Mixed-Use Downtown Development Puts Standard Malls’ Tax Yield to Shame
Friday, July 16, 2010
As local politicians across the country get scorched by voter anger over recession-induced budget cuts — laying off teachers, closing schools and libraries and slashing services — perhaps they’ll be more receptive than usual to some powerful and surprising tax revenue numbers. So what follows is about fiscal prudence as much as it is about smart city planning. Conventional wisdom, of course, says that to prop up the property tax base, a high-end shopping mall is just the ticket. But when Sarasota County, Fla., looked at where the county government gets the biggest bang for its property tax buck, it found some numbers that may surprise a lot of people. Sarasota County Director of Smart Growth Peter Katz, speaking to a meeting of Citistates Associates in Minnesota late last month, described a recent analysis of the county’s property tax revenue per acre. He pointed first to residential areas. Not surprisingly, when you work the numbers on a per-acre basis, residential property inside the county’s municipalities offered the biggest revenue per acre — a little more than $8,200 per acre for single family houses within the city of Sarasota. This makes sense, as in-town land values tend to be higher. Among retail properties, the biggest per-acre property tax revenue in his county, almost $22,000 per acre, comes from Southgate Mall, the county’s highest-end commercial property with Macy’s, Dillards and Saks Fifth Avenue department stores. That’s not so surprising. But here’s the shocker: On a horizontal bar chart Katz showed, you see that zooming to the far right side, outpacing all the retail offerings, even the regional shopping mall, is the revenue from a high-rise mixed-use project in downtown Sarasota. It sits on less than an acre and contributes a hefty $800,000 in tax per acre. (Add in city property taxes and it’s $1.2 million.) “It takes a lot of WalMarts to equal the contribution of that one mixed-use building,” Katz noted. Indeed, that three-quarters of an acre of in-town urban-style (14- to 16-story) development is worth more property tax revenue than a combination of the 21-acre WalMart Supercenter and the 32-acre Southgate Mall. Even a mid rise (up to about seven stories) mixed use building brings in $560,000, and the low rise (up to three stories with residential over retail) brings in over $70,000 per acre — more than three times the return of Southgate Mall. Katz quipped, “From a fiscal standpoint, this really puts hair on your chest.” But Katz and the group that worked with him on the tax analysis, Public Interest Projects, Inc., in Asheville (http://www.pubintproj.com/index.php), N.C., went further than just the revenue analysis. It looked at the payback time, in tax revenue, for the infrastructure costs of various types of residential developments. The payback time for a mixed-use condominium building in the heart of downtown was three years. Want to guess the payback time for the residential portion of a multi-use development out at a highway interchange? It was a whopping 42 years. Nothing involving tax revenues is simple, of course. For instance, what about sales taxes? Obviously that big WalMart and the shopping mall bring in more revenue than just property taxes. But Joe Minicozzi of Public Interest Projects notes, “Generally speaking, there isn’t a heck of a lot of return to the municipality with sales tax — at least compared to the return from property tax.” And Katz noted that while sales tax revenue can be important to the specific city or town that snags a big retail development, “At the county level such ‘fiscal zoning’ makes little sense.” Yes, Sarasota County could probably “steal” some commercial development from neighbor counties. “But we’d ultimately do far better to create value through property taxes in smart growth ‘districts,’” he said: “With a receptive mindset among citizens and elected officials, such places should be infinitely replicable; doing so may actually be easier than trying to squeeze a little more spending out of our citizens’ mostly fixed disposable income.” Potential tax revenue shouldn’t be the only factor in determining appropriate development for any community, of course — especially not flawed assumptions about which type of development brings in the healthiest tax revenue. And as Katz pointed out, there’s a limited market in most communities for intensive, mixed use development, even if NIMBY opposition were to evaporate, which isn’t likely. Still, evidence is piling up of the benefits of compact, in-town development compared with auto-centric greenfield development. With a smaller carbon footprint, it’s kinder on the environment. It’s kinder on residents’ waistlines, too, as they’re likely to walk more and drive less. And now there’s evidence it’s kinder to government coffers, as well. And that’s an attribute worth some serious attention.
Next, Katz showed the results from retail properties. Here comes surprise No. 1.: Big box stores such as WalMart and Sam’s Club, when analyzed for county property tax revenue per acre, produce barely more than a single family house; maybe $150 to $200 more a year, Katz said. (Think of all those acres of parking lots.) “That hardly seems worth all the heat that elected officials take when they approve such development,” he noted in a related, written presentation.
Peter Katz is Director, Smart Growth/Urban Planning for Sarasota County, Florida, amd was founding executive director of the Congress for the New Urbanism. For visuals on the Sarasota County study cited in the article, click here.
Mary Newsom is an associate editor and opinion writer at the Charlotte Observer, where she writes a weekly column, writes The Naked City blog atwww.marynewsom.blogspot.com, and Tweets @marynewsom.
Wednesday, July 14, 2010
Metro holds public meeting on progress of Westside subway extension
Link: http://www.scpr.org/news/2010/07/14/la-metro-holds-public-lunchtime-meeting-progress-w/
Metro holds public meeting on progress of Westside subway extension
Los Angeles County Metro officials briefed people who work in the Miracle Mile area on the status of its proposed Westside subway extension today.
Erika Esau, a librarian at the L.A. Cou
"That last leg from Western and Wilshire where we have to take the bus, it’s just impossible. And it would make it so much easier if we had the connection all the way to Fairfax at least. So I’m astonished that they’re actually making some progress."
Metro staff is drafting environmental impact studies they’ll need to qualify the subway project for federal transportation money. If all goes well, construction could begin in a year and a half. The proposed subway extension would run from Wilshire Boulevard and Western Avenue to UCLA, and possibly beyond.
L.A. County Supervisor Mark Ridley-Thomas announced he will host a community forum Friday to solicit ideas for new funding criteria for rail systems. He said that the Federal Transportation Agency’s (FTA) criteria for prioritizing federal funding leaves the county at a disadvantage.
"The Los Angeles region has lagged far behind other jurisdictions, due in part to the FTA’s historical focus on cost-effectiveness and a lack of alternative measures for prioritizing federal investments,” Ridely-Thomas said.
The FTA is reviewing its funding criteria for public rail transit projects, by considering economic and environmental criteria, as well as cost-effectiveness in its transportation funding decisions.
The meeting will be held at the Wallis Annenberg Building at the California Science Center, 700 Exposition Park Drive. Registration begins at 8:00 a.m.
http://www.scpr.org/news/2010/07/14/la-metro-holds-public-lunchtime-meeting-progress-w/
"That last leg from Western and Wilshire where we have to take the bus, it’s just impossible. And it would make it so much easier if we had the connection all the way to Fairfax at least. So I’m astonished that they’re actually making some progress."
Metro staff is drafting environmental impact studies they’ll need to qualify the subway project for federal transportation money. If all goes well, construction could begin in a year and a half. The proposed subway extension would run from Wilshire Boulevard and Western Avenue to UCLA, and possibly beyond.
L.A. County Supervisor Mark Ridley-Thomas announced he will host a community forum Friday to solicit ideas for new funding criteria for rail systems. He said that the Federal Transportation Agency’s (FTA) criteria for prioritizing federal funding leaves the county at a disadvantage.
"The Los Angeles region has lagged far behind other jurisdictions, due in part to the FTA’s historical focus on cost-effectiveness and a lack of alternative measures for prioritizing federal investments,” Ridely-Thomas said.
The FTA is reviewing its funding criteria for public rail transit projects, by considering economic and environmental criteria, as well as cost-effectiveness in its transportation funding decisions.
The meeting will be held at the Wallis Annenberg Building at the California Science Center, 700 Exposition Park Drive. Registration begins at 8:00 a.m.
Blue Ribbon Committee: Metro Should Focus on the Lines People Use (Source: la.streetsblog.org)
Blue Ribbon Committee: Metro Should Focus on the Lines People Use
Supporting dense neighborhoods and rail lines were two things that the panel wants Metro to focus on. Photo: Salaam Allah Westcoast Transit Photography KING!/FlickrSix months ago, Metro officials convened a Blue Ribbon Committee to provide a strategy for the transit agency to keep its operating budget under control as escalating costs, declining revenue and cuts in subsidies continue to play havoc with their projections. This Thursday, the Metro Board's Operations Committee (it's item #4) will vote on whether or not to send the recommendations to the Metro Board of Directors to guide Metro's policies moving forward.
So what does the Blue Ribbon Committee recommend? Basically, that Metro should focus on the service that people use the most. Daily and weekend service along major corridors and dense areas should be the primary focus, with a secondary focus on late night service. Owl service is put way on the back burner.
The committee also refers to rail as the future backbone of the transit system and encourages a greater level of connectivity between the bus system and the expanding rail system. More localized service is placed on the back burner as the committee urges Metro to focus on more frequent service every half-mile to a mile.
A lot of this might seen like common sense to Metro watchers, but the recommendations are sure to rankle the Bus Rider's Union and their supporters who will object to cuts to non-commuter hour trips and the emphasis on rail. Combined with a Long Range Plan that calls for a predictable schedule for fare increases, this outline is sort of a worst-case scenario for an organization focused on cheap and plentiful bus service. The BRU would argue that while Metro may have to tighten its organizational belt in the future, they should be cutting back on rail service not making it the backbone of the transit system,
There are also many suggestions that won't be controversial, such as ones to better coordinate with local municipal service and another to optimize use of the TAP system. If you have a chance, check out the entire report on the Operations Committee Agenda. If adopted by the full Board next week, it could guide Metro as it grows, shrinks and adapts in the coming years.
Tuesday, July 13, 2010
Crews test soil for light rail (Source: Santa Monica Daily Press)
Link: http://www.smdp.com/Articles-c-2010-07-12-69954.113116_Crews_test_soil_for_light_rail.html#222
Crews test soil for light rail
July 13, 2010
CITYWIDE — As part of Phase 2 of constructing the Exposition Light Rail Transit Line, workers will be conducting field investigations of the soil along the line’s route through July 20.
The route, called the Exposition Right-of-Way, constitutes the following locations: 50 feet west of Cloverfield Boulevard, 50 feet west of Centinela Avenue, 50 feet west of Bundy Drive, 50 feet east of Pico Boulevard and 50 feet west of Sepulveda Boulevard. Work in Santa Monica will occur between 8 a.m. and 6 p.m.
The Exposition Construction Authority Board of Directors certified the Final Environmental Impact Report on Feb. 4, allowing for construction of Phase 2 of the Expo Line project to begin. Phase 1 of construction will bring the Expo Line from Downtown Los Angeles to Culver City and is expected to be completed later this year.
Phase 2 will extend the line from Culver City to Santa Monica. The field tests are the first step in construction. Revenue service is expected to begin in 2015.
The field tests are being done by the consultant Leighton Consulting Inc. on behalf of the Metro Board of Directors with the purpose of collecting soil samples and documenting subsurface conditions.
Soil will be collected by a truck-mounted drill rig, which makes noise comparable to a garbage truck. The noise will not be continuous.
The drilling is not expected to produce dust, but the air will be continuously monitored. The soil will be sealed in containers and taken away from the site each day.
Because of the work, businesses and tenants along the route had to coordinate access to their buildings prior to the work beginning.
For questions regarding the field work, contact Gaby Collins at (213) 243-5535 or gcollins@exporail.net.
news@smdp.com
What about a new Transportation Policy President Obama?
Link: http://www.railpac.org/2010/07/12/what-about-a-new-transportation-policy-president-obama/
What about a new Transportation Policy President Obama? July 12th, 2010
Editorial by Noel T. Braymer
In the aftermath of the BP Oil gusher in the Gulf of Mexico, now in its 3rd month the President is talking about a new Energy Policy. President Obama is calling for less dependence on oil. But every President since 1974 starting with President Nixon has called for energy independence and decried this country’s dependence on oil. What is needed to make this time different? When you talk about oil, you have to talk about transportation. This county consumes 25% of the world’s oil production. Two thirds of the oil consumed in this Country is used for transportation and of that 45 percent alone is for gasoline.
The most energy efficient form of transportation on land is rail. Siemens advertises that their 220 mile an hour passenger trains get the equivalent of 700 miles to the gallon per passenger. According to CSX one freight train can pull 280 trucks off of our congested highways. Trains are 3 times more energy efficient than trucks and carry a ton of freight 436 miles on a gallon of fuel. One nicer thing about trains is that you don’t have to run them on oil. The BNSF is cooperating with Passenger High Speed Rail projects in part to improve their tracks and run their railroad more efficiently .Clearly BNSF wouldn’t be interested in improved passenger service if they didn’t see a possible economic advantage for them. BNSF’s policies must have impressed Billionaire investor Warren Buffet because he bought the railroad.
There is another problem this county needs to deal with: jobs. Over 70 percent of the economy is consumer spending. People can’t spend money if they don’t have jobs and to sustain jobs work has to be productive. Spending money to improve the railroads to carry more passengers and freight is a good investment in the future and will create jobs in this county now and in the future. We also need to expand and run good rail services so that passengers and shippers will use the rails. High Speed Rail projects are clearly exciting. There are many places where we can run trains very fast in the open country where construction costs will be reasonable. High Speed Trains can be used to connect major airports and replace most of the often uneconomical short haul air traffic while improving air service to many smaller cities. But we need to concentrate spending money to build as many miles of improved trackage as possible first. Just a few expensive projects can suck up most available funding. Just in Southern California there is a long backlog of projects that have been “shovel ready “for years. Some good examples of this is the need to double track most of the railroad in San Diego County, build four tracks between Fullerton and Los Angeles, triple track between Los Angeles and Burbank and double track most the railroad between Burbank and Oxnard.
Now there is the question: how do we pay for this? More and more pundits talk about how we are so deep in debt we have to pay our off debt first. The problem with that argument is it ignores the fact that you can’t pay bills unless you are working. We have to make more money first before we can pay off old debts. Throughout history most nations get into ruinous debt from military spending, particularly from wars. The United States has been in debt for most of its history since the Revolutionary War. The United States had a much larger debt relative to the Gross Domestic Product after World War II than today. The United States also had much higher tax rates during and after World War II than today. Yet this period between 1941 and 1970 had the fastest growing economy than any period in American history. If we spend more money on improved rail service we can have a better economy. If we reduce our dependence on oil our National Security will be stronger than spending money to keep over 900 bases overseas.
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