RED WING, Minn. – If you’re worried about local government’s fiscal crisis – and if you’re not, you should be; it’s why hundreds of local teachers are getting laid off, libraries closed and hours slashed – then you should read this.
I’m listening as Peter Katz, a local government official from Sarasota, Fla., shows a series of charts and graphs and talks about property taxes in Florida. In terms of land development in Florida, he says, “It’s like we’re falling off the edge of the earth. People are completely freaked out.”
So he decided to look at exactly where local property tax revenues come from. He shows bar graphs showing residential property tax revenue per acre in Sarasota County. The biggest revenues come from city residential areas.
Next he shows bar graphs showing revenue per acre for retail development. Here comes surprise No. 1. Wal-Mart/Sam’s Club development brings in only about as much, per acre, as city residential. (Think of all those acres of parking lots.) The biggest revenues come from Southgate Mall, an upscale shopping center. That’s not so surprising.
Then he shows the one that blows away the room – and this is a room of growth policy geeks, remember. He shows a bar graph on a whole different scale. In terms of property tax revenue per acre, high-rise downtown urban mixed use projects bring in more local revenue than even Southgate Mall, by what looks to my eye as a factor of about 10.
Next highest is mid-rise urban mixed use projects.
“From a fiscal standpoint this really puts hair on your chest,” Katz says to chuckles in the room.
Less than an acre of downtown high-rise mixed use urban development brings in more property tax revenue than a 21-acre Wal-Mart Supercenter, he says.
Update here, Thursday 7/1, after I get some information from Katz: He says, ” Less than an acre (.75 actually) of downtown high-rise mixed use urban development brings in more property tax revenue than a combination of the 21-acre Wal-Mart Supercenter and the 32-acre Southgate Mall, the county’s highest end commercial property with Macy’s, Dillards and Saks Fifth Avenue.
Then they looked at the payback time for the infrastructure costs for the development. The payback time (measured in property tax revenue, I believe) for the urban mixed use development was three years. Want to guess the payback time for infrastructure built for a planned mixed use development out at a highway interchange? It was a whopping 42 years.
Some disclaimers: Katz notes that they weren’t measuring sales tax, only property tax. He also notes that there’s obviously a limit on the market for high-rise mixed use projects in any downtown. And I’ll note that this posting is a real-time one, and I haven’t had time to check with Katz to ensure that I’ve totally gotten his stats correct.
Update No. 2: Katz notes that the tax analysis was done by Joe Minicozzi of Public Interest Projects, Inc., in Asheville.
(The event is a yearly conference among people affiliated with the Citistates Associates, a loose coalition of planners, economists, think-tankers, current and former elected officials, Chamber of Commerce execs, etc., who share an interest in metro region growth issues.)
He’s giving a presentation at Civic By Design, at 5:30 p.m. at the Levine Museum of the New South. Come hear how one mixed-use building in your downtown can be a much sounder investment for your municipal coffers, if you look at return on investment with a standardized measure, than even a luxury shopping mall on the edge of town.