Saturday, October 30, 2021

Article #14- A Vote for Additional Shopping in Town

This article regarding Article #14 was submitted by Jim Moran, Longmeadow resident. 

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916 Williams Street
 
Warrant Article #14 at the Special Town Meeting on Tuesday, November 2 will likely decide the future of the Church property at the corner of Redfern Drive and Williams Street as voters will decide on a possible change to its zoning from Residential to Commercial as requested by the current owners- The Colvest Group. (Article #14)

Question- Do town residents want to see additional shopping in town or do they want to see their taxes reduced through commercial development of the property or both?

Voters at the Special Town Meeting on Tuesday need to know the impact of this development on their quarterly tax bill.

Because Colvest and others in town including some Select Board members are promoting this development as a means to reduce property taxes for homeowners or to mitigate the effects of the Proposition 2.5 tax ceiling, I decided to determine the actual impact of additional property taxes from a new shopping center at this location on our budget process. 

Normally I would ask long time town employee Paul Pasterczyk with budget related questions but he retired this past June and is no longer available.  My next best resource is Mark Gold- a long time member of the Select Board and one of the most knowledgeable members of our town government regarding Longmeadow's budget process.

Here are some of Mark Gold's comments in this matter....

Below are recent estimates made by the Longmeadow Assessors office with assistance from KRT appraisals for property values and tax revenue for the proposed 916 Williams Street development based upon a similar recently developed adjacent parcel for the Longmeadow Shops.

 
The Town of Longmeadow raises approximately $56 million every year through property taxes.  For ease of computation, let's say they go up by 2% per year (last year was 1.78%, but the Prop 2-1/2 limit is 2.5% so 2% is a good compromise).  2% of $56 million is $1,120,000 per year.  That's what the town needs to increase our tax revenue by each year JUST TO KEEP A LEVEL SERVICE BUDGET This annual increase covers town/ school salary increases, increases in the cost of fuel, etc..

When improved, Colvest's property will bring in about $175K in annual tax revenues.  The rest (water, storm water, sewer, etc.) is a wash because of enterprise funds.  Meals taxes (if there's a restaurant) would be extra.  But the property already brings in $25K in taxes, so it is only a net increase of $150K.  That's 13%  of the annual increase we need, and that increase only comes in ONE YEAR. So the impact of this property on our Prop 2.5 tax ceiling issue is negligible.  We need a 30 house subdivision coming into the town every 3rd or 4th year if we want the growth to impact tax rates.

Looking at the impact of the development on the average homeowner's tax bill.  
For 2021...
  1. Total Town property evaluation was $2,283,546,608
  2. Amount to be raised by taxes:  $56,494,943
  3. Tax rate;  (2 divided by 1):   $24.74
So, according to above table, a Colvest building (there's also land value, but that's already in line 1 above) will be valued between $4.6 and $5.5 million.  Let's call it $5 million.  All other things being equal, that would result in the following calculation:
  1. Total Town evaluation was $2,288,546,608  (increase of $5 million)
  2. Amount to be raised by taxes:  $56,494,943  (this doesn't change in this scenario) 
  3. Tax rate;  (B divided by A):   $24.69

That's a reduction of $0.05 in the tax rate. 
For the "average" home assessed at $354,000, that's a savings of $15 in ONE YEAR ONLY.
   After that, the taxes go up again, although one could argue that they save that $15 every year in perpetuity.

Regarding Tuesday's town meeting vote on Article 14 .....
Vote YES if you simply desire to see additional shopping options in town. Remember a YES vote will have a very minor effect on your tax bill.

Vote NO if you want this property to remain zoned as Residential.

1 comment:

Pete Landon said...

Jim, $175,000 is a significant amount of tax revenue potentially coming from church property. Each and every year.

Not sure why minimizing the revenue from new growth impact statistically accomplishes?

If the zone change is defeated developer has to wait two years to re submit.

If in the meantime Colvest decides to sell to a tax exempt entity (another church )the property tax revenue goes to zero.

Should we add loss of $25,000 now paid by Covest to Town ..to Mark’s new growth revenue of $175,000 ?

And call the new revenue $200,000, without considering any new meals tax potential revenue, or fees to Town enterprise funds?

In any event to raise the 1.1 million for level service you determined is a challenge . And this new growth revenue will take incremental pressure off of residential taxes.

Best, Pete Landon
5 Meadowbrook