Friday, January 8, 2010
Future Farming in Detroit or Spectacular Speculation?
Hantz Farms plans to grow natural, local, fresh and safe fruits and vegetables to help meet Michigan's increasing demand for locally grown produce. In addition to food and trees, Hantz Farms will harvest wind energy and utilize geothermal heat and biomass fuel from recycling compost...... [the business plan calls] for the deployment of the latest in farm technology, from compost-heated greenhouses to hydroponic (water only, no soil) and aeroponic (air only) growing systems designed to maximize productivity in cramped settings.
Sounds lovely, if a bit more than necessary to start a farm. But what is the real business plan? David Whitford of Fortune Magazine writes about Hantz's "revelation":
"We need scarcity," he thought to himself as he drove past block after unoccupied block. "We can't create opportunities, but we can create scarcity." And that, he says one afternoon in his living room between puffs on an expensive cigar, "is how I got onto this idea of the farm."
In other words, there is too much land lying around doing nothing, making it worth almost nothing. If you are in the real estate business, you like scarcity, it drives up prices. Right now he can buy formerly residential land (less toxic than industrial) for $3,000 per acre, and is looking for lower tax rates and contributions of free tax delinquent land. That is the same per acre as a farm in the country. Smack in the middle of a city. Whitford notes that some of the biggest skeptics are the people already farming in Detroit.
Perhaps I spent too much time with developers and real estate people in my architectural career, but Hartz has said it all in Fortune, from his first comment about sopping up excess land and creating scarcity to his last quote about buying a penthouse in New York. This sure sounds like a classic real estate play to me. But if it takes unused land in a temperate part of the country with lots of water and people who need jobs, and grows local and healthy food, go for it. That's the American way and it works.