A more realistic analysis of the impact of “Yes” and “No” zoning votes on Monday.
First, the most interesting numbers.
A more realistic projection of the annual benefit from the “Yes”
and “No” votes on zoning on Monday is:
Yes $3,908,770 net benefit
No $2,209,937 net benefit
This is a far cry from what’s presented in the table being
distributed by the Capital Group, which says “Yes” votes would lead to $3,553,668
in revenue, and “No” would lead to $734,426 in annual costs.
Even then, it’s very much a best-case scenario guess.
I've tried to put together an overview of the table that you've seen, how it was calculated, and where it went off the rails a
bit.
“Logistics/Commercial/Industrial Tax Revenue”
The author took a Capital Group master plan and worked out the square footage of the industrial buildings for the "Yes" and "No" scenarios. They valued it at $85/square foot, which is a figure that they pulled from the RKG Associates "Financial Impact Analysis" last fall. They then calculated the revenue we'd have received at our FY2022 tax rate, $19.45 per $1000 of valuation.
Yes 2,413,776 square feet x $85 per square foot = $205,170,960 total value
No 1,517,000 square feet x $85 per square foot = $128,945,960 total value
How much of that would Capital Group ultimately build? Who knows.
In FY2022, the total assessed value of all the Industrial and Commercial property in Lancaster was $126,838,849 -- less than what Capital Group says they'll build even if you vote "No" on Monday.
"Retail Tax Revenue"
Maybe the most interesting thing to glean from this is how little retail space either a "Yes" or "No" will yield. The author looked up the plans, summed the retail square footage, and valued it at $120/square foot. (That value also came from the RKG Associates analysis.)
Yes 34,000 square feet x $120 per square foot = $4,080,000 total value
No 16,100 square feet x $120 per square foot = $1,932,000 total value
The author multiplied that by our FY2022 tax rate, $19.45 per $1000 of valuation.
"Residential Tax Revenue"
This is where things start to veer off the road. For both "Yes" and "No", residential property is valued at $140/square foot. That's the value-per-square foot that the RKG analysis used.
For the "Yes", the author calculates the value of the residential properties shown on the 40R plan:
Yes 216,000 square feet x $140 per square foot = $30,240,000 total value
For "No", he calculates the value of the 40B building in the Capital Groups state application. He then tosses in a second project for good measure.
No 216,500 square feet x $140 per square foot = $30,310,000
216,500 square feet x $140 per square foot = $30,310,000
In earlier drafts, the author didn't include these 40B buildings at all. In one draft, he instead included a 750-unit MBTA district (!) as a cost for "No." Shortly thereafter, Lancaster was no longer on the hook for a large MBTA district like that -- he added a speculative 170-unit 40B project at the old driving range on Old Union Turnpike. For the final draft, he settled on two 200-unit 40B buildings.
"Municipal Costs"
The author used a somewhat murky calculation here, from the RKG analysis. He calculates the number of resulting households (obvious I guess) and multiplies it by $475 per household. He then calculates the number of resulting employees (not so obvious) and multiplies it by $97.99.
The employees are calculated "using an industry average employees/square foot calculation" taken from the RKG analysis: the analysis projected 1 worker per 1,500 square feet for industrial uses and 1 worker per 700 square feet for retail properties.
Yes 2,473 employees @ 97.99, 146 households @ $475.
No 1,544 employees @ 97.99, 400 (!) households @ $475.
Households are doubled for "No" because a second 40B building was assumed, so you'd want to decrease this accordingly.
This is a pretty convoluted calculation that relies a lot on statistics the RKG analysis didn't flesh out.
"Education Costs"
Obviously, this is going to be the most interesting statistic in this table, because it absolutely torpedoes "No" according to what's displayed. $4,164,378 for "No", but $839,332 for "Yes."
Half of the "No" education costs are from the "Second 40B" that was tossed in for good measure, so it should be reduced drastically.
The author calculated education costs by projecting the number of school-aged children and multiplying it by $16,141. He arrived at a marginal cost of $16,141 per student by taking our current education costs and dividing them by our current enrollment.
For annual costs and students, as of 9/7/22
Nashoba District $14,591,571 988 students
Minuteman $2,285,510 59 students
Norfolk $55,000 2 students
TOTAL $16,932,081 1,049 students
To project the number of students, he took "School Aged Children" multipliers from the RKG Associates analysis.
RKG is exceptionally murky about how these multipliers were created: they admit they created them in-house based on their own observation of 1460 units. They're statistics for rental units, not intended to be applied to for-sale units.
Applied to the existing town, the RKG statistics would project us to currently have an absurd number of enrolled students, and at $16,500 per student, our education budget would be more than double our FY2022 town budget. They do not appear to be reliable.
A National Association of Homebuilders (NAHB) economist calculated much more reasonable multipliers using 2015 federal survey data. Applied to our existing town, they create a reasonable ballpark estimate of how many children we actually have. (Around 1150, when we actually have 1049 enrolled.)
The Finance Committee table projects there would be 128 (!) students in each 40B building, which results in a massive student cost value. However using the multipliers that accurately project Lancasters existing enrollment, we'd expect 44 students, not 128.
The number of students in the Finance Committee table is absurd.
"CPA"
The author calculated the CPA surcharge that would be collected: 1% of assessed taxes.
Conclusion
If you're skeptical of the Finance Committee analysis (and I think you should be), at least adjust it by removing the second 40B project and using reasonable student multipliers.
That leaves plenty of other numbers to quibble with but gives you more reasonable values for the two options.
Yes $3,908,770 net benefit
No $2,209,937 net benefit
Not outside the realm of reasonable expectations: "No" avoids the incursion into residential and conservation land, but reduces the possible industrial buildout. It reduces the amount of truck traffic, at the cost of less possible revenue. The 40R residential buildings (146 units) are omitted and we assume the Capital Group builds the 40B they threaten, but the costs of either would be assumed by the revenue from the other construction.
Neither "Yes" nor "No" would be a fiscal calamity, and it should never have been portrayed that way: with reasonable numbers, both could result in more revenue for the town.
Hopefully, this helps you weigh the pros and cons of either choice.
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