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Other Alternatives To Open Space
To the Editor:
The recent Bee editorial “Open Space And The Money We Do Not Spend” cites the fiscal impact of residential development upon Newtown and our desire to preserve its character. Many town residents want to have smart, balanced growth which does not sacrifice revenues so that Newtown becomes an evermore more expensive place.
However, the editorial omitted at least two other options which should be considered.
Let’s take a look at the fiscal analysis which has been presented. Assuming a 29-acre parcel was available, what if a developer placed a two-story, 27,000-square-foot office building on about one acre of that parcel? This leaves 28 acres of open space. Placing the building above parking would require even less of a footprint. At a cost of $200 per square foot to build (total $5.4 million), it would have an assessed value of about $3.78 million. With the current mill rate of $24 per $1,000 of assessed value the building would generate about $91,000 of real estate taxes annually. In addition, assume that the building supported 54 employees at 500 square feet per person and that each employee required $10,000 of furniture, computers, and other equipment. That provides another $9,000 of personal property taxes annually. The total revenue to the town would be about $100,000 annually. Let’s also assume the building would require about $750 per person (or about $41,000 per year) in noneducational costs to the town. Thus, commercial use of just one of those 29 acres could generate net revenue of about $60,000 every year and still preserves 97 percent of the land as open space. It also gives jobs to 54 people who could spend money in Newtown.
Or take a second alternative for the same 29 acres and erect age-restricted housing. A developer places a two-story, 27,000-square-foot structure consisting of 18 individual condominiums each about 1,500 square feet on about one acre of that parcel. Placing the building above parking would require even less of a footprint. That leaves 28 acres of open space. Again, the cost and the assessed value would be the same $3.78 million. This would generate about $91,000 of real estate taxes annually. But due to age restrictions, no educational costs would be incurred. Assume the town spent $1,500 in services annually per resident for a total of $27,000. This age-restricted use of just one acre would generate net revenue to the town of about $64,000 annually and still preserve 97 percent of the land as open space.
Moreover, each time real estate was sold, conveyance taxes would flow to the town and the state. Also, each purchase and sale of the office building and the condos would generate capital gain and income taxes to the treasury and the state. Lastly, there is the benefit of temporary construction jobs, and permanent service and retail jobs for town businesses.
Theodore H. Kreinik, Chairman
Town of Newtown
Economic Development Commission
3 Cadey Lane, Newtown Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â November 30, 2010