Post-Visit Comments

[Manning]

I attended along with perhaps 11 others MIPC's Oct visit to Salemi. I went there prepared to write off my MIPC Premium Membership Fee / Registration, the cost of the flight to/from Dubai, accomodation, and loss of week's pay. If nothing else, I got a nice short vacation in a very nice part of Italy, my first time to Sicily. My sole objective was to see what was there, get a feel for the town & area, and get a break from work and on that basis, the trip was a success. David (with assistance from his brother, Simon) did a great job of taking care of us, assisting in sheparding us to/from the airport, around town, walking the town, translating, organizing meals, the benefit of their knowledge, etc. I personally felt I got value for money.
Unfortunately we were not able to specifically identify Euro 1 Houses. Such a map is still in process with the Council but we did see the area to the SE and South of the center that contains what is probably the bulk of the units. MIPC hopes to have a finalized map for the trip in early 09. I would deem it a requirement.
Salemi is a nice hill top town but short of the best in Italy. It has great connnections to 2 international airports, Trapani & Palermo, 25 & 35 minutes away by car. Nice views to east across to west. Typical meandering narrow, very narrow streets, etc. Nice sense of place but could use exactly what the Council is trying to provide, more people and sustainability. Very inexpensive as to food and beverage. And the food was great, the produce stunning, the selection of aperitifs bewildering. Salemi has potential; it is not Tuscany but may well become the next one.
I am a project director for a very large mixed-use development in Dubai but started my career as a carpenter, so I brought a slightly different set of eyes to the Visit than perhaps most of the others. However, like most on that tour, I hope to end up with a nice vacation / retirement house, cashed out of pocket, and the Euro 1 offer was hopefully going to do that for us / me. Unfortunately, I was not favorably impressed with what I think were the units on offer. Most would seem to be very small plots with lots of rubble on top. Perhaps the Council is combining small plots into more reasonable ones? Due to lack of a map identifying which units qualified, we guessed and at this point in time, I await further information and developments by the Council before I decide whether or not to follow through. No sense falling love with one unit without knowing if it is one and is so, how they will be allocated either.
Several of us did tour some units for sale with an agent (not MIPC) wishing to get some comparables. As a result of that effort, I did find a piece of property worth pursuing and have engaged MIPC to a 2 stage due diligence prior to my extending an offer. So obviously I found something I like and feel is worth expending some time and effort on.

[mipc]

Manning,
Apologies for addressing you with your username. Thankyou for your sincerity regarding your feedback about the MIPC Discovering Salemi trip.
When the council has finished mapping the properties and forwarded it to MIPC for distribution, we will of course circulate this to everyone.

If you too went on the Discovering Salemi trip please feel free to post your comments.
Did you think it was good value for money ?
Ciao David.

[Manning]

Some additional comments & thoughts;
Generally, Salemi appeared to be rather depressed. We saw many buildings for sale, many other buildings appeared to be unoccupied and many projects under new construction or renovation were halted, some for what appeared to be several years. In contrast, following the official visit, a few of us visited Erice, a beautiful hilltop town above Trapani, which is in the best of the tradition. We saw not a single for sale sign (albeit it was a much abbreviated visit so maybe we were simply on the wrong streets). However a depressed real estate situation is an opportunity, a great one if your objective is a low cost entry into Mediterranean / Italian property and you are simply looking for a second / vacation home.
During the visit, several of us went out looking for comparables and inspected homes for sale using local real estate agents. We were shown a couple of 4 & 5 floor fixer uppers of about 70-80m2 per level. Typical arrangement was garage, storage & entry on one GF, kitchen, 2 rooms & bath on upper GF but entry on opposite side of building, 2 rooms, bath & kitchen on the other floors, and roof terrace. The units could be either single occupant or split into rentals. Renovation costs would not be too much, just bit of wiring, finishes and new kitchens / baths, and done at a floor at a time paid out of cash flow. These units ran in the Euro40 to 50k asking price range which seemed pretty reasonable. I would expect that 20 to 40% discounts from asking would be possible. On the top end, we toured a larger villa with 4 levels and able to be split into main 2 level apartment with 2 or 4 smaller ones above. The reno was well done but was only 90% complete with asking price Euro260k with 20k refund or allowance for the incomplete bits (doors, cabinets).
We did not get any information on the rental market but it can’t be a landlords’ market given the quantity of vacant housing. As a source of income, I would not count of rentals to locals but maybe tenants can be sourced from your home country, especially if for short term and vacations.
So if your interest is a second home that you can fix up out of cash flow, Salemi is probably a good candidate. Does Salemi offer more than any other Mediterranean locale as Hugo inquires elsewhere in this blog? From an entry point of view, if price appreciation is not a main short or even mid-term goal and with or without the Euro1 offer, it would appear so.
However if your interest is for a larger project that generates employment or depends upon tourism and/or local customers, I would say that there is a lot of careful study required your end. There are at least 2 existing B&Bs and I would imagine that they heavily depend upon the late summer season to make it through the year. One was spotted in the old section and had undergone a recent renovation. It would be worth knocking on the door and speaking with the owners. In the hotel we stayed in, if it were not for the MIPC group, I believe that the hotel would have been otherwise empty.
There were surprisingly few restaurants around Salemi. Whether that is a result of local eating habits or lack of initiative or what, I don’t know. The one restaurant we favored was well attended by the locals on week nights however. Same comment goes for bars, not many and they were very much along the line of a more typical Italian café with few tables, no formal bar counter, with some sweets, sandwiches, coffee, beer and alcohol.
The teenagers came out in force at night and apparently have no place but the sidewalks, especially those next to ice cream parlors. I would guess that some sort of game / youth center might go over well.
A cooking school would likely do well assuming one can identify and lock down the students. The local produce looked fantastic. No doubt there are small farmers that make their own special brand of cheese, sausage, whatever. The school would not depend too much upon tourism as it becomes the destination in itself.
In the above mentioned Erice, we noticed that many shops were showcasing and selling local product such as honey, aperitif, olives, jam, ceramics and nicknacks. Nothing of the sort was seen in Salemi and perhaps therein lays an opportunity, especially if export to your home country can become part of a small retail outlet.
Businesses of these natures likely need much more support from the local government. Simply offering problematic sites / buildings for Euro1 is probably not enough; too much risk on the revenue side. As a minimum, data on tourist visits, local produce and coops, tax holidays, employment figures, etc. should be prepared and provided. If the Council is serious about turning Salemi around, they should really embrace and encourage these individuals and if it were me, I would not be shy about pressing for incentives.
For the Euro1 offering (if in fact it remains as such) I would strongly recommend before committing to completion within any deadline, you inspect the unit you are assigned. In addition, if the offer ends up being an auction as has been suggested, I would not put forward a bid without first inspecting the specific units with a structural engineer (unless you are prepared to walk away from the bid funds).
As I mentioned in another thread, during the visit, we were unfortunately unable to identify properties that are included in the offer; we could only make assumptions. As a result, in my mind, the jury is still out on the Euro 1 offer.
The nature of development is to start with little information, maybe just a dream or idea, gather more data through a formal process, identify risks, mitigate those you can, assign the remaining risk to those entities best suited to manage it to a successful conclusion. One also has to step back, take a hard cold look at the knowns and unknowns as any of several go/no go decision points before proceeding to the next phase. At this point in time, not a lot of personal resources are at risk by any one of us (registration fees with MIPC, a short working vacation to Salemi, some time on the computer, etc.) but at some time those resources will be expected to be increased.
Lastly, there may or may not be validity in the Euro1 offer, time will tell, but I came away from the visit willing to pursue Salemi a bit longer as a place to establish a second home. However, if I were asked, given what I know today and with some confidence, be willing to bet that it will not be via the Euro1 offer but via one of the incomplete projects for sale and taking advantage of the other governmental incentives in place for the revitalization of Salemi.