Saturday, the Antiplanner spoke in Damascus, Oregon, a rural community on the fringe of the Portland area that Metro planners have targeted to become a dense, New Urban city of 100,000. The residents of the area are none too happy about that and have been fighting it by passing initiatives preventing the city from cooperating with Metro.
Meanwhile, I’ve been intrigued with a similar situation in New Mexico: Mesa Del Sol. This is 12,900 acres of formerly state-owned land adjacent to (and recently annexed into) Albuquerque. The state and city hired Peter Calthorpe to plan a New Urban community, and then picked Forest City, a national developer that specializes in mixed-use projects, to develop the area. Fortunately for Forest City, the area had no previous residents to protest the development.
Normally, in a master-planned community, the developer installs all the infrastructure (roads, water, sewers, parks, etc.) and then covers the costs out of sales or fees from property buyers. In this case, however, Forest City asked for some huge subsidies through tax-increment financing to make the project feasible.
The city agreed to give Forest City two-thirds of all property and sales taxes it collects from the development over the next 25 years, while the state will give the company three-fourths of state tax revenues (New Mexico calls its sales tax a “gross receipts tax”). “It’s like Stapleton, with a twist,” says one of Forest City’s brochures. Yes, Denver’s Stapleton Airport redevelopment project received only $294 million in TIF subsidies, while Mesa Del Sol’s taxes are estimated to return about $500 million to Forest City.
Measured by the amount of subsidy, some say this makes Mesa Del Sol the largest TIF project in the nation. Curiously, the New Mexico legislature did not authorize this kind of a TIF project until 2006, but once it did so, the city and state decided to start big.
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Of course, Mesa Del Sol will require fire protection and other urban services that normally would be paid for out of property and sales taxes. Most of the funding for these activities will have to come out of someone else’s pockets.
When finished, Mesa Del Sol is supposed to have as many as 37,500 homes housing up to 100,000 people. That’s a subsidy of more than $13,000 per home. Of course, the neighborhood will also have offices and shops that will share in the subsidies. On the other hand, this doesn’t count the subsidies to New Mexico’s expensive RailRunner commuter train, which will stop at Mesa Del Sol.
Just why is it so important to pack people in that New Mexico needs to subsidize this kind of density? After all, it is not as if New Mexico is running out of open space. Moreover, the whole point of New Urbanism is supposed to be that it is more efficient than low-density development.
Compare Mesa Del Sol with one of the Antiplanner’s favorite master-planned communities, Sienna Plantation. Occupying slightly fewer acres (10,500), Sienna is expected to eventually have about 8,000 homes housing around 20,000 people (currently it has about 5,500 housing about 12,000). Thus, the densities are about a quarter of those of Mesa Del Sol. Yet, far from requiring subsidies, all of Sienna’s infrastructure costs are paid for by homeowners and other property buyers.
Will Mesa Del Sol residents drive a little less than those of Sienna Plantation? Maybe, but that is far from certain and even if it is true it isn’t clear if it is really a good thing. The Diesel-powered RailRunner, after all, emits plenty of CO2 by itself.
Mesa Del Sol is simply a scam on the part of Calthorpe and Forest City. Next time the state of New Mexico has some land it wants to develop, it should just sell it to the highest bidders and let them decide how to develop it.
Mesa Del Sol is simply a scam on the part of Calthorpe and Forest City. Next time the state of New Mexico has some land it wants to develop, it should just sell it to the highest bidders and let them decide how to develop it.
Harsh words. Might make Dan cry. After all:
“Especially SG, which – as we all know – the vast majority of surveys show that the majority of folks want a neighborhood that resembles a SG community***?
DS”
‘Nuff said. We all know it; case closed!
The Antiplanner wrote:
Mesa Del Sol is simply a scam on the part of Calthorpe and Forest City. Next time the state of New Mexico has some land it wants to develop, it should just sell it to the highest bidders and let them decide how to develop it.
I must respectfully disagree, based on what you have written.
This is incredibly bad public policy, but the blame should not be placed on Calthorpe and Forest City or even the planners, but should be directed to the elected officials (apparently New Mexico at the state level and Albuquerque at municipal level).
They are supposed to be in charge, and they should not be engaging in these sorts of giveaways – giveaways that are likely to be in place long after the politicians that did the giving have left office.
It is my understanding that if a city annexes an area it is required by law to provide city services, usually water and sewer, within a couple of years. Could the annexation be a part of the equation of the TIF? Without the TIF would the city have to foot the bill for most of this stuff anyway?
What CPZ said.
DS
That’s a subsidy of more than $13,000 per home.
You’ve forgotten the Home Mortgage Interest Deduction subsidy.
DS
bennett posted:
It is my understanding that if a city annexes an area it is required by law to provide city services, usually water and sewer, within a couple of years. Could the annexation be a part of the equation of the TIF? Without the TIF would the city have to foot the bill for most of this stuff anyway?
At least in Maryland, if your property becomes eligible for public water and/or public sewer, you must pay a so-called “hook up” or “front foot benefit” charge for both water and sewer, which funds the expense of expanding those systems (and it doesn’t matter if your property is within the corporate limits of a municipality or not – most of Maryland’s population resides in unincorporated areas, and water and sewer are provided by the counties (in some cases by municipalities) or in some cases by a public-sector water and sewer utility like this one).
Those hook-up costs are usually in the thousands of dollars for each home served, and a property owner can either pay it all in one lump sum, or amortize it over 23 years, in which case the charge appears as a separate line item on the property tax bill.
CPZ,
The problem with blaming this solely on the city and state is that both Forest City and, especially, Calthorpe specialize in this kind of thing. Forest City has done many projects without TIF, but its biggest ones have used TIF and it promotes them heavily on its web site. Calthorpe designed a New Urban village, Laguna West, for the market; it failed and the developer who finished it took out much of the density. Since then, most of Calthorpe’s work has been helping cities write mandates for New Urbanism.
Saturday, the Antiplanner spoke in Damascus, Oregon, a rural community on the fringe of the Portland area that Metro planners have targeted to become a dense, New Urban city of 100,000. The residents of the area are none too happy about that and have been fighting it by passing initiatives preventing the city from cooperating with Metro.
Whose property is it? Don’t the owners have a right to use their undeveloped land and put up housing on it if they want?
If the residents of the area are truly concerned, let them buy the developable land at market prices if the owners are willing to voluntarily sell and hold it vacant.
This sort of busy-body interference in property rights makes me sick.
The city agreed to give Forest City two-thirds of all property and sales taxes it collects from the development over the next 25 years, while the state will give the company three-fourths of state tax revenues
Maybe something like what Philadelphia has done should be considered instead. In order to attract new housing construction on vacant, underutilized or abandoned lots in an essentially built-out city, the city offers a 10 year property tax abatement to the purchasers of the new homes. The buyers become city residents and must pay the city wage tax, and probably the extra 1% city sales tax too. This abatement doesn’t actually cost the city anything, since there wouldn’t be any property tax revenue to not collect in the first place if no new home was built.
Since many new home buyers typically won’t consider a previously owned home, the city comes out ahead by attracting new residents it wouldn’t otherwise have, and it is not required to send checks to any developers – it just gives the new residents a tax break (mostly for money it was not expecting to collect anyway). Really everyone comes out ahead – the developer gets a profit on the sale and remains free of dependence on extorting money from the government, the buyer gets a new home and good deal on taxes, the city gets more residents and higher overall tax revenue but does not have to build any new infrastructure to speak of since the city was already built out and planned for 2.5 million residents 50 years ago.
New Urbanism is working out fantastically well for my East Multnomah County family.
Thanks to a benevolent compost/pilot program “prescribed” to my low-income, working-class neighborhood, I now have RATS in my backyard. Pre-pilot program, I had no rats. No legitimate pests of any kind, actually.
Is this an unfortunate coincidence or side effect of New Urbanism’s righteous omnibenovlence(e.g. “Let’s try out this pilot on the little people first, the ones most likely to resist it.” ?
The city has been obnoxiously non-receptive to my feedback (e.g. calls go unreturned, e-mails go unanswered; I get put on hold indefinitely only to be hung up on). And I have not belligerent, I have been polite. By and large.
Surely there’s no element of classism at work here? New Urbanist lefties are anything but classist, right?
Perish the thought, naysaying small-“guvmint” friends. Perish the goddamn thought.
This week I plan on taking photos of the numerous “road not improved” arteries in my ‘hood e.g. giant, unnavigable mudscapes with gaping, volcanic holes in them.
I want to share New Urbanism’s upsides with all the doubters here. Portland most assuredly remains “the City That Works.”
The problem with blaming this solely on the city and state is that both Forest City and, especially, Calthorpe specialize in this kind of thing. Forest City has done many projects without TIF, but its biggest ones have used TIF and it promotes them heavily on its web site.
IME every single developer seeks as many breaks as they can get to lower costs and maximize profit.
DS
Dan:
every single developer seeks as many breaks as they can get
Isn’t that what everyone does on the Form 1040 every year? Its human nature at work.
Yes, exactly Andrew. You’re channelling DS, watch out for the sockpuppet harrumphing!
DS
Doesn’t anyone find it kind of creepy that Dan talks about himself (as DS in the third person, almost as if it’s another person?
http://www.chron.com/disp/story.mpl/nb/fortbend/news/6207065.html
If I were a stuck up planner with an inferiority complex that my education and intelligence just doesn’t measure up, I would stalk a website and one day attack commentors for not being in line with political opinion.
If I really had my head up my rear end, I would say stupid things about other commentors even though the day before I commented like a lunatic and said “That’s a very small minority opinion. Thanks for sharing it. Good luck in your campaign.”
Too bad the Internet lets trolls post more than anyone else with their uneducated tripe.
Too bad the Internet lets trolls post more than anyone else with their uneducated tripe.
Dan has to come here to post his uneducated tripe. It’s pointless to spread it around with his fellow planners. They all agree on the same nonsensical ideas, so it’s no fun. And he can’t spew it at some “stakeholder involvement” meeting that the planners so love, because he’d get fired. So he comes and spews his venom here. A big bonus is the unfortunate tendency of the Antiplanner to coddle Dan’s venomous bile at the expense of everyone else.
The Antiplanner wrote:
The problem with blaming this solely on the city and state is that both Forest City and, especially, Calthorpe specialize in this kind of thing.
Thanks for clarifying that.
Forest City has done many projects without TIF, but its biggest ones have used TIF and it promotes them heavily on its web site. Calthorpe designed a New Urban village, Laguna West, for the market; it failed and the developer who finished it took out much of the density.
I recall the late Professor J. F. Scott discussing the failure of Laguna West some years ago. From the way that he and others described it, it sounded like a “Smart Growth disaster.”
Since then, most of Calthorpe’s work has been helping cities write mandates for New Urbanism.
I see – “help” local governments to write rules that mandate this sort of stuff, then come back and propose to implement it with the help of TIF.
I understand better your critical comments about Calthorpe and Forest City now, but I still think that the elected officials in charge of approving this should be held accountable.
Of course, it is possible to develop even “new towns” without TIF. I don’t believe that Reston (in Fairfax County, Virginia) and Columbia (in Howard County, Maryland) used TIF. Nor have I read that Konterra (going up now along I-95 around the new Md. 200 (ICC) interchange in Prince George’s County, Maryland) is using TIF.
Laguna West was built in the middle of nowhere, with no transit connections, typical cr*ppy 80s CA design, and the grocery stores were not within walking distance at the time it was built. About the only thing it had going for it was the Delta breeze and relatively affordable prices at the time. I did a landscape job there and I didn’t care for it and only later did I hear it was a NU community. Just a typical Greek Club development with a little more density, AFAICT.
Dan
Dan wrote:
Laguna West was built in the middle of nowhere, with no transit connections, typical cr*ppy 80s CA design, and the grocery stores were not within walking distance at the time it was built.
How were the connections to the highway network?
Laguna West was built in the middle of nowhere, with no transit connections, typical cr*ppy 80s CA design, and the grocery stores were not within walking distance at the time it was built. About the only thing it had going for it was the Delta breeze and relatively affordable prices at the time.
How far away were the employment centers?
The same story can be said several times over in Montgomery and Prince George’s Counties in Maryland.
Here in Maryland we tend to build transit-oriented/Smart Growth residential development in places that are far from centers of employment (certainly not within walking or biking distance), because that’s the only place where they can gain approval.
I did a landscape job there and I didn’t care for it and only later did I hear it was a NU community. Just a typical Greek Club development with a little more density, AFAICT.
A lot of what went up in Maryland was not called Smart Growth because the term had not yet been invented.
About the only thing it had going for it was the Delta breeze and relatively affordable prices at the time. I did a landscape job there and I didn’t care for it and only later did I hear it was a NU community. Just a typical Greek Club development with a little more density, AFAICT.
The same solid citizen activists that promote high-density residential development, with plenty of so-called “affordable” housing, frequently do so as long as it’s someplace else.
Why would that be?
Reminds me of Dan, who flogs smart growth and high density development all day long, but in reality lives in a nice suburban house. One set of rules for us, another set for “them”.
How were the connections to the highway network?
They re-did an exit to Podunkville for the new development. But that didn’t assist the people with the grocery store.
How far away were the employment centers?
It is more accurate to ask ‘how long did it take’, as hwy 99 wasn’t widened or HOT laned until much later, and by the time they could widen (difficult for many reasons, including built-out areas adjacent) the TPD were so high that the HOT lane was packed too.
The same solid citizen activists that promote high-density residential development, with plenty of so-called “affordable†housing, frequently do so as long as it’s someplace else.
Why would that be?
House as sole investment and self-sorting?
DS
MetroSucks: Reminds me of Dan, who flogs smart growth and high density development all day long, but in reality lives in a nice suburban house. One set of rules for us, another set for “themâ€.
THWM: Strange enough as it seems, I’ll agree with you there.
I live in a suburb too, though I travel by suburban train.