Follow-up to interview with urban planner Joseph Minicozzi...

I hope that you were able to catch yesterday's (12/20) High Noon in Lake Worth episode. After the show, Joe and I had an e-mail exchange which dealt with the efficiency of redevelopment in urban areas, compared to large lot suburban development. During the show, we talked about this concept and he referred to these two images he provided that demonstrate this effect. Joe works for a for-profit development company in Asheville, North Carolina called Public Interest Projects, Inc.

This compares the tax contribution per acre of an Asheville, large lot, big box development outside of the downtown area to the redevelopment of a six story building in downtown Ashville. Yes, six stories, can you imagine? In fact, Joe says during the show that there really is not a significant difference between 45 feet and 65 feet. The most important aspect of a project is the design and that responsibility lies with architects. Of all the aspects of a project, the most important part of the design is how the building interacts with the street. Height should not be the paramount concern.

Back to the graphic above. The six story building, a former J.C. Penney's, has retail on the first floor, office space on the second floor and residential on the upper four stories. It sits on 2/10 of an acre, whereas the Walmart sits on 34 acres. Looking at the chart, you can see how efficient the primarily residential mixed-use development is in the amount of tax revenue created on a per acre basis. Minicozzi says add the fact that a Walmart is built to last 15 years and you have to ask yourself what is going to happen to that property in year 16. Will it become a big "dark box" that seem to be popping up all over the nation? What re-use is possible with this sort of land use? 

Compare that with the six story building downtown which clearly has a longer life than the Walmart. Not only does it generate more tax dollars per acre, it's economic return to the community can continue farther into the future. At 90 residents per acre, probably 45 units an acre of allowable density, it represents a housing type where there is a walkable environment that residents can satisfy their basic retail and entertainment in the downtown area. This can be done without getting in their car. Not so with the big lot, single use Walmart. Given the mixed use nature of the older building, it is generating more jobs per acre than the significantly larger "box" housing Walmart.

Now, let's break from our regularly scheduled programming, and recall Annabeth Karson's farewell to Commissioner Mulvehill. It's important because at the 40 second mark, she begins to state based upon some strange fallacy that residential development, of any kind, takes more in services than it provides in revenue. She congratulates the former Commissioner Mulvehill for her realization of this "fact" during her term as Commissioner.

I have debunked this theory before. It is pretty much a half-truth, and if it does apply, it applies more to new single-family residential development on previously vacant land than it does to new, denser residential development in urban areas. Urban areas already have the infrastructure in place and do not require the public subsidy that goes with new "greenfield" development. That is the ke difference.

Look at the following image which shows the tax revenue contribution of 357 residential units. One is in a downtown location and one is in an automobile-dominated suburban area. Again, we see the efficiency of the urban location in producing property tax revenue.

At a typical suburban density, this example from Sarasota comes in at just a little over 11 units to an acre over 30 some acres. Infrastructure costs to service that type of suburban multi-family residential development are $10 million and the total county tax yield per year is around $238,529, resulting in a 42 YEAR payback period.

The same 357 multi-family residential residential units in downtown Sarasota would consume only 3.4 acres, have almost 50% less costs in providing infrastructure. But in that downtown location, the project would pump out $1,990,900 per year in tax yield to the County. That equates to a payback period of 3 years. The rest contributes to the general fund of the community for as long as the buildings exist. The difference between the county's return on investment is the difference between 2% for the suburban location and 17.6% for the downtown location. And this is for RESIDENTIAL development.

The moral of the story here is do not believe everything you hear when people sashay up to the podium to make a point based on irrelevant facts.

Getting away from the residential example, Joe sent me this quick-and-dirty analysis of two commercial properties with which we are all familiar. One is the Green Orchid building in downtown Lake Worth, home of the Bamboo Room. The other is the Home Depot on Lake Worth Road. This information comes from the Palm Beach County Tax Appraiser's office.

"Just for the heck of it, I ran the value of the Bamboo Room against the value of the Home Depot out on Lake Worth Ave., west of 95.  Here's how they stack up:
Bamboo Room:
Taxable Value - $619,075
Acres - 0.3007
Value Per Acre - $2,058,780
Home Depot:
Taxable Value - $5,517,856
Acres - 12
Value Per Acre - $459,821
So, the Bamboo Room Building is about 4.5x the potency of the Home Depot from a property tax standpoint.  Or another way of looking at it is that if you had 1.4 acres of Bamboo Room Buildings, it would equal the entire property tax production of the 12 acre Home Depot."

Keep this in mind the next time that you think that height, density and intensity should be kept unrealistically low in downtown Lake Worth. We must make efforts to increase and diversify our tax base. We lost 2/3 of its value during the Great Recession.

In another follow-up communication from Joe Minicozzi, he writes this about over-limiting height and the implications of that over the long term:

"Also, thank you for doing the show.  That is an invaluable asset to the community.  Dialog, dialog, dialog.  And an informed one, even better.  I'm a big fan of this Abraham Lincoln quote:"I am a firm believer in the people. If given the truth, they can be depended upon to meet any national crisis. The great point is to bring them the real facts."
Also, with regard to building height and density, once a community gets locked into that, it sort of limits its future supply of revenue.  Once capped, it begets (or should beget) costs.  Even if the City were to never hire another staffer, costs will still rise.  One would assume that you'd want your folks with seniority to get a raise every once in a while, no?  So where does that new demand in $$ come from?  You can raise taxes, or you can do a new development that increases the tax base.  Anyway, you know the drill there, but it helps when the community talks it through, and so long as they are conscious of the limitations, they need to understand what happens with a decision.  There are plenty of tall buildings in a lot of cities (some that are even 100 years old) and no city was harmed by them.... because they are beautiful.  What I find in community after community, is that no one can have an articulate conversation regarding aesthetics, and that's a real problem.  Perhaps your community has that potential, or perhaps that should be the challenge to the artists, but they need to be engaged in an honest way."

Make sure and listen to the show. Click link above.