Join Date: Jan 2011
Location: Nashville, Tennessee
Likes (Received): 876
At the First Interstate Bank Operations Center on Tuesday morning, a North Carolina developer touted the public benefits of investing in downtown revitalization.
In the same building a few hours later, the regional administrator of the federal Department of Housing and Urban Development heard about efforts to create a sustainable community in the mostly industrial area that stretches east of downtown Billings to MetraPark.
The speaker at the first event was Joseph Minicozzi, executive director of the Asheville, N.C., Downtown Association. His main message was that cities need to think like farmers — in terms of yields per acre, in this case the yield of tax revenue per acre of development.
He drew numerous examples of high-yield development from his work with Public Interest Projects, a private, for-profit real estate company that concentrates on urban infill, historic preservation and business start-ups in downtown Asheville.
He said Asheville, population 80,000, had a thriving downtown until the mid-1950s, when an expressway was built through its middle. During the 1970s and '80s, he said, the downtown was "dead as a doornail," with blocks and blocks of boarded-up buildings and deserted streets.
The downtown began to recover after 1983, when citizens rallied and stopped a plan to raze blocks of buildings and construct a downtown shopping mall. From 1991 to 2010, the taxable value of downtown property increased from $104 million to $656 million.
One six-story building that was developed by Public Interest Projects was bought for $300,000 15 years ago and is now worth $11 million.
More important is the comparison between downtown development with the kind of big-box development that usually occurs far from the city center.
The Walmart store in Asheville, which sprawls over 34 acres, pays $6,500 a year per acre in property taxes, Minicozzi said, while the average property tax paid in residential areas in Asheville is $19,542 per acre. But the building mentioned above, in the heart of the downtown? It pays $634,000 a year per acre, he said.
In terms of total taxes paid, the county takes in $51,000 a year per acre on the Asheville Walmart, compared with $414,000 a year per acre on the six-story downtown building.
"That's what the community got by our investment," he said.
On the other side of the equation, Minicozzi said, it costs cities a lot of money to extend infrastructure — streets, sewer lines, water, streetlights — to a suburban development. Downtown, the infrastructure is already there, meaning the city makes much more money per acre and pays much less to provide services.
Minicozzi did the same sort of analysis for Billings and came up with some startling findings. According to county property tax records, he said, the ConocoPhillips refinery paid $880 per acre in 2010, Rimrock Mall paid $1,965 and Costco paid $2,023.
In the heart of the downtown, the old Masonic building paid $29,822 per acre, First Interstate Bank paid $32,102 and the old Montana Power building on North Broadway paid a whopping $230,058 per acre.
Minicozzi also presented what he called the "Tale of Two Wells Fargos" — the new West End Operations Center and the old bank building on North 27th Street. The West End building sits on 14.6 acres, pays $1,296 a year per acre in property taxes and provides 30 jobs per acre.
By comparison, the downtown Wells Fargo building sits on .48 acre, pays $634,000 per acre in annual property taxes and provides 1,327 jobs per acre.
Minicozzi said cities that think in these terms will do more to encourage downtown development and discourage development on the fringes of the city. His appearance was sponsored by several local businesses, the city of Billings and the Sonoran Institute, a nonprofit that studies land-use and planning issues.
Later in the day, Rick Garcia, Region 8 HUD administrator in Denver, heard about the East Billings Urban Renewal District — in which the First Interstate Operations Center sits — and then toured the area by bus.
He was accompanied by Erik Amundson, HUD's Montana field office director. They heard about the district's attempts to develop mixed-income, mixed-use neighborhoods, and about projects like the proposed North Park Children's Center.
The district is applying for a $3 million Community Challenge Planning Grant from HUD to establish a fund that would be used to invest in projects that dovetail with the district's sustainability and livability principles.
Amundson said HUD should make a decision soon on the grants, but he said he couldn't say anything else that would hint at the agency's estimation of the worth of the district's application.