When Chris Nash of Topsfield Associates—the most recent prospective developer of the Smith property—appeared before the Planning Board last month, he described a project that included a chain pharmacy of 13,000 square feet, a retail/office building of 20,000 square feet, and 135 parking spaces. He suggested that the assessed value of his proposed project would be in the neighborhood of $10 million and could generate possibly $200,000 in taxes to the town. The $200,000 number has since been picked up and repeated in other venues.
Even though this project now appears unlikely to happen, let’s take a look at the asserted tax impact just in case it ever comes up again. And let’s start by seeing what an assessed value of $10 million looks like for retail-intensive developments.
The chart below compares the key metrics from 2 nearby retail centers that each have assessed values in the ballpark of $10 million. The Topsfield proposal, for comparison, is shown in the right column. It’s hard to see how it could get to a valuation of $10 million based on this data.
So what is a more realistic assessment figure for the kind of development that was proposed by Topsfield Associates? I’m not an expert in the intricacies of commercial property valuation, but here’s one that appears to be a good comparison: 100 Boston Road in Groton, MA contains a 16,000 square foot CVS (pictured above), a separate 15,000 square foot professional building on two floors, and 112 parking spaces all on 9 acres. It’s located on a state highway–Route 119/225–just outside of the center. Overall, it’s as close a comparison as you’ll find, I think. Current assessed value in Groton for that entire package is $2,556,700.
This CVS-anchored property in Groton would yield property taxes of about $49,600 if it was in Bolton. If you consider that the Smith parcel in its current state is generating about $13,000 in annual taxes, the net impact then is really more like $36,600.
The $36,600 number itself becomes even smaller if you factor in an average Cost of Community Services (CoCS) allocation for commercial/industrial property. Studies suggest that for every dollar of tax revenue from commercial/industrial property, there is normally about 50 cents worth of municipal expense required to support it. The other 50 cents is the true additive contribution. That means that the $36,600 from above represents about $18,300 in true impact to the town budget. We’re now a long way from $200,000, and we haven’t even talked about impact to surrounding property values and other issues associated with this location.
So, it seems as if it would take at least four CVS-type developments to reach the $200,000 figure that has been floated, that is if you used the higher $49,600 tax revenue number. If you used the lower number of $18,300, it would take ten such developments. As they say, be careful what you wish for.
*To anticipate a possible question, yes, there are other taxes that come to the town from businesses, for instance: personal property tax on tangibles such as equipment, furnishings, inventory. These sources of revenue, from what I can tell, tend to be a small part of the overall tax profile of a business-zoned parcel when compared to the land and buildings part (the exception, of course, being businesses that house sophisticated technology or machinery).