why commissions were not offered initially.

According to City Manager Eric Norenberg, lots in the business park sell from $100,000 to $460,000, depending on the acreage. Over the past 30 months, only one lot has been sold in Independence Commons. All funds from the sale of those lots are placed in the City’s Economic Development reserve fund that is used for capital improvement and other projects designed to improve the economic outlook in the City.

“In an effort to improve sales, it has been brought to our attention that offering a small commission to realtors might help us get those parcels sold more quickly,” Mr. Norenberg said. “Although a commission would mean less money for the public coffers, it could help us sell property faster.” Mayor Bryan Shupe said that there was currently no incentive for local realtors to sell properties in the industrial parks. He also pointed out that the commercial lots could created jobs in the City, so the land would not be for a home, but for a business that could improve economic development even further.

Councilman Doug Morrow said that, as he recalled in the original deal with the state, the land in the industrial park was given to the City with some restrictions such as how it could be sold and who it could be sold to. He thought the agreement excluded realtors. Mr. Norenberg explained that when the parks were initially placed on the market, they were selling well, so the City may not have seen a reason to offer commissions.



There are currently eight lots in Independence Commons and one in the Milford Business Park. Mr. Norenberg, along with City Clerk Terri Hudson, reviewed the agreements when the land was given to the City and found nothing that restricted the City from offering commissions to realtors in order to promote sales. City Solicitor David Rutt said that he had also reviewed his files on the matter and found nothing that prohibited the hiring of a realtor or offering of commissions.

Council was presented with three options regarding realtor commissions in the business parks. The first would offer between one and three percent commissions to a buyer’s agent. This option would cost the City between $1,000 and $3,000 per lot. One advantage to this option would be that many realtors would market the lots, but one disadvantage could be higher commissions. Councilman Archie Campbell asked Mr. Norenberg how staff came up with the percentages.

“On Option 1, we suggested a range,” Mr. Norenberg said. “The range is typically six percent on the total sale where you are hiring a realtor to represent you as the seller’s agent. The commission is then split between the buyer and seller agent. Option 1 would say we are willing to pay the commission to the buyer’s agent. We won’t have our own agent, but if a buyer’s agent brings a customer to us, we would be giving the agent a commission. This would cost us a commission per lot.”

The second option was to hire a realtor and pay commissions. In this option, the City would request proposals from realtors and either choose one to represent the City or several based on their proposed marketing plan. This would provide a realtor who would actively market the lots, feature them on MLS and promote them with buyers. By creating an RFP, the City could realize lower commissions, but there would be an additional expense of commissions to both the buyer and seller agent. Mr. Norenberg said that hiring a realtor would allow them to be more aggressive in their marketing approach.

“I think it is smart to be aggressive because these are commercial properties, so they could be creating jobs out there in our business park,” Mayor Bryan Shupe said. “Also, that money comes back into economic development. One to three percent would still bring money in and I think that is a smart thing to do.”

Council voted seven to zero for Option 2, authorizing City staff to develop an RFP to obtain proposals from local realtors in order to promote sales of lots still available in the business parks.


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