It’s been years (according to former Township Committee member Jerry Ryan, over a decade!) that we’ve been discussing the Village Post Office site. Most recently, we are spending money (see Maplewoodian article¹) in part to feel festive about its demolition and replacement with a mixed-use structure on the Township land that was recently sold to JMF Properties.
As the parameters of the deal became known–sale price, anticipated taxes, affordable housing proposal, market data, and analysis of the existing building–many alternatives seemed possible. That discussion, which never really got wings, ultimately crashed when the Planning Board hearings began–a planning board is not allowed to consider financial information.
Nonetheless, reviewing the finances can be insightful. The graph below shows the revenue (whether from tax collection, or a combination of tax collection and lease payments) that would come to the Town under a variety of scenarios. The chart shows the total revenue over a 10 year period.
Total revenue is shown for a variety of examples ranging from (1) the current building, taxed as if it were a post office (first curve, in purple)¹, ranging to (8) the Town continuing to lease the building to the US Postal Service (orange) and (9) an updated lease wherein the Township retains ownership with a long-term lease and the building is upgraded to a new use (in the rear, in red). The black slice in the middle is the total revenue expected from the JMF Properties proposal, as documented in the PILOT agreement.²
The chart is based on the current property assessments for other businesses in town. It uses values that are similar to those other building owners are paying today.
There are clearly opportunities for any owner–so a rainbow and the anticipated pot of gold is more than a cute metaphor. The leprechaun, is just a cute metaphor…but timely! And the grinning Cat? Not cute…but unfortunately, often timely!
One big takeaway is that as a Township we should be evaluating situations in more innovative ways. The example here clearly suggests that we can increase tax ratables in more than one way, and that sometimes the opportunity to collect fees (such as rental payments) may be viable as well.³
Hopefully, if nothing else, a conversation like that is on the far side of our rainbow!
[These points are discussed in more detail on our Community Value And Land Asset Management page.]
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¹It was reported in the Maplewoodian that MVA officials said some of the special events being considered to promote the Village and the new project might include a groundbreaking, demolition party, and ribbon cuttings, “to try to put a positive spin on what we are doing, trying to be ahead of it, make some of these things fun and interesting”.
²The owners of Station House, on Memorial Park, appealed their taxes one year after construction was complete and obtained a 28% reduction in the value of the building (leading to a 25% reduction in taxes). JMF Properties could do likewise depending on how their building is constructed and/or a comparison of land values. Presently, JMF is estimating the land value on their site to be 2.5x other land in the Village. Arguing otherwise after construction is completed could be the basis for a successful appeal of their taxes.
³ The court complaint that was filed by the Village Keepers last year sought to enforce the rules for evaluating structures before permission is given for demolition. The Township continued to argue that they were not required to follow the ordinance that all other properties owners are subject to. The curve similar to that shown here would have been part of properly done evaluation and would have allowed a more informed decision.
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[We survive on community awareness. Please submit your email below for future updates. Also, explore our site for much more info on the history and potential of the site. We hope that these insights will inform future discussion on similar Township issues.]