Lexington Mall: Another missed opportunity

On one of the most vital spots in Lexington, we are trading one big box use for another.  One auto dependent use for another.  One high energy user for another.   One monochromatic use for another.  One tax paying use for…..oops.  We didn’t even get that right.

Had we planners of vision in this city, we could instead have had a fine-grained, mixed-use, transit-supporting, energy efficient model for future development.   Instead we get a redesigned pond – perhaps for baptisms! And more parking. And maybe a “sculpture.”

Planners of vision would have already staked out what that property should be and let any potential buyer/developers come to that.  Instead, all we do here is react to what gets dumped on the desk.  The exact opposite of “planning.”

Oh well, I’ve been here for 28 years.  I’ve made my choice.

Below is an article that should have helped inform the city about the implications of the redevelopment of that site.

Mixed-Use Downtown Development Puts Standard Malls’ Tax Yield to Shame

Mary Newsom

Mary Newsom

RED WING, Minn. — As local politicians across the country get scorched by voter anger over recession-induced budget cuts — laying off teachers, closing schools and libraries and slashing services — perhaps they’ll be more receptive than usual to some powerful and surprising tax revenue numbers.

So what follows is about fiscal prudence as much as it is about smart city planning.

Conventional wisdom, of course, says that to prop up the property tax base, a high-end shopping mall is just the ticket. But when Sarasota County, Fla., looked at where the county government gets the biggest bang for its property tax buck, it found some numbers that may surprise a lot of people.

Sarasota County Director of Smart Growth Peter Katz, speaking to a meeting of Citistates Associates here late last month, described a recent analysis of the county’s property tax revenue per acre. He pointed first to residential areas. Not surprisingly, when you work the numbers on a per-acre basis, residential property inside the county’s municipalities offered the biggest revenue per acre — a little more than $8,200 per acre for single family houses within the city of Sarasota. This makes sense, as in-town land values tend to be higher.

Next, Katz showed the results from retail properties. Here comes surprise No. 1.: Big box stores such as WalMart and Sam’s Club, when analyzed for county property tax revenue per acre, produce barely more than a single family house; maybe $150 to $200 more a year, Katz said. (Think of all those acres of parking lots.) “That hardly seems worth all the heat that elected officials take when they approve such development,” he noted in a related, written presentation.

Among retail properties, the biggest per-acre property tax revenue in his county, almost $22,000 per acre, comes from Southgate Mall, the county’s highest-end commercial property with Macy’s, Dillards and Saks Fifth Avenue department stores. That’s not so surprising.

But here’s the shocker: On a horizontal bar chart Katz showed, you see that zooming to the far right side, outpacing all the retail offerings, even the regional shopping mall, is the revenue from a high-rise mixed-use project in downtown Sarasota. It sits on less than an acre and contributes a hefty $800,000 in tax per acre. (Add in city property taxes and it’s $1.2 million.) “It takes a lot of WalMarts to equal the contribution of that one mixed-use building,” Katz noted.

Indeed, that three-quarters of an acre of in-town urban-style (14- to 16-story) development is worth more property tax revenue than a combination of the 21-acre WalMart Supercenter and the 32-acre Southgate Mall.

Even a mid rise (up to about seven stories) mixed use building brings in $560,000, and the low rise (up to three stories with residential over retail) brings in over $70,000 per acre — more than three times the return of Southgate Mall.

Katz quipped, “From a fiscal standpoint, this really puts hair on your chest.”

But Katz and the group that worked with him on the tax analysis, Public Interest Projects, Inc., in Asheville (http://www.pubintproj.com/index.php), N.C., went further than just the revenue analysis. It looked at the payback time, in tax revenue, for the infrastructure costs of various types of residential developments. The payback time for a mixed-use condominium building in the heart of downtown was three years. Want to guess the payback time for the residential portion of a multi-use development out at a highway interchange? It was a whopping 42 years.

Nothing involving tax revenues is simple, of course. For instance, what about sales taxes? Obviously that big WalMart and the shopping mall bring in more revenue than just property taxes. But Joe Minicozzi of Public Interest Projects notes, “Generally speaking, there isn’t a heck of a lot of return to the municipality with sales tax — at least compared to the return from property tax.”

And Katz noted that while sales tax revenue can be important to the specific city or town that snags a big retail development, “At the county level such ‘fiscal zoning’ makes little sense.”

Yes, Sarasota County could probably “steal” some commercial development from neighbor counties. “But we’d ultimately do far better to create value through property taxes in smart growth ‘districts,’” he said:

“With a receptive mindset among citizens and elected officials, such places should be infinitely replicable; doing so may actually be easier than trying to squeeze a little more spending out of our citizens’ mostly fixed disposable income.”

Potential tax revenue shouldn’t be the only factor in determining appropriate development for any community, of course — especially not flawed assumptions about which type of development brings in the healthiest tax revenue. And as Katz pointed out, there’s a limited market in most communities for intensive, mixed use development, even if NIMBY opposition were to evaporate, which isn’t likely.Still, evidence is piling up of the benefits of compact, in-town development compared with auto-centric greenfield development. With a smaller carbon footprint, it’s kinder on the environment. It’s kinder on residents’ waistlines, too, as they’re likely to walk more and drive less. And now there’s evidence it’s kinder to government coffers, as well. And that’s an attribute worth some serious attention.

Peter Katz is Director, Smart Growth/Urban Planning for Sarasota County, Florida, amd was founding executive director of the Congress for the New Urbanism.

Mary Newsom is an associate editor and opinion writer at the Charlotte Observer, where she writes a weekly column, writes The Naked City blog at www.marynewsom.blogspot.com, and Tweets @marynewsom.

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5 responses to “Lexington Mall: Another missed opportunity

  1. I have made my comments known to the Southland Christian folks and to the public-at-large and am now labeled as a contrarian. I am glad to see that I am not the only one who sees this as a loss for the city. Council member Feigel will apparently settle for less than good planning.

    • steveaustinlex

      did I reply to this already – it didnt seem like it went thru? The problem began far before Council member Feigle was on the scene – I know that she supported mixed use but Im sure she, that like many others, probably think that something is better than nothing, and that a church is great – that’s fine, there’s an argument for that

      My argument is that we failed as a city in planning. One year ago who would have thought that Lex Mall would be a big box church? Real planning would have created a plan to incorporate a church into a true urban development. Instead, we have surrendered our collective responsibility to the individual (organizational) whim. We need to regain the balance here. We must be proactive.

  2. Tim

    Steve, I’m writing an editorial for the Herald Leader about this. We’ll see if it gets published.

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