This is my third post responding to the guest column in the Villager titled, “Orchard Subarea Plan makes good sense”.
The article talks about the financial benefits that this development will create for the city. This might be a significant benefit to some communities burdened with debt and budgets beyond their tax base, but this is not the case for Greenwood Village. The Village currently maintains a balanced budget, has no debt, offers unparalleled services and collects a minimal amount of property taxes from its homeowners.
The city’s Orchard Station Subarea Fiscal Impact Analysis projects $11.7 million in one-time fees from the development of 2.5 million sqft. This is significantly less than the $21.7 million the article mentions. The article presents a binary choice: 1) the Subarea Plan is approved and the city ends up with a large windfall, or 2) the Subarea Plan is denied and the city ends up with nothing. That simply is not the case. The land being considered for the Subarea is currently zoned for 2.2 million sqft of development potential. Since the $11.7 million is based on square feet, you can extrapolate that the city can still receive approximately $10 million in one-time fees from redevelopment, even if no changes are made to the comprehensive plan or existing zoning. Consequently, the Subarea Plan may only produce an additional $1.7 million in one-time fees.
Additionally, the city’s analysis suggests that the article overstates the net increase in recurring revenue by $2.6 million per year ($2.2 million per GV vs. $4.8 million per the article). It is likely that if Alberta builds a new grocery store and 40 new restaurants that the new businesses will cannibalize business and sales taxes from existing grocery stores and restaurants. As a result, the projected net increase in sales tax revenue may never fully materialize.
If we truly want to maximize the city’s tax base we should not build any residential units. As mentioned in Part 2, residential condominium development generates annual revenue of $0.09 per sqft, whereas retail/restaurant generates $6,278 per sqft. The city’s analysis also shows that the residential units from the Subarea will generate less than $100,000 per year in new tax revenue. In fact, it was noted during the September 6, 2016 study session that the Village loses money on residential developments.
How do existing residents of GV benefit from Orchard Station? We don’t. As I mentioned above, we already have great services, wonderful parks and open space and fantastic events like Greenwood Village Day. We certainly won’t get any money back from property taxes. Here is an example of a property tax bill:
A $600,000 house in Greenwood Village with a $4,600 annual property tax bill, only contributes $144 a year to Greenwood Village. By comparison Cherry Creek Schools gets $2,400 and Arapahoe County receives $600.
Greenwood Village is a phenomenal city, with amazing people, amenities and a remarkable quality of life. Is it worth giving these things up for a small one-time benefit? Once the city spends the money, what will we have, other than severe road congestion, overcrowded schools, blocked views and one more shopping mall in an age where retail brick-and-mortar continues to fall victim to the world of online shopping.