How Much Did the Cottageville Park Demolition Cost?
City Council candidate James Beauchene's comments provoke questions about the project's cost in forgone revenue.
While city officials trumpet the demolition as a triumph for Blake Road, Beauchene says Hopkins shouldn’t erode the city’s tax base to make way for parkland. It’s an argument he made at candidate forums and in an interview with Patch.
So how much has the demolition cost Hopkins?
It’s important to note from the get-go that the Minnehaha Creek Watershed District, not the city, owns the property and oversaw the demolition. The watershed district is a local government entity and, therefore, already exempt from paying property taxes. Even if the buildings continued to stand, the city wouldn’t receive revenue from those properties.
(Local governments collected taxes on the properties in 2011 because the watershed district obtained them after the deadline to claim exemption.)
Of course, Hopkins officials have not obstructed the project. To the contrary, they’ve been cheerleaders for the watershed district’s efforts. So if the city could have blocked the Minnehaha Creek acquisitions, it could have retained the revenue.
For taxes due in 2011, assessors valued the four properties at a total of $2.3 million, according to Hennepin county property tax records. That generated about $54,200 in taxes for 2011.
So the city is losing out on $54,200, right? Not so fast.
That total is split between the city, school district, county and other taxing entities—including the watershed district. An exact breakdown for each entity wasn’t immediately available. However, last year’s city budget presentation stated that the city gets about 40 percent of a home’s property tax bill.
Using the city’s breakdown, each entity would lose the following amount:
- Hopkins: $21,700
- Hennepin County: $18,400
- Hopkins Public Schools: $9,800
- Special taxing districts: $4,300
It’s also not quite accurate to say those bodies “lost” that tax revenue. Because of the way property taxes work, other property owners will end up splitting the cost of the lost payments unless elected officials lower the tax levy.
How much would that affect their payments? Probably not much. For 2011, Hopkins levied $10 million, Hennepin County levied $669 million and Hopkins Public Schools levied $40 million. That means the forgone payments for Hopkins—the hardest hit, proportionately—account for about .2 percent of its levy.
There’s one more piece of the puzzle. Beauchene adds that the demolished buildings are gone forever. This is true, but the properties’ entire tax base isn’t necessarily lost forever because the land remains.
Developing parkland would be unlikely. But for the sake of argument, about $1.7 million, or 70 percent, of the properties’ value is gone for good.
That’s a lot of numbers to throw around. But as many as there are, they don’t tell you one thing: whether demolishing the buildings for parkland is actually a good idea.
Proponents argue that demolition will pay off in better quality of life, lower crime and, perhaps, increased property values down the road. Beauchene, of course, feels differently. Ultimately, it’s up to voters to decide in the upcoming election which perspective they support.
Taxes payable in 2011
|Property||Type||Total value*||Building value||Total taxes|
|415 Blake Road||Commercial||$677,000||$475,000||$24,629.16|
|427 Blake Road||Apartment||$1,294,000||$1,006,000||$24,482.62|
|1303 Lake St. NE||Residential||$184,000||$115,000||$2,839.42|
|1305 Lake St. NE||Residential||$145,000||$84,000||$2,237.58|
SOURCE: Hennepin County
*Properties were assessed by Jan. 2, 2010.