• Hallsmith: City fails 1 Taylor St. math test
    June 25,2014
     

    Which weighs more — a pound of apples, or three pounds of oranges? If you

    guessed oranges, without hiring a consultant, you’d be right. Which creates more jobs and raises more in taxes: 50,600 square feet of hotel, 36,400 square feet of housing, or 21,200 square feet of office space? Amazing, constructing the hotel creates more jobs and brings in more sales taxes. You don’t need to hire a high paid economist to tell you that. A fifth-grade student could do the math.

    Yet in a city where the need for affordable, family housing is reaching crisis proportions, how is it that the study shows that if 41 housing units were constructed, only three children would be added to the school population?

    To check any economic analysis, you need to carefully study the assumptions. Some are explicit, like the heavily weighted square footage figures of the three alternatives presented by the city, and some are implicit — those housing units are certainly not aimed at young families if they estimate only three children are going to live there.

    Given the scant attention being paid to the costly environmental cleanup that still needs to be done to make the property habitable, I’ll ignore the question of whether anyone in their right mind would want children to live there. Assuming it were possible, affordable family housing would not only meet an important need, but if at least 41 children lived in those units — a fairly conservative estimate of one per unit — the tax impact would be significant, since we get money from the state for education on a per pupil basis. More students, more revenue from the state, lower taxes.

    With a current state allotment for students of approximately $13,500 per pupil, 41 new students in the school would bring in over $500,000 in new revenues from the state of Vermont. That new revenue would lower our school taxes. Incredibly, the analysis doesn’t discuss either the state tax revenues or property tax impacts of the development. The report assumes children out of the equation. What about the additional taxable value of the buildings themselves — is it ignored because the city is going to offer the developers significant tax breaks (also known as a tax stabilization package) to get them to build it? Time will tell.

    The only taxes the consultants talk about — the sales and meals taxes — Montpelier doesn’t collect, because we don’t have a local options tax. The rest of that page is empty; was the property tax part of the report a section the city deleted before it sent it out? Property taxes are not discussed at all.

    The consultants also cannot be expected to say anything about questions they were not asked. They were not asked, for example, which of the options had adequate market demand to support the new use. Or what the impact would be on their neighbors — the building owners in the downtown who would lose hotel guests and other tenants if the market demand is not sufficient to avoid losses elsewhere. Multimillion dollar projects based on “build it and they will come” are destined for failure.

    Is the city trying to cover its tracks? A huge, national chain hotel coming in with large construction costs will tend to mask the high price the city paid for the property as well as the additional cleanup costs the city still has to pay to make it possible to build any of these uses. The federal grants the city has do not cover cleanup costs — the feds only buy clean sites for their projects.

    The official line seems to be that Alan Carr cleaned up the site, and that justified the city’s top-dollar purchase. It’s true, Alan Carr cleaned up the site. He cleaned it up enough for a parking lot. Not for a hotel, or an office complex, and certainly not for family housing.

    Perhaps the best use of the Carr Lot is a parking lot. It’s a nice, stable use where all the highly carcinogenic contaminated soils stay undisturbed and no one spends a lot of time on or near it. But having paid over a million dollars for a property the owner himself had on the tax rolls for $75,000, the city needs to come up with something fast.

    How do you spell H-I-G-H-E-R T-A-X-E-S? None of it sounds “vibrant” or “affordable” to me.



    Gwendolyn Hallsmith lives in Montpelier. She is the city’s former planning director.

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