Hi All,I will be making my first offer this week on a park. The park has individual septic but has the ability to connect to the city sewer with a tap fee of ~2,000 per pad (30+ pads). Obviously this will require DD on my part to make sure this is true and the other ramifications involved. If the number is accurate, how much additional cost, besides the tap fee, will I incur to get the park on city sewer. Also, how should this large, future capital expenditure program be figured into my final offer price? Should I convert 1-2-3 or more per year with excess cash flow or just wait until the septic tanks have issues and then replace on an as needed basis? Thanks in advance for your help.
Yes, check with the city to verify the numbers. There will be only 1 actual connection to the city sewer line from your park, that is the lateral line. The lateral line then goes into your park, kind of like a child’s drawing of a tree, and ‘collects’ the effluent from each pad via various branches. The 2k fee sounds reasonable, but I live in CA. You could, conceivably, connect only a part of the park each year but keep in mind that the other costs will ‘frontload’ the project. That is, to connect the first pad may cost 30k with each additional pad costing the 2k. This will be a capital project so will need to be depreciated accordingly and not expensed; talk to your account.
Talk to a local, reputable, licensed plumber who has done sewer connections previously to get firm numbers. The lateral line and branch lines MUST be installed properly or they will be forever problematic. Later, I will post under this thread how sewer lines are installed. When installed properly, they will last 50 years or more and will be problem free.
In my mind, converting a park to city sewer would raise the value of the park but I don’t know how the MHP industry handles that. Perhaps Frank or Jefferson will weigh in on that thought.
Thank you Jim that was very helpful and throws a wrench into my plan of slowly converting on an as needed basis but I agree it will increase the value of the park but not sure by how much. Since the park it is on the smaller side I wonder if the value ever fully accrues.
Doing a slow conversion might work, but you will need costs and a plan. That is, there will be frontloaded costs but it may be more manageable, affordable, and less disruptive to your tenants. Each increment in your plan, let’s say there are 3, would each be it’s own project with costs and depreciation schedules and so on. If you take a loan to do the project the lender will likely not be interested unless it is done as a single project, all done at once, and under a permit.
Also, the city may require you to remove the old septic tanks. However, I would just play dumb, which I’m good at, when I applied for a permit. Or they may be happy with just pumping out the tanks then backfilling with clean backfill. The leach fields can probably be left alone.
I would point out that once your park is on city sewer then the city bears the brunt of all future regulatory changes. They would get the headaches while you would get the peace of mind.
Can you use the lines you already have just re-route them to the new lateral line?
If youre lucky. Depends on the layout of the existing lines and where the new lines would go