Letters to the Editor: July 12 – 18, 2018
Why Do Revenue Formulas Change Mid-Project?
At the Planning Commission meeting on July 2, chair Russell Wodiska asked a critical question: If the commercial property of Founder’s Row has been reduced (by over 40 percent), how could revenue projections go up? The answer lies in changed formulas for predicting school children.
Overall revenues for Founder’s Row are down. We are losing the whole hotel and approximately $300,000 in annual revenues (less 80,000 sq. feet commercial space). Yet revenue projections have gone up. The main reason is that the City recently changed its “formula” for predicting school children. In 2015, 2017 and May 2018, the City predicted 43-106 children for Mason Row. Now in a change of formulas, the City predicts only 43 to 64.5 children. Voilà, a savings of $620,000 a year! (41.5 fewer children x $14,893 for school costs.) No wonder Founder’s Row looks like the highest net annual revenue range per acre!
But it’s all in the formulas. In 2015 to mid-2018, we used the formula of 0.33 school age children per apartment. In June 2018, staff decided to apply “actual numbers” and since apartments over Harris Teeter resulted in 27 students (Lincoln at Tinner Hill only 19 students), City Staff now predicts only 43 students for Founder’s Row.
But are we comparing apples and oranges? Harris Teeter is uncozily-located between W. Broad St. and W. Annandale Road. Founder’s Row is more family-friendly — with apartment entrances off residential Park Avenue, a swimming pool and middle school and high school in easy walking distance. The City’s original formula seems much more appropriate, and its projections of 43-106 students more likely.
This leads to key questions: why do formulas change mid-project? Will the City ask Spectrum to pay the cost of educating every student who moves into its apartments (or like Pearson Square will City residents pay — now a project deficit over $400,000 dollars a year?)?
Who bears the costs of changing formulas? Developers certainly enjoy the benefits!
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