When I was attempting to make my case for mixed-use development to the town at large a few years ago, I searched for (but never found) a study that focused on the financial advantages of mixed-use development. It made sense that such developments produced more in property taxes than, say, a mammoth strip mall. But I wasn’t able to show it with fact.
A sprawling Walmart store produces far less in property tax revenue for Ashville, NC as compared to a mixed-use building
A recent story at Planetizen has done just that. Here is a chart comparing the financials of a Walmart vs. a mixed-use building. The small building is much more lucrative, and it’s not close. The 0.2 acre parcel generates 100 times more money for Ashville, NC than the Walmart per acre and more than 10 times more jobs.
How do our own strip malls fare? In 2005, O’Connor’s Plaza paid $175,000 in property tax. The parcel is 11.6 acres. This works out to just over $15,000 per acre. And the Zombie? In the same year, RD Management forked over just $16,000 more than O’Connor’s, and it is almost 3 times larger. So in ’05 the Zombie was worth a pathetic $6,400 per acre, or even less than the Ashville Walmart.
When you hear people talk about the “cost of sprawl,” this is what they mean. It is, in part, an “opportunity cost” — in other words, the money we surrender by not having a higher-value development on that land.
Could a mixed use development make over $600,000 per acre in Billerica? Maybe not. But let’s say it’s worth just one third of that: $200,000 per acre annually. It would earn us about $6,000,000 in revenue. So, the opportunity cost of not redeveloping this land is just over $5.8M every year.
Mind-blowing, no? Could Billerica use an extra $5.8 million?
I say yes.
