Published: Nov 03, 2012 07:00 PM
Modified: Nov 03, 2012 10:24 AM
At the Obey Creek concept-plan review on Sept. 19, developer Roger Perry indicated the proposed development would generate total $9.4 million in annual tax revenues. However, 23 area residents raised important questions and presented the towns own data to support their concerns.
The town manager explained, The town has not historically used data to make land-use decisions and, in the absence of financial data, the mayor and some council members made strong statements about the financial benefits of high-density retail and the multiplying effect of 600 condominiums. Despite concerns about data from some council members, unfortunately, the council as a whole moved forward anyway with a request for development agreement from Perry.
I wanted to find out how much revenue the Town of Chapel Hill will generate from this development. Based on objective resources I have tried to piece together numbers for Obey Creek if built out and fully occupied.
• Town property taxes would be $1.73 million based on its property tax rate of 49.4 cents per $100 of assessed value.
• The town receives 38 cents per $100 in taxable sales, which would amount to about $186,000 when adjusted for 25 percent cannibalization from local stores.
• The hotel would generate approximately $169,000 in sales and occupancy taxes.
So, a rough estimate of revenue is $2.085 million.
There are cost of services that need to be subtracted. According to Chapel Hills cost of services report, for each dollars worth of services received, the residential sector contributes between 92 and 98 cents and commercial land uses generate between $1.07 and $1.19.
Based on this information the total expense would be $2.6 million, which includes $500,000 in additional fire protection and equipment necessary due to the height and density of the proposed development as well an additional $100,000 in police protection associated with big box /destination retail.
A complete fiscal analysis would include other revenues and costs such as license fees, job-creation impact, tax subsidies, the estimated 40 to 80 percent traffic increase, school crowding, and environment impact.
The net result of my calculation (minus $515,000), raises a question: Can we afford to run without data on such a huge project? Shouldnt we calculate numbers before rushing to development agreement?
Join us on Monday, Nov. 5, to persuade the Town Council to use a data-driven approach , not just for Obey Creek but for all current and future projects.
And follow us on twitter at @chapelhillgrow
Snehal Patwardhan lives in Chapel Hill.