Wednesday, August 31, 2011

Benefit to the Community

This past Sunday the Herald News ran an article asking city council candidates to share their thoughts about what to do with the surplus of former school buildings. The candidates had a choice of 3 options:

1.    The highest bid

2.    Benefit to the Community

3.    Potential for future tax revenues.

I know what my answer would have been. I've stated many times that the most important consideration when looking at options for these buildings is finding the best fit for the neighborhood and the city. It's a somewhat pleasant surprise to find that 9 respondents, including four current city councilors share that basic viewpoint.

Two councilors, Mitchell and Poulin use the example of the former police station to highlight the pitfalls of going after the highest bid and it's an example I myself have cited constantly. The city bypassed the option of taking a smaller bid from an experienced developer with a great track record and instead ended up accepting a higher bid amount that has resulted in an eyesore that is now a safety hazard! The idea of getting your money upfront is appealing but it won't take long before the money is all spent and we'll be left with the consequences of our shortsightedness. The one candidate who answered that the highest bid is the way to go is Bob Boutin, an experienced realtor.  He brings up good points in his answer. He says we should get valid appraisals and that the city needs to be professional in the business of selling these schools. I would dare say the way the potential sale of the Belisle was handled looks like a comic fiasco that does nothing to make others want to even consider trying to submit a bid. He also points out that the present zoning could possibly hinder sales. Now I still say highest profit is wrong thinking, but these points are not contrary to the idea of benefiting the community. If we have a fair, accurate appraisal we know what the building is worth and parties submitting offers for less than the appraised value should have to justify their reasoning. If the Osborn Street School is worth $750,000 (let's say), and a party bids $100,000 but offers a plan to restore the structure and cites those costs as the reason for the low bid, well perhaps that is enough reason to accept a low bid. If medical offices wanted to locate there and in doing so would create 35 new jobs THAT might be a reason why you would accept a lower bid. As long the intended use was complimentary to the neighborhood and the city and as long as we had assurances (contractually) that a low bidder could not flip the property for a higher profit and that they would do the required work within a set timeframe the bid amount should be secondary.

Only one candidate answered "potential for future tax revenues". It's an interesting answer and one I'm not sure how to calculate. Of course it would exclude selling these buildings to any non-profit organization and it exchanges what is best for the neighborhood for maximizing profits, which I flat out disagree with. I think I read that Meditech pays somewhere between $400,000 to $500,000 in taxes to the city, but their building sits on 17 acres and has 120,000 square-feet of space. None of the former schools is comparable to that. Taking a look at the property record for the Belisle School shows an assessed value of $3,288,500 and if you applied the commercial property tax rate to that you would get just over $70,000. Well that sounds decent enough if you can find someone to buy the school and use the property as is and they don't get it re-assessed (because I think that assessment is probably too high) and they don't somehow get a TIF agreement for coming to Fall River. Chances are the Belisle is going to fall victim to the wrecking ball and become Belisle Commons or some other name for some cul-de-sac. (By the way keep your eyes open on this one to see what well connected developer manages to get a deal on the former school property.) The property is roughly 6 acres, so how many houses can we fit on it? I wouldn't doubt if you could squeeze 24 houses there which not including streets would mean about ¼ acre a house. That's actually pretty generous for Fall River! Well let's assume 24 houses all worth about $250,000 each that would give you a tax bill on each house of just over $2,500! Multiply $2,500 by 24 houses and you get a nice 60k in new taxes! Sounds good right? Well 24 homes probably mean 24 families. If each family had 2 kids that's 48 more kids in the school system. 48 more kids are enough for 2 classrooms! So it's reasonable to assume that so many new kids could mean the addition of at least one teacher in the school department. That's at least 45k a year (salary plus benefits). These kids would require materials, books, paper, etc. and there is a cost to that. These homes will require trash pickup, snow plowing, road salting, electricity for street lights what's the cost of all that? Suddenly you're not looking at 60k in new revenue and you're starting to wonder if you'll break even! So needless to say I have my doubts that we should be pinning our hopes on the greatest potential for future tax revenue.

What bothers me the most is the candidates that didn't answer. This is crunch time and hopefully voters are trying to make informed decisions. Most appalling is the 2 candidates for office that currently SIT ON the real estate committee, including the chair Pat Casey!  (Committee members Poulin and Kilby did submit answers.) Certainly voters might be interested to know the opinions of the members who currently sit on the committee, especially considering its dismal track record.

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