The Transylvania Times -

By Derek McKissock
News Editor 

Planner: Density A Better Deal For Cities - Brevard NC

 


The more dense development found in downtown Brevard is a better property tax revenue generator for the city than a large spread-out development, such as the Forest Gate Shopping Center.

That was one of the conclusions by Joe Minicozzi, a planner with the Asheville consulting firm Urban3, speaking to Brevard City Council during a workshop last week at the county library.

The council is working on updating the city’s Comprehensive Plan, with Minicozzi’s presentation, “How We Measure the City: The Dollars and Sense of Development,” aimed at helping council with the plan’s land use chapter.

Density has been among the major talking points for council during its discussions because the city’s growth is limited by several factors, such as topography, floodplains and the inability to involuntarily annex.

Urban3, according to its web site, specializes in “land value economics, property and retail tax analysis and community design.”

Minicozzi’s presentation, which he’s given all over the country, relies heavily on data.

Minicozzi first looked at Asheville, including giving a historic perspective of its growth and focusing on the importance of public and private investment.

In the past 20 to 30 years, Asheville has seen a development/investment boom that has translated into more funds for government coffers.

In 1991, the total taxable value of Asheville’s central business district was $104 million. By 2010, it was $665 million.

For Minicozzi, the data shows that certain types of development — dense, mixed use — are more “profitable” for government finances.

Compare/Contrast

In his presentation, Minicozzi compared property tax returns — based on per acreage — that come from a single-family home, a Walmart, and the former Penney’s building at the corner of Haywood and Walnut streets in downtown Asheville. Minicozzi included sales tax revenue —when applicable — as well.

The per acre comparison is at the heart of Minicozzi’s data-driven argument that greater density is the financial key for local governments.

“When you dig into the numbers and do the math, you can find what is producing revenue, wealth, sustainability, everything for your community,” Minicozzi said.

Minicozzi said his single-family home in west Asheville sits on 0.13 of an acre and has a taxable value of $232,000, or $1.8 million in value per acre and roughly $19,000 in property taxes per acre.

One of the Asheville Walmarts is a 220,00-square-foot building sitting on 34 acres. It brings in roughly $3,000 in property taxes per acre to the city and $47,000 in sales tax revenue per acre.

The former Penney’s building is 54,000 square feet on 0.19 acres. This translates to $634,000 per acre in property taxes and $83,600 in sales tax revenue per acre.

“The per acre method of getting to this is critically important because it’s about land-use efficiency,” Minicozzi said. “It’s about how you can best utilize your real estate.”

A three-story building that become six stories brings in more cash flow to a city and typically doesn’t mean extra infrastructure costs, such as water or sewer lines, because they are already there.

Minicozzi’s firm and Brevard Planning Department staff also did some computer modeling for Transylvania County.

Taxable value per acre is most significant in downtown Brevard and Lake Toxaway, specifically property around the lake. Downtown Brevard’s tax value per acre is about $12 million, while Toxaway peaks out at about $7 million.

“The potency of the lake is very clear but then it dissipates incredibly rapidly,” Minicozzi said. “You don’t see that in downtown (Brevard).”

As a whole, the city makes up 2 percent of Transylvania County’s land mass but has 15 percent of the county’s overall taxable property.

The national forest, state parks and forests, and other government properties mean about half of the county is exempt from taxes.

“(The city) takes in little area but (is) punching above (its) weight in value,” Minicozzi said.

As with the Asheville examples, Minicozzi provided comparisons of taxable value per acre of properties in Brevard.

• The Forest Gate Shopping Center, including Walmart — $850,000 per acre.

• Kmart — $630,000 per acre.

• College Station — $1.36 million per acre.

• Aethelwold building in downtown— $4.4 million per acre.

• Mayberry’s/Proper Pot building on West Main Street— $7.8 million.

• The Drew Deane Gallery building on West Main — $11 million an acre.

• Platt Architecture building on West Main — $12.4 million an acre.

• Hollingsworth building on East Main — $5 million.

Many of these downtown buildings, other than the Hollingsworth, are old, Minicozzi said, but they are providing more property tax revenue than newer, cheaper buildings.

Minicozzi suggested the city should be “thanking” the owners of these historic downtown buildings.

County Benefits

Minicozzi said county governments are also the beneficiaries of denser, mixed-use development within the city. Using the per acre method, the following are examples of the 2014 county property tax yield:

• County resident (average values per Transylvania County Assessor file) — $185.

• City resident (average values per Transylvania County Assessor file) — $670.

• Kmart — $1,279.

• Walmart — $1,523.

• College Station — $2,764.

• Downtown average — $5,395.

• Hollingsworth building — $10,181.

• Mayberry’s/Proper Pot building —$15,764.

• Drew Deane Gallery building — $22,509.

• Platt Architecture building — $25,160.

“What is good for downtown is great for the city but is unbelievable for the county,” said Minicozzi, who believes one of the conversations the city needs to have with the county is civic investment in downtown.

“What grows the revenue of Brevard also grows the revenue of the county,” he said.

City Manager Joe Moore told council that staff hoped Minicozzi’s presentation would “reinforce the need to promote greater density and land-use diversity.”

How Asheville Changed

During his presentation, Minicozzi talked about how cities have a “trajectory” of growth.

In the late 1880s, Asheville looked a lot like how Brevard looks today in terms of size and growth. By the 1920s, Minicozzi said, Asheville was growing 20 percent a year, and by the decade’s end was the second largest city in the state after Winston Salem. But mismanagement meant it also had the largest debt per capita in the country.

Asheville fell into a decline in the 1950s and 1960s and it took until 1976 to pay off its debt. Asheville was one of the few cities not to take federal money to pay off its debt.

In the 1970s and 1980s, downtown Asheville had boarded up buildings and little-to-no activity.

A decision was made not to put a mall downtown and efforts — including public and private — to revitalize the area began in the late ‘80s. These efforts included art projects and investment.

Minicozzi said that in the ‘90s there was some opposition to public investment, such as the roughly $26 million spent in infrastructure improvements, including parking decks.

The complaint was the money was being spent on “empty parking lots.” That’s not the case today, Minicozzi said, with Asheville one of the top tourist destinations in the country.

Public Interest Projects, the parent company of Minicozzi’s firm Urban3, has provided some of the private investment in downtown Asheville. It’s development projects include Salsa’s and Zambras, the Orange Peel, the Alternative Reading Room, the Asheville Hotel and the Vanderbilt Apartments.

The Aloft Hotel on Biltmore Avenue is the kind of multi-use development that Minicozzi suggested is the perfect model for cities. The site includes not only the hotel, but there is public parking and housing is scheduled to be built in the future.

The city provided funding for the parking garage and though it took some time for the public/private partnership to be finalized, it was important to the developers, Minicozzi said, to have a “broader civic consciousness.”

These types of developers, he said, are the sort that municipalities should try and attract.

Council Reaction

After the presentation, Mayor Jimmy Harris and the five council members were contacted for comments about the presentation.

The following responded:

Councilman Wes Dickson said the presentation was “good food for thought” and required further council discussion.

Harris said the presentation “amplified the value that small business investors create in a community.”

“It is clear that Brevard’s revenue growth, especially due to annexation laws, will depend on build-out within its current city limits,” he said. “This presentation also challenged some of our current regulations on parking requirements and the need for public parking infrastructure. The presentation focused on density in central business districts and the value per comparable acre to other development areas that have additional infrastructure requirements that, in my opinion, need reviewing.”

Councilwoman Ann Hollingsworth said Minicozzi has a “great common-sense approach to city economics.”

“His talk was not only fascinating, it resonated with me as a business person, council member and downtown advocate,” she said. “His approach to land-use economics by using the property tax per acre method to calculate tax base allows us to more effectively compare which type of land development has the most return on investment for Brevard.

“We are limited in our growth due to state laws and we are surrounded by National Forest and geographical constraints. We have to be smart about how we use our land within the city.”

Hollingsworth said she shared Minicozzi’s belief that the “the vibrancy of our downtown is reflective of what our community life looks like.”

“When he showed us the analytic data, it overwhelmingly supports that our highest property tax revenues are coming from our dense downtown development verses commercial sprawl,” she said.

Councilman Mac Morrow said it was a chance for council to further its understanding and appreciation for Minicozzi’s presentation topic — “the value of downtown: a profitable public investment for the community.”

“To have a conversation with someone with such depth of knowledge helps validate our understanding of city policy specific to growing our marketplace,” he said. “Point two – good policy based decision making requires good policy and insuring a profitable rate of return for public investment underscores this principle. (Minicozzi’s) message was loud and clear.

“I appreciate city staff’s initiative in promoting this presentation to our wider community. City council workshops generally may not be so entertaining, but this one certainly was memorable in many ways.”

 
 

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