As taxpayers, we expect our elected officials to put the money they collect from us to good use. As an individual taxpayer, I felt that the Shady Oak Road project deserved a little more scrutiny. After all, $2,800,000 is a lot of money for our small city to pay, and in these tough economic times cities should be asked to find ways to make the most of what they have, to find ways to make smart investments with taxpayer's money and be run "more like a business". So, here are some numbers to take a look at in regards to this "investment", all from the publicly posted Hennepin County Property Map and the of the project.
The total value of the properties to be demolished is $2,883,100. Nearly $2.9 million of this $12.5 million project ($2.8 million from Hopkins, $2.5 million from Minnetonka, $7.2 million in "free" money from the Federal Government) is going toward the acquisition of property, provided that they're purchased at the 2011 assessed values. That's over 23% of the cost of the project. The taxes collected on these properties in 2011 was $51,272.66. Assuming that the road lasts 30 years (the typical lifespan of a road before it needs to be completely torn up and rebuilt), that's at least $1,538,179.80 in lost revenue to the city and county (more than that, since property values and taxes tend to go up). On top of that financial hit, we'll need to pay for the reconstruction of the road again, and in that future time I doubt that we'll get that "free" money from the feds.
For a city boxed in to four square miles, can we afford to lose this income? That money goes toward all the services the city provides and the maintenance of our infrastructure. Is it wise to just demolish buildings for a faster way to get cars to bypass our city? Is it fair to ask the rest of the city to make up for the lost revenue so that drivers can get from one part of Minnetonka to another a minute faster?
Now let's take a look at Leaman's Liquors and Nelson's Meats and Bakery. With the plan as drawn up, they will have a road similar to Excelsior Boulevard running right up to their front doors. I ask that the city consider a two-lane road with adequate street parking near the businesses and ample sidewalks, much like on Mainstreet. To illustrate my point, I found two properties, one on Main and one on a new segment of Excelsior, that are similar to the Leaman's/Nelson's buildings on Shady Oak.
The first property is 1023 Mainstreet, which houses the Boston Garden and a couple other businesses. In 2011, the building was assessed at $732,000 and the property taxes collected were $26,717.62. If you look at 9092 Excelsior Boulevard, a multi-tennant retail space near the intersection of Excelsior and Jackson, it's valued at $369,000 with $12,793.78 in taxes collected. These are two similar buildings, but because of its undesirable location the one on Excelsior has a lower value and pays less than half of the taxes owed by the building on Mainstreet. From the perspective of the city, the building on Excelsior is paying far less to be on a street that's far more expensive to maintain than Mainstreet.
Let me repeat that: The building on Excelsior Boulevard payed $12,793.78 in 2011, and the city and county need to maintain a 4-lane highway similar to what is planned for Shady Oak with that money. The building on Mainstreet payed $26,717.62 and the city needs to maintain only a 2-lane road, plus this building sees far more customers even though the businesses on Excelsior have far more cars driving by. And that's just the problem, though... They're only driving by, intent upon getting through Hopkins to somewhere else.
So, for the $2.8 million contribution that Hopkins is being asked for the construction of this 4-lane quasi-highway, we are losing an additional $1.5 million in tax revenue over the 30-year lifespan of the road. On top of that loss, the properties on a more expensive 4-lane throughway contribute around 50% less in property taxes than those on more cost-friendly 2-lane streets. As an added hit to our businesses, those on the busy 4-lane roads see fewer customers because cars are less willing to slow down (much less stop) and pedestrians avoid the area.
The numbers don't add up. This project makes no sense for Hopkins. If the project goes forward as planned, the City of Hopkins should demand to be compensated for our financial losses instead of paying for an "improvement" that makes our city less valuable.
This article is also posted at Matthew Kilanowski's personal blog, King's Corner.