On June 28, 2016 the following letter was submitted into the public hearing record on behalf of the Coalition. We also hope to have it published in the local newspapers as a Letter to the Editor.
Dear County Commissioners & Planning Commission Members,
Thank you for the opportunity to submit additional information into the public hearing record for Text Amendments 15-08a and 15-08b.
The Calvert Coalition for Smart Growth is a group of Calvert County citizens and business owners who monitor local and state government agencies and actively participate in the planning process to ensure that Calvert County continues to develop as planned, using Smart Growth Guidelines and encouraging public participation every step of the way.
We have done extensive research on the effects of big boxes, on the effects of new residential growth, and we have analyzed the Fore Report, on which the proposed zoning changes are base. We wish to share the results of our research with you as follows:
What Benefits to Calvert County do Big Boxes Really Bring?
Attached is a copy of the assessment of the property on which the WalMart in Prince Frederick is located. As you will see, the property assessment (21 acres of land and the 91,386 square foot building) is $7,066,967.00. The tax rate is $0.952 per $100, which equates to $66,911 in taxes per year.
If the zoning changes will allow big box stores with garden centers that total 185,000 square feet, that equates to slightly more than twice the size of Walmart (91,386 x 2 = 182,772 square feet). That means the assessment and taxes paid would be assumed to be close to twice that of Walmart. Therefore, the County would be receiving approximately $133,822.00 in real estate taxes (not even close the $1.9 million suggested at the hearing!)
OK, so what else does Calvert get from big box development? Sales taxes do not go to the County - they go to the State. The county gets the income tax from those workers who live in Calvert, but if they live in Calvert, we pay for their children’s schooling, their hospital care (if they can’t pay for it, which most minimum-wage earners can not), their public safety services, etc.
In May, Calvert’s unemployment rate was 4.6% (effectively - full employment). http://msa.maryland.gov/msa/mdmanual/01glance/economy/html/unemployrates.html Where will big boxes get their employees?
Meanwhile, the County does not get the income from big box banking services, from big box legal services, nor do upper management live here, so we don’t get the income tax from them. Big box store owners also do not dine at our restaurants or frequent our other businesses. When business owners live in our county, we get those things and much more. They join our Chamber of Commerce and donate to worthy causes, and become a real part of our community.
2. How Much Do New Residences Eat Away at any Benefits from Big Boxes?
The average household has 0.5 students (15,500 students/ 31,000 households). According to the new county budget, the operating cost per student is $7,821. At 0.5 students per household, that cost is $3,911 per household.
Other county government costs (police, roads, health, etc.) add another $5,317 per household. Together, the county costs per household total $9,229. Now some of these costs may be covered by fees, grants or assistance by the state government, However, new development also generates new costs for a county in terms of new schools, road improvements, new buildings or building expansions, etc. The Capital Budget in FY 17 is $22.3 million and includes many projects to accommodate new growth, but not for the proposed 2400 units that will be constructed if these amendments are passed.
To pay for all these public services, the county has real property sales, income taxes, and fees. A new house valued at $300,000 will pay $2,853 in real property taxes. If the occupants are earning $150,000 per year, after deductions and exclusions and filing jointly, they will pay about $2,200 in county income taxes. Combined, real property taxes and income taxes total $5,053, over $4,000 less than county costs. Of course county fees, state contributions and income from utilities help to balance the costs, but this quick analysis points out the roof tops don’t make money for counties unless the owners earn a whole lot more.
In short, adding rooftops (building lots of houses) is not a form of economic development that will balance the budget!
3. Is the Fore Report an Accurate and Proper Tool to Assess the Effects of the Proposed Development?
The Fore Report is a cost-revenue analysis, not a cost-benefit analysis and its conclusions are misleading and ill-founded. A cost-benefit analysis is needed before regulations that will affect quality of life are changed. The Fore Report should not be used to justify policy changes, as demonstrated below:
As the Report computed the anticipated need for retail stores, it ignores the trend towards online sales which continue to grab a larger share of the retail market. Online sales are currently 7.8% of total sales and are growing 15% per year.http://www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf.
The Fore Report assumes that if there were enough of the right type of stores, every Calvert resident would spent every retail dollar in Calvert. However, people travel and commuters (60% of Calvert residents commute to work) often shop at lunch and on their trip to and from work. Those types of sales are not factored in the report.
The Fore Report assumes that there is a major imbalance in the types of retail stores in Calvert, producing an even greater need for retail than the numbers would show though it fails to fully explain its rationale. Such analysis is made more difficult as food stores and general merchandise stores sell such a wide range of products.
The Fore Report says, "if all of the ‘lost' retail sales (excluding food and beverage store sales) could be repatriated to Calvert County, County real property tax revenues would increase by nearly $1.9 million.” However, as discussed above, additional big box stores will not generate that kind of tax revenue and the proposed residential units will eat up the majority of any gains.
The Fore Report says that those ‘lost sales’ generate the need for 1.6 million square feet of retail, equal to the size of 13 Prince Frederick Walmarts. However, the Prince Frederick Walmart (91,000 sq. ft.) only generates $67,000 in property taxes. Under that scenario, 1.6 million square feet would only generate $900,000.
The retail proposed at the Armory Square project may only generate about $200,000 in real property taxes if the equivalent of three Walmarts is built.
$900,000, or even $1,900,000, is less than 1% of the 2017 operating budget. It won’t pay for a traffic light on MD 4 or MD 231, which will certainly be needed if all this development occurs.
Providing good retail sales is a public service, especially when locally owned. Building big boxes and high density residential is not economic development and will not balance the budget.
4. What is Smart Growth? Is Armory Square considered Smart Growth?
Smart growth is a better way to build and maintain our towns and cities. Smart growth means building urban, suburban and rural communities with housing and transportation choices near jobs, shops and schools. This approach supports local economies and protects the environment.
At the heart of the American dream is the simple hope that each of us can choose to live in a neighborhood that is beautiful, safe, affordable and easy to get around. Smart growth does just that:
Smart growth creates healthy communities with strong local businesses.
Smart growth creates neighborhoods with schools and shops nearby and low-cost ways to get around for all our citizens.
Smart growth creates jobs that pay well and reinforces the foundations of our economy. Americans want to make their neighborhoods great, and smart growth strategies help make that dream a reality.
We have attached two reports: “The Myth of Big Box Stores” and excerpts from “Smart Growth is Smart Business”. We believe Bargo’s claim that the Armory Road project is “Smart Growth” is false and misleading.
We are attaching a petition we began this past Saturday on Change.org for which we gathered 683 signatures as of the printing of this letter. We have also gained support on our Facebook page by 362 followers, as well as 90+ citizens who have signed up on our website, .
We encourage you to please withdraw the text amendments and begin rewriting the Prince Frederick Master Plan and Zoning Ordinance, and follow the recommendations from the Charrette.
Calvert Coalition for Smart Growth
P.O. Box 752
Prince Frederick, MD 20678