Economic development and the Faustian proposition

Another character in our unfolding story is the new 9-member Economic Development Committee. This group has set ambitious goals for itself and is starting out with vigor. Their published mission statement reads:“…to help attract, retain and grow business and jobs in Bolton to improve the economic environment and quality of life for its residents and meet the long term needs of the community.”

To this end, one of their primary objectives is to help facilitate the filling of existing vacant commercial space, of which there is quite a lot. This alone is a difficult challenge and one that I’m sure most support.

But another objective is to expand the commercial/industrial base in town by attracting additional business beyond—or separate from—that required to fill the available existing space. This involves proactively marketing the town as a good place to locate your business, a good place to consider new commercial development. One of the principal assumptions driving this latter objective is that there is a benefit to diversifying our tax base, thereby lessening our heavy dependence on residential property tax as a municipal revenue generator. Another assumption is that such land use does not produce as much of an expense load on the town budget as, say, additional residential housing does (adding children to schools, etc). In other words, a commercial component in the tax revenue mix is, or should be, cash positive. Moreover, if successful, a broader base of business strengthens the underlying economic engines of the community and the region. One of the short-term objectives of this committee is to validate and model this thesis in order to help give direction to their efforts. Hence item#3 on the agenda for Monday night.

Of course in real life things are not always that straight forward. The more one looks into this, the more complex are the issues. There are any number of studies that consider the question of benefits and trade-offs associated with business expansion. They use terms like Cost of Community Services (COCS) and, when paired with expected incremental tax revenues, express overall desirability in terms of “COCS ratios.” One can find examples of studies to support any view: that a town such as ours should not allow business expansion, or that it should greatly encourage such activity and not a moment too soon.

The Master Planning Committee studied this in 2006. That committee reviewed 5 large studies and analyzed 2005 Bolton tax data in detail. They concluded then that to make an appreciable change in overall revenue levels (>5%), one would have to accept the addition of several major commercial/industrial developments in town. In fact, their modeling suggested that we would need at least five additional properties of the scale of the Bolton Office Park (former Flatley complex) in order to achieve a 5% impact on the tax base (or, as they put it, to see a 5 % reduction in the average household tax bill). They concluded then that the dimensions of the consequences—affecting town character, traffic, services, and quality of life—would overwhelm the modest top-line revenue benefits expected from this level of diversification.

Things are different today than they were in 2006, no doubt about it. The local tax burden is heavier, the economy weaker, and consequently the challenge is greater to balance a town budget and fund necessary activities. Yet, issues such as town character, traffic, services, resources, and quality of life are just as much at play now as then. And when considering the kind of permanent change a commercial development entails, we should resist rash responses to the pressures of the moment.

I’m not anti-business. I’ve started businesses, managed them, grown them, advised them. But if someone asked me whether the town should encourage more commercial activity within its borders today, I’d say…it depends. It depends on a whole group of factors: type, fit, location, scale, resource requirements, human and environmental impact, alignment to long-term vision of town, etc., etc., etc. It’s an easy question to ask, not an easy one to answer.

Bolton is a beautiful small town, with unique and precious qualities that attracted many of us here and keep us here. There is a strong sense of place, of historical significance, of connection to the earth–all of which will diminish and be made more common by the influx of most kinds of commercial activity. There is much worth preserving and much worth fighting for.

So, as this new committee proceeds with its work and asks for public input, it is one person’s hope that just as the committee explores the benefits of business expansion, it also recognizes the costs and the consequences. Sometimes consequences cannot be measured in currency, or in COCS ratios.

Here’s a suggestion that might help with the “it depends” answer above. Consider instituting a disciplined, comprehensive impact review process for commercial development proposals over a certain size. It’s a common practice and one that we don’t yet do here in Bolton. Greenfield, Mass, for instance, requires such an evaluation for any proposal of over 20,000 gross square feet or 500 anticipated vehicle visits per day. Bolton Crossing, as proposed, exceeds both of those thresholds by a wide margin. According to Greenfield, “The impact review process is intended to promote and protect the natural resources and aesthetic qualities of the Town and to mitigate any adverse impact to the Town services, traffic patterns, abutting properties, the economy of the Town, the character of the Town, or the public health, safety, and welfare of Town residents.” Adverse findings may result in rejection of the proposal. The review is produced by independent professionals and provides a structured, formal way for projects to undergo rigorous evaluation. Cost is borne by the developer. Something to consider.

There’s no question in my mind that town leaders and others will be making hard choices and harsh judgements as we all wrestle with these issues. The future seems full of Faustian propositions. It is my hope that strong values will guide our thinking and that we keep the long-term view in front of mind.

—Roland

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4 Responses to Economic development and the Faustian proposition

  1. Anthony says:

    The one good thing that has come out of this process, regardless of any particular outcome, is that it has got people thinking about the Town.

    I fully support a comprehensive, impact review of any large scale project. (It is worth emphasizing that the Greenfield requirement is not restricted to commercial and industrial, but applies to residential development as well.) The hard part is that there still needs to be some benchmark or plan against which to evaluate such a review. We know any development, commercial or industrial or residential will have an impact, but what impact is acceptable and what is not? For example, how much increased traffic is acceptable? The review itself will not answer the fundamentals as to whether the burdens / downsides are within acceptable limits As you astutely point out, studies can be used to support anyone’s views, and I suggest that, except for extreme cases, the outcome of any development impact review will be no different. One person’s upside will be another’s downside. They are a good idea and should definitely be part of the process; I’m just not sure we’re ready for them yet, at least not until we know where we want the Town to be, and that is a decision for the Town which no study can answer.

  2. d017 says:

    The master plan that was developed most recently largely said the best solution was to buy land and take it off the tax rolls, thereby preventing all development. It was in the end a failed effort.

    The reality is a household with 2 kids in the schools is a net loss on taxes. The small businesses in town (the few we have) would have to have an incredible number of police and fire calls to result in a net loss in tax income. Can we PLEASE stop using this myth of businesses using huge resources? We have businesses in town. We have records of what emergency services calls are made to each address. Maybe looking at ACTUAL data from our actual town would make sense, rather than quoting studies that as you say appear to be all over the map?

    Bolton is hostile to businesses. It has that reputation, and deserves it. There is almost no commercial space, and most of what little space that is available is in buildings that have been poorly maintained. We deserve our high tax rates, and the hidden tax an environmental burden of all residents driving 5 or 10 miles at a minimum for groceries and other shopping.

    • Can'tWinn says:

      It seems that this debate over Smith’s separates residents into 2 camps: those who moved here because of the lack of commercial activity, and those who moved here and then noticed that there was very little commercial activity.

      I think having an impact study would be great. People on both sides of this issue could get some information on the likelihood that their assumptions would come true. The only thing i know for a certainty is that this property will set the tone for the whole town, so we better make sure we know what we want and what the trade-offs are likely to be.

  3. Bob says:

    While I agree both sides of the equation can be debated, studied, and analyzed adnauseum, it makes prudent sense to have the existing commercial properties fully utilized (leased) out before embarking on projects that would have a material impact to the town at large. There are hundred’s of thousands of commercial real estate lying vacant in towns neighboring Bolton. So building more commercial real estate in Bolton expecting businesses to come to Bolton is short sighted at best. But a foolish thing to do in these economic times.

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