Wednesday, November 13, 2013

Police and Civic Center Open Houses are Opportunity to Talk Property Tax Efficiency

The debate over the proposed police station at the Civic Center can give the City an opportunity to talk about efficiency in value and property tax generation - in generating private and public value.

But will they seize it?

(Did anyone go to the open house last night?  There's another one tonight!  Interestingly there doesn't seem to be an article in the paper about it.)

Mid-rise downtown development generates 10x
property tax/acre over suburban big box sprawl
(see bottom for notes on image credit)
The police station would be a public facility, and off the tax rolls. The police station itself won't be responsible for directly generating property taxes - unless they do some neat mixed-use project!

But if a facility is built on land that is currently on the property tax rolls, taking the land off the rolls creates an opportunity cost: What is the property tax the City will forgo if it builds on land that is currently private? (Also:  What other costs will the City incur by building on this land?)

And what is the range of property taxes that such a private development might have generated?

Almost two years ago a commenter highlighted this kind of question, and it's an analysis we need more of!

The analysis origates at Strong Towns, and they have thought a good bit about it. They have compared property taxes per acre on a big box store, a mid-rise downtown building, and a single-family house.  What might be most surprising is that the value/acre of the house exceeds the value of the big box store!

This points to one of the flaws in the argument for Eugene's $17M police facility. According to proponents of this, the Eugene Police chief already said that it was a significant compromise:
The Eugene Police Chief is very pleased with his $17 million new 65,000 sq.ft. building and his 210 secure parking spaces. He says on YouTube it "is a perfect solution". Look it up. He said "ideally they would be downtown" but that would be "twice the cost to achieve".
I don't know about you, but I read this utterance of "perfect" not as meaning "surpassingly excellent," but as the sort of thing you say when your host asks, "would you like a glass of wine?" and upon bringing some Two-Buck-Chuck, you say "Perfect. Thanks."  The wine is just fine.  It does the job, more than meets the floor of your requirements:  It's technically sound, unflawed commodity wine.  But Two-Buck Chuck is far from the literal meaning of "perfection."  This use of "perfect" conveys a different and colloquial meaning for "perfect."

And you may remember that back in December 2011, in a public report to City Council, staff talked about hidden costs
the subcommittee also discussed the additional annual operational costs that would arise from moving the Police Department to an offsite location. Operational cost increases would include considerable additional labor and fleet expenses for Police staff travelling back and forth to the Civic Center for court and meetings with other City departments. Other City staff would also require additional travel and fleet expenses to meet with Police at their new facility and there would be an incremental increase in facility maintenance costs for a new remote facility compared to a facility located close to other City buildings....The subcommittee found that the increased operational costs and overall benefit of the central Civic Center site outweighed the increased initial capital cost of construction.
So it is important to remember: Eugene's solution takes a building off the tax rolls and adds operational costs.

In general, I think a discount solution in Salem is going to harbor hidden costs - just like ways the Kroc Center or the big box store on a green field development harbor hidden costs and fail to bring all the jobs, property taxes, and local prosperity they seemed to promise.

Now, critics are right to ask questions.  The City should give more detail about the magnitude of additional operational costs at rejected sites as well seize this opportunity to talk about the ways different uses of land generate different magnitudes of value.

We don't need the First Growth or Grand Cru of Police Stations - but isn't there a solid value proposition somewhere in the middle that's not like Two-Buck-Chuck or Big Box Discount Retail?

So, City of Salem:  Here's your chance to talk about the ways different urban forms in the central city offer more than just more density!  Talk about the prosperity bonus from higher density and mixed-uses, ok?  Talk about ways that low-density suburban development generates much less value.  And talk about the ways the Civic Center is not good placemaking, and how changes there might help things.

A rhyme with our Civic Center atrium?
ZGF design for Army Corps of Engineers HQ in Seattle
And if someone comes up with a really good argument for a non Civic Center site downtown, be open to it.  Even if the argument that you have kept citizens "in the dark" is plainly false, it is true that you haven't been as open as you could have been. You need to share more and get more people involved - tell Salemites why ZGF is appropriate choice for the preliminary consulting and an interesting firm, for example!  Why was the CB|Two + ZGF collaboration deemed right?  Give us more on your past reasons and reasons going forward!

Remember, the second of four upcoming open houses is tonight!
  • November 13, 2013 5:30-7 p.m., Center 50+, 2615 Portland Road NE
  • November 20, 2013, 6-7:30 p.m., South Salem High School Library, 1910 Church St. SE
  • January 6, 2014, 6-7:30 p.m., Roth's West Salem, 1130 Wallace Rd. NW
  • last night, November 12, 2013, 6-7:30 p.m., Council Chambers, 555 Liberty Street SE
For more on the Police Station and Civic Center project, including thoughts on why we should be more receptive to ideas about relocating and/or reconfiguring both Peace Plaza and the Mirror Pond, see posts here.

(The slide is from at Marohn/Minicozzi presentation to a North Carolina local government association, like our MWVCOG. The presentation is long, about 12mb and 150+ slides. Lots of it is not necessarily relevant to Salem or Oregon.  If you're interested, though, you can download it here.)

11 comments:

Jim Scheppke said...

Dear SBOB:
Thanks for throwing some contrary ideas in the mix as usual. We need that. But despite what you think about the Eugene project, the fact remains that it creates a huge political problem for our City that the City of Eugene was able to deliver a new police station for under $20 million. I don't see how it can be overcome. I don't think the voters here will ever agree to raise their taxes to pay for something that costs much more than Eugene's new police station.

Curt said...

I attended the first open house last night and learned more important details about the project.

The police facility, as proposed is around $23mil dollars. Not $70mil. or $40mil. as G. James would have people believe. Eugene's police station does not house all the operations that Salem's would-another significant fact that G. James omits. If the costs of those off site leases as well as travel time and productivity losses are factored in for Eugene, it may be a wash financially.

$13mil. is for needed maintenance, security, and renovating the parking garage for use by the police facility. $2mil. of that would need to be spent anyway, even if an off site location were selected.

Now the SCV concept, assuming it is as easy to carry out as they claim it is, only saves $11mil. over the city's proposal--or about $10 a year on my tax bill.

When you factor in the fact that the city would save $500,000 a year in off-site leases, that's another $15mil. in savings--more than enough to pay for a secure parking facility for the police.

The police have also been intimately involved in site evaluation from the beginning. They have looked at what Eugene did. The proposed solution is the one that works best for them.

The fact is that ANY bond measure will be politically difficult for the city. I don't think a $74mil. bond for the SCV concept will be much more attractive than an $85mil. bond for the plan as proposed. The numbers G. James is throwing around don't hold up under scrutiny. SCV is probably only fomenting cynicism toward the city that will make passing any bond measure more difficult.

Salem Breakfast on Bikes said...

Thanks for the update, Curt!

The FAQ was updated yesterday, and it amplifies much of what you say! IN particular on the Eugene facility:

"...dispatch, the crime lab, evidence, storage, and the majority of training facilities are [still] located offsite."

So the City's making a claim that this is not an apples-to-apples comparison.

The City proposal folds all these functions into one site:

"the critical functions located in off‐site leased spaces can return to a centralized facility. A modern  public safety facility would provide adequate interview rooms, evidence storage and processing stations, storage for officer equipment, K‐9 kennels, prisoner holding facilities and office space for detectives and investigators to add to the efficiency and safety for officers, staff and citizens. 

(Now, it's true the FAQ is kinda buried in the city's project site, and until you open it, there's no indication that it's been updated - no "updated" siglum or anything. There are several ways the City could be helping themselves better!)

Geoffrey James said...

Curt:
I was also at the Open House at City Hall. When I got there it was just me and 10 city officials with 5 finished renderings on easels. As my name was mentioned in your article I need to correct some of Curt's statements. The Police Facility was announced by the Manager to be $46 million, not the $23 million that Curt stated. The Police Palace includes underground parking and at that meeting Linda said it was $13 million. So $23 + $13 = $46 million Police Facility. This compares to under $17 million for the new Eugene Police Facility. The comparison is $17M versus $46M i.e. $29 million more to cram it on the Mirror Pond site. Geoffrey James. See Salem Community Vision on Facebook.

Salem Breakfast on Bikes said...

Thanks for stopping by, Geoffrey!

Anyway, I can't speak for Curt, but a central claim here is that the figure for the Eugene facility understates costs by a significant margin: There is the value in property taxes the City of Eugene would have received had that building stayed on the tax rolls, and there is the additional operational costs the facility imposes on the City by its distance from other core City functions. Like lots of additional driving to-and-fro.

Additionally, the facility envisioned by the City of Salem adds several functions not housed in Eugene's facility. So if the Eugene facility included them, its cost would have been greater.

City Police, and not just City staff, have claimed that a site at the Civic Center works best for them. While we should ask them for more detail, doesn't it seem like we should take the wishes of our own Law Enforcement staff seriously, and not necessarily suggest to them that we know what's best for them? They probably have pretty good reasons for thinking a Civic Center site best.

Finally, here's a longer note on reasons Peace Plaza is not a well-functioning public space, and why we should think seriously about moving Peace Plaza to a better public space. I would love to hear your thoughts on this!

Let's keep the conversation going!

Susann Kaltwasser said...

A few quick comments on why the Police building does not need to be downtown:
1) the court is planned to be included in the facility as are all the other combined services;
2) telecommunication is a reality and will become even more common in the next 20 years that this facility will be around. It is currently being used by all courts so that they do not need to transport people to and from jail for example;
3) in case of an emergency having all of your services in one location (no matter how hardened they are) does not seem wise. This facility could be cut off from key parts of the city where they would be needed. We do not do it for fire, why do we do it for police?; and
4) people have asked for some of the study/analysis/fact finding/research into why certain options were selected and other rejected and there is little or no response. The assumption from reading the posted documents is that they do not exist, because they were not done.

Finally, I would like to say that a lot of us would like to see the city have a safer environment for workers and the public. We would like to see the Police have a well functioning building and have up to date buildings so they can serve our community well.

A survey taken several years ago showed that the bond would not pass. A recent Statesman Journal poll overwhelmingly showed that the public opposes the bond. Some people who are asking good questions now, are not the cause of this opposition. In fact, many of us that are asking questions support at least part of the proposal.

If we all agree that the services are needed, we need to find out what is objectionable, fix that and see if we can find something that the public will support.

Curt said...

Geoffrey:

Your addition is wrong. $23mil.+$13mil=$36mil. If we lump parking and the police facility together, that is roughly half the project total--exactly what the FAQ says--exactly what I posted in response to your FB post.

The parking garage will cost $13mil., not $40mil. as claimed in your recent analysis. The civic center estimate is the other half of $70 mil. or $35mil. Not $10mil. as you claimed on FB. $36-$17=$19mil. in savings. Not $46mil. as you claimed to me on FB. As Chief Moore said to me, its not an apples to apples comparison anyway.

He also specifically said to me that they do not want a station on Mission or Commercial because of the access issues with those sites.

Susann:

Your operational questions should be directed to Chief Moore.

I don't think a $50mil. bond will be any more attractive than a $70mil. bond to Salem voters. SCV is not responsible for that. But by publicly impugning the integrity of staff and the process, it only makes it more likely that the bond measure will fail.

For me, a new, state-of-the-art, centrally located facility built with modern sustainable practices is money much better spent than a recycled, Walmart station that demands police adapt their operating procedures to fit the site. But I don't claim to be a typical Salem voter.

Finally, it must be said, that with all the people out there claiming that there has been a conspiracy to shield this project from the public--there were only a handful of people at the open house.

Sarah Owens said...

Anyone interested in this debate who doesn't know how our current civic center came to be built might be interested in reading this account: http://www.salemhistory.net/places/civic_center.htm

Notably, the center seems to have acquired its "brutalist" architectural style -- so offensive to some of the City's critics today -- not as a design choice, but as the result of trying to build the center on the cheap. Check out the whole story, and see why people say history repeats itself.

Salem Breakfast on Bikes said...

Ha ha! Great find, Sarah. It's very much worth reading:

"In the summer of 1968, then-mayor Vern Miller launched a campaign for a bond election on a Salem Civic Center, composed of a city hall, library, police and central fire station.

A similar measure had been defeated by the voters two years earlier. Mayor Miller was advised against bringing the issue back to the voters so soon. But a property tax limitation was scheduled for the Fall ballot, and the mayor feared that if it passed, it would block any civic center campaign for the foreseeable future....

The campaign [which passed] had promised civic center buildings faced with stone and wood. It turned out that there was money enough only for concrete facing, and even with that, there wasn't enough bond money to fully equip the buildings. So a second campaign, for another $2.2million had to be launched a year or two later.
"

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