Local Commentary

Guest Commentary: Without New Development, Taxes Will Increase

By Chris & Kirsten Zochowski

Recent development trends and the current election campaign have stirred up an intense debate about the future direction of our Little City. Having spoken at length with Council members, City staff, developers and others, and having reviewed much of the available data on our schools, City budgets and financial information, and the history of population growth and development in the City, and living on one of the busier side streets that has seen a fair bit of residential redevelopment, we understand and appreciate many of the opinions and perspectives expressed by people in our community. However, the one thing that has become very clear from this discussion is that these issues are dynamic not static. And, therefore, the situation we face with our taxes and schools is not the result of any one reason but rather a complexity of factors.

We need to recognize one simple fact – as a tiny jurisdiction, the City only has so much land from which it can generate the revenue needed to support our community. The only way to have better schools, a more vibrant and walkable downtown, and enhanced green space is to find opportunities to support these goals with greater revenue generation. Development provides the opportunity to put undervalued and underused land to better use to support the City as a whole. Without new development, the only obvious alternative is an increase in the already high tax rate.

The net effect of the development projects in the City has provided greater resources to keep taxes in check while providing more revenue for City services. For example, since 2002 the six mixed-use projects – the Broadway, Byron, Spectrum, Read Building, Pearson Square, and Northgate – have yielded $2.8 million per year in net revenue to the City. In addition, developers of these projects have contributed $3.4 million for school capital needs. Those who argue for a moratorium on development in the City seem to be forcing us to resolve our issues through tax increases (or are willing to accept that we won’t be able to take necessary steps to improve our schools). With surrounding jurisdictions offering great location and schools at a lower tax burden, pursuing this path would achieve nothing more than drive more of our residents out of town.

With regard to our school system, while it is true that mixed use projects have added children to our schools, these projects represent only a minority of the growth in our schools. The numbers published by the School Board show that the majority of the growth in our schools over the course of the years has come from residential redevelopment, existing housing stock, and the development of substandard and split lots. We have added a significant number of single family homes over the past several years, as a result of split lot development. The residential developers and former residents made a windfall from this and those remaining are paying the price.

To us, this has been the real problem in our City. To suggest that a moratorium or a pause on development of our commercial space will somehow save or reduce burdens on our schools is unsupported by reality. We cannot control the inflow of families and outflow of empty nesters in our town. It is hard to understand how we can manage the net effect of the residential and student increase that will occur from single family home turnover without continuing commercial development activity to provide additional revenue. Absent development, we will need to increase property taxes yet again. We fear higher taxes will simply drive more empty-nesters from our community with the likely result that additional children will arrive, further burdening our already stretched system.

Because these development projects take years to review and build, we cannot afford to halt efforts to attract new, smart development projects that can help solve our financial problems and provide the necessary resources for our City and schools. We should not let perfect be the enemy of the good. To assume that the growth and increased demand on City services can be managed without commercial growth in the City seems entirely unworkable without significantly increasing property taxes. Development may not be perfect, but it does offer the best way forward to help deal with variables we cannot control in our City.

Our best hope is to use the opportunities we have with development projects to stem the tide and work towards increasing commercial revenue that we will enjoy as residents, and which will hopefully serve to retain empty nesters and create a revenue stream from those living in close proximity to our City. We can’t stem the traffic created by development outside the City, but we can support development that will create revenue to support our City and schools!