Introduction
Now that the proposed “Tiverton Glen” mixed use development (the “Glen Project”) has made its way from the Planning Board, where economic considerations are relatively minimal in its scope of review, to the Town Council, where economic considerations should be paramount, now is the time to make sure the project has been fully vetted from an economic point of view.
At first blush, it’s easy for both “tax hawks” and “big government” types to embrace the Glen Project as one dreams of lower taxes and the other of more government spending, but how likely is it that Tiverton will really see significant new tax revenues down the road? And at what cost might those revenues come?
The Fiscal Impact Study (“FIS”) proffered by the developer appears to suffer from a number of flaws. These concerns should be fully vetted before granting any approvals.
#1 – Timing
The FIS was dated August 2014 and nearly a year will have elapsed between then and potential town approval. The study is at risk of becoming stale and the local economy has not improved much, if at all, since last year. In fact, it was recently reported that local foreclosures are up 107% from last year.
#2 – The “Per Capita Multiplier” Method May Not Make Sense in Context
To estimate expenses from the project, the study applies the current proportion of municipal expenses to population, but does this make sense? Tiverton does not have anything in town like the proposed Glen Project so using the current ratio does not seem to apply. Tom’s Market, for example, is not the same thing as a Shop-n-Stop or a Walmart so the same expense ratio can’t just be assumed.
#3 – What About the Impact on Other Properties?
The FIS does not even attempt to address the adverse impact that the Glen Project will cause on nearby properties. The noise and congestion will certainly diminish the value of nearby properties and will also damage – perhaps destroy – businesses across town. That the Glen Project study makes no effort to account for its collateral damage invalidates the study in its entirety.
#4 – What Guaranties Do We Have?
The FIS makes a number of projections but there are no guaranties that any of these projections will be realized. The Town Council should perhaps consider requiring guaranteed revenue streams.
#5 – The FIS Underestimates the Impact on Schools
The FIS looks across the region and nation to come up with an assumed impact of only 5 students per 100 households, but why don’t we instead use the real data that we already have in Tiverton. In Bourne Mill, for example, the ratio is approximately 31 per 100. The Glen Project is not restricted to ages 55+ like Country View and the Villages at Mount Hope Bay, so there is no guaranty that the FIS assumption will be true. The local public school superintendent also disputes this critical FIS assumption.
#6 – The FIS Overestimates the Market-Adjusted Tax Rate
Property values are reassessed every three years and were again this year (in 2015). The FIS uses current market values but also uses a tax rate generally based on old market values.
#6 – The State Takes Care of the Roads?
The FIS claims that the town will not be burdened by road wear and tear because the nearby roads are “maintained” by the state. Most of the state roads in Tiverton are in deplorable condition with no sign of help anytime soon. The most likely outcome is that the Glen Project traffic will degrade the roads even more, the state will not adequately maintain them, and Tiverton residents will be stuck driving on them.
#7 – Potential Impact of School Reputation
The FIS seems to suggest in an addendum that one reason the student:household ratio will likely be low is because Tiverton schools are not adequately prestigious. This is a debatable (and arguably offensive) assertion of the developer to make and in any event not a good reason for our Town Council to base approval of a major project on.
#8 – Other Considerations
The FIS only attempts to estimate cost based on the current ratio of taxes. It makes no attempt to estimate the cost of time lost in traffic, intangible costs such as noise, and environmental impact. There is also the fair question of whether higher-end purchasers of real estate will want to pay a premium to be near highway noise when half of the waterfront Starwoods property remains undeveloped.
Summary
It is the proper role and obligation of the Town Council to evaluate economic considerations of a proposed project (and to do so at a much higher degree than that of the Planning Board, which has a different role). The Tiverton Glen Project may ultimately turn out to be in the best interests of Tiverton taxpayers, but the Town Council should not proceed with any approvals until economic concerns of the FIS (and a second study, to be addressed in a future post) are fully vetted.
