Lakewood Park and Pennisula Presentation

[Jim O'Bryan]

Huh?

But I don't see how the incorrect assumptions follow from your statement. You believe me to be unaware, fine. It isn't any less of a mistake, however.

Huh?



.

[Donald Farris]

Hi,
The one question not asked at last night's Council meeting that I was hoping would be was:
How much revenue could the City, Schools and Library expect from this project?

Well, here is my revised cut at estimating them:

Annual additional City revenue from Income taxes: $ 420,000
Annual additional City revenue from property taxes: $ 1,797,075
Total annual additional City revenue: $ 2,217,075
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Annual additional School revenue from property taxes: $ 5,211,518
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Annual additional Library revenue from property taxes: $ 269,561
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Annual additional County revenues from property taxes: $ 1,707,221
============================================
Total annual additional revenues $ 8,985,375
============================================



This would not take into account any support needed to construct the project via TIFs or other means.

Assumptions:

1). Average family income of new residents $ 200,000.
2). City income tax 1.5%
3). 140 new families living on the project
4). Average property value $1.25 million for each home
5). 140 new homes on project
6). Total property tax rate 14.67% (Not 13.7667%)
(Calculated from property taxes, it’s the same for everyone and on property tax web site)
7). Property tax split up: City 20% School 58% Library 3% County 19%
. In Cuyahoga County, the Level of Assessment is 35%. Look at your property on the web site. See: http://auditor.cuyahogacounty.us/repi/default.asp

On property tax no HB 920 reduction since all new property

Income: $ 200,000 * 140 = $ 28,000,000 * 1.5% = $ 420,000 per yr City income tax. These residents will need to make enough to afford the mortgage. I worked backwards to get this number.

Property:
Average Market value = $ 1,250,000
Assessed Value = Market Value * level of assessment = $ 1,250,000 * .35 = $ 437,500 avg. assessed value
$ 437,500 * 140 units = $ 61,250,000* 14.67% = $ 8,985,375 per yr property taxes to be split

City cut (20%) = $ 1,797,075
School cut (58%) = $ 5,211,518
Library cut (3%) = $ 269,561
County cut (19%) = $ 1,707,221

=============================================

Plus, we can get the Lakewood Park fixed up by the developer and we get revenues from the marina. Also, keep in mind there would be no lose of revenues from removing existing properties that are currently paying property taxes.

[Charyn Varkonyi]

I am wondering if there is a realtor in the bunch that can address whether or not we can realistically expect there to be 140 families waiting to purchase homes for 1.25 mil and up.

Because that is not my income bracket, I have no idea what type of demand there would be for that much housing at that price from personal experience, nor have I had exposure professionally.

Anyone with some development/realtor experience care to share?

TIA.

Peace,
~Charyn

[Danielle Masters]

Don, I was also surprised that no council members asked about the revenue the plan could generate. None of the council members seemed interested in the water intake either. You would think they would love to be able to get away from Cleveland and possibly make some additional revenue also. I've heard people say its just too expensive of a plan, but this city is backed into a corner financially and we need some good ideas. Savannah came up with a fabulous idea and I hope the city looks at it seriously.

[Jim Dustin]

[Stephen Calhoun]

Oh and this is no attack, I assure you.

Of course it is an attack. I guess you can't help yourself even if DL has asked that people not attack each other.

So: you characterize the person rather than the merits of the argument.

You do mention you comprehend yet mention also that I communicate unclearly. You say I beg for something. I take this as rhetorical, since I don't beg for anything. You put the onus on me and I note this too is rhetorical at the same time I reject this onus.

And you trot out something from the corporate world but offer no evidence since, in the main, you could not do so because you have no idea what I do. Obviously, here, everybody is typing out text; is 'analyzing".

I'll deal with the problem of not being understood elsewhere.

Keep attacking if you wish.

Savannah has more in her little finger, than you can hope for pal.

You think this is my weak spot? Man, if you're going to be cruel figure out where the spear fits, eh?

So, attack. On the other hand, you've been asked to reign it in.

***

it does not equate to communicating.

To you. To others...well, they can speak for themselves. To certain bright people here my self-expression is unproblematic, and, to colleagues all over the world my communication is welcomed. In fact, you could say they encourage what other persons view as my worst tendencies.

[Charyn Varkonyi]

Jim:

When one takes the approach of commenting on the person and not the content of the text, then yes, it is attacking (aka flaming in some web worlds). No amount of reasoning about why it is appropriate can change this. Another test is simply asking the question "What purpose do I hope to serve in my post?" If it is to retaliate or belittle, if it is to vent anger or suspicion, or if it is to use personal flaw to rally the support of others, then it is an attack.

You didn't like it when it happened to you, but retaliating in kind is not the answer (ditto for Stephen).

Stephen:

Was is necessary to respond? Would you not think that by repenting you are validating the poster? Even encouraging more of the same? It is always important to remember that there are no victims in flame wars - only participants.


Both:

Please note that I have voiced my displeasure and my opinion without disparaging either one of you. I have made no comments about your intellect, your family, your integrity, your style, etc. You are both entitled to your opinions; however, I ask (AGAIN) that you leave the personal attacks out of the forum. If you want to go personal - please go private.

As always, this is just my opinion and is not meant to represent the opinion of anyone but me.

Peace,
~Charyn

[Donald Farris]

Hi,
Lynn has the MBA but even I can do the math on the Return on Investment (ROI) on building the 26 acre penninsula.

Based on numbers the City of Cleveland came up with for reclaimed land (4 times larger = $200 million) we can roughly estimate the cost at $ 50 million.

ROI = $ 50,000,000 / $ 8,985,375 a year = 5.6 years.

[Phil Florian]

Could there be a "chest-pounding, all posturing" forum set up for the kind of lame interplay that threatens to derail this thread? Then the Alpha-writers can go and argue about who is the coolest and "all that" over there.

Is there any online version of the already proposed and accepted park plan? Other than hounding our elected officials one by one, how else does one make things happen on Lakewood City Council? Issue 47 was one way, though that was arguably a fight to preserve the status quo, not change it. Could that same sort of zeal be found in the citizenry again but to make some serious enhancements to our city? All without having to destroy existing properties? That is the problem with construction in Lakewood right now. There is no room to build anything new. We can fill storefronts but that doesn't really work. I live just south of Madison and I see almost monthly new stores pop into these empty storefronts only to see them gone a month later. If businesses leave and give/sell their land (Rockport, right?) then this can happen, too. But here is an opportunity that would enhance the city in the long run and I bet could get serious private investment to help pay for some of it, if not a bunch of it.

My question to those numbers that Mr. Farris posted. Are all those numbers assuming that the city doesn't give some tax breaks to people who buy or invest in the property? It seems like that is a carrot often used in development of new projects in old cities. It seems counterintutive since the selling point to the city is that tax revenue but still. Jim points out that with 100% occupancy Legacy village is bringing in 80% less than expected revenues to the city. Why is that? Would that be something likely to happen in this project?

[Joan Roberts]

Mr. Farris.

Your figures are based on your own estimates of what these projects would fetch. You are quoting Miami Beach prices. This is not Miami Beach. Is that a professional estimate from local real estate agents? Also, your figures do not seem to be including debt service (I consider TIFs debt service). I could be wrong on that, and if I am, I apologize.
There is also the issue of whether million-dollar homes would be consistent with public access to this area. By and large, the more expensive the property, the less access developers/buyers want to allow the hoi polloi. We could end up with a nine-figure project that creates new land in Lakewood accessible only to those who can afford it.
But to me finally, the question is one of risk. My guess is that the $55 million dollar number would be short by at least half, but even if it's right, Who do we expect to take on this risk? A developer? The Army Corps of Engineers (thats not a charity)? Taxpayers? I know a TIF-based financing plan is what's being dreamed of, but you just know that SOME sort of bond issue would eventually be floated. This is, after all the, real world.
The nagging feeling is coming from the sense that this is being promoted as Lakewood getting "something for nothing." Someone else assumes all the risk, and we get all the benefit. Reality check, please.
Now that this plan is "officially" part of the public record and no longer a class project, it needs to be looked at, pro and con, in the harsh, cold, clear light of day. I have my asbestos sweater on today. Like Charyn, I expect to be flamed.

[Lynn Farris]

Joan, look at the prices of homes on the Lake currently. Additionally the current home owners are extremely worried about erosion and have to pour hundreds of thousands of dollars to shore up the cliff so as to not lose their homes. The beautiful Rysar homes just being built in a much less beautiful location are fetching $414.00 according to our Mayor. And in real estate the adage is location , location, location. However, even if you take 75% of the numbers, it still makes good financial sense.

Mr. Florian, you stated:

My question to those numbers that Mr. Farris posted. Are all those numbers assuming that the city doesn't give some tax breaks to people who buy or invest in the property? It seems like that is a carrot often used in development of new projects in old cities. It seems counterintutive since the selling point to the city is that tax revenue but still. Jim points out that with 100% occupancy Legacy village is bringing in 80% less than expected revenues to the city. Why is that? Would that be something likely to happen in this project?

The numbers Don posted do not assume tax incentives. While I agree with you, the cost of developing in inner ring suburbs and elsewhere often uses Tax Increment Financing (TIF) This means bonds are floated and are paid off with the property tax, until the bond is paid off. that means that in Don's financial scenerio, the bonds would be paid off in 2 years if the cost was $50, million and the governmental organizations would start realizing the tax benefits. However, it most likely would be structured so that only a portion of the property tax went to bond reduction and the other portion to the governmental agencies (e.g., schools, city, county and library). It would take longer to pay off, but we recognized a portion of the benefit more quickly. In the meantime, revenues from Income Tax and Sales tax would incur immediately. And unlike other developments that have been proposed, we would not have an immediate reduction in property tax and income tax when residents had to be removed while homes were being torn down to make way for new development. We have no loss here.

You are right that Legacy village is not full. There are several problems with commercial real estate and my favorite is that it becomes obsolete quickly. Other developments planned had a 30 year payback, by that time the development was obsolete. This is planned as mixed use, so there is an element of retail and restaurants here. However a large component is residential and residential has a longer life. Look at how many homes in Lakewood are 100 + years old.

Now, the argument can easily be made that all 140 buildings won't occur day one and it will take some time to build and sell them all so again, we may be looking at a few additional years for pay back.

Howwever, once property is purchased, the resident pays property tax even if the property is up for sale - so we don't lose out in property tax. Granted if the resident moves, while waiting to sell, we aren't gettting their income tax, but that is the same as it is anywhere and not that significant.

Hope that helps.

[Stephen Calhoun]

Amen, Joan.

Now that this plan is "officially" part of the public record and no longer a class project, it needs to be looked at, pro and con, in the harsh, cold, clear light of day.

***

On Wednesday, February 22, I posted for the first time in this thread. I'd recommend going back and reading it but you don't have to because I will attach two remarks central to my inquiry to the bottom of this post.

Jim responded to the 2/22 post with 'huh?

Don Farris, making assumptions without any evidence, nevertheless generously offers,

"Let’s correct that. When can she go over it with you? "

(I've replied to this offer.)

Then comes a sarcastic post, again based in unfounded assumption--to which DL copped to.

However, before this DL offers a rationale for her mistake,

"I find your writing style to be incomprehensible."

but later, "It is not a simple sentence-by-sentence matter of comprehension." Implying comprehension sentence-by-sentence is not a big problem. In any case, the 'huh?' elsewhere might evoke a question.

Jim Dustin swings away.

Charyn offers interpretive material--which I find interesting--although I don't agree with this:

It is always important to remember that there are no victims in flame wars - only participants.

***

My original suggestion.

As I've suggested elsewhere, a raw inquiry begun at the level of the citizens might flesh out, literally, hundreds of smart questions about the SP.

Follow-up.

Yes, given what Don has described, I'm very much interested in seeing what the SP is in its details.

***

Ending with Joan wondering if by asking a question about concrete details she'll be subjected to flaming.

There's a narrative here and it doesn't start with any attack, and it takes a bad turn, and the question not to be answered here is: why does it go off the track?. And: does it go off the right track or the wrong track?

(Discussing the hopes and hazards of dialog is a good subject even if this is the wrong thread for it.)

[Jim O'Bryan]

Joan

We have the boards in the upstairs office and many have come through to see the project on the whole. Very few negative comments so let me be devil's advocate for a second.

Paula Reed, one of Lakewood's most in the know realtor's said she could see the homes going easily for at least $700,000, which is far below what don put there, and would cut taxes in half. But we could also look west and see what is going on in River, and Bay. $1.25 million is not an unheard of number. Especially if you throw in the Marina, and a nice little bunch of Carmel style shops. Coffee, high end boutiques, restaurants, etc.

$55 million, again a tough number to raise, but is it? As I have mentioned I have heard that exact number used in at least one development on the board. So which would be safer spending $55 million to buy up an old neighborhood(cost to purchase homes) or using it to create high end space, that adds to the city, not just land mass but value.

something I have never understood about all the plans the city and others float is the reluctance to look at "Gold Coast Style Condos" either headed west from the gold coast or along the river. They have a success rate twice as good as any mall in northern climates, and have NO negative impact on surrounding properties. The house in from of the Winton Place has not been negatively affected, look at their property values and rate they rose.

But for some strange reason, many of the movers and shakers in town seem to think only shopping, only retail can save the city. The facts would show it is the one thing that could kill the city. The peninsula is the happy marriage of both.

Can it be done, who knows, but others are trying, why not look a little longer at it.

[Stephen Calhoun]

Can it be done, who knows, but others are trying, why not look a little longer at it.

Yes! The SP should receive a comprehensive and intelligent and thoroughgoing look and be the subject of a sophisticated inquiry. Let's go for it.

[Phil Florian]

Can it be done, who knows, but others are trying, why not look a little longer at it.

Yes! The SP should receive a comprehensive and intelligent and thoroughgoing look and be the subject of a sophisticated inquiry. Let's go for it.

I agree...but apparently City Council does not. At least, seeing their lack of response to it indicates that. Taking the advice from this discussion I sent a note to my Ward Councilperson and the At-Large representatives to ask this very question: What next? The Planning person (don't remember his name) seemed to blow the project off and suggested we file it at the Library so we can (I paraphrase), "have it around so future developers can look at it for ideas." Council has all but shelved the idea. Not just the peninsula, either. This is the high point to the project, to be sure, but not the only point in it. Mr. Demro wanted to know why we are just going to go with the Lakewood Park plan that the City Commissioned for thousands of dollars for instead of considering something that looks much better. I want to know that, too, but the question was dropped and the Council moved on.

So will some random nagging notes and phone calls from a handful of citizens steer the course of their proposals of Lakewood Park so that we can look at this in, as Joan puts it, the clear, harsh light of day. So far it looks like the clear, harsh lack of day. I know Jim's point that the Peninsula can help pay for the other projects but even without the peninsula I want to know:

1) Why don't we work on getting our own water intake? Jim's friend (I can't remember his name! Sorry!) explained that if the city started this project, Cleveland water would gouge us until our project was done. So why aren't we able to encourage a private entitity to do this?
2) Why aren't we windfarming? Would this bring revenue to the city that could pay for more projects?
3) What is the current plan for Lakewood Park? Does it seem to do any of the things that she proposed? Is that plan available? Does it give us a beach? I mean, we are LAKEwood...one would think at some point we would have access to the Lake.
4) What about the other parks? One could argue Madison park can serve more locals than Lakewood Park on a day to day basis. Lakewood Park is only half surrounded by residents whereas Madison has people on all sides. Can that get a skate park? There are arguably more kids living around Madison Park than Lakewood Park, I would guess. Maybe Savannah can design that one if they are already stuck on their Current Lakewood Park plan.
5) Savannah brought up ideas that don't really cost much of anything. She encouraged more winter festival activities that would bring life to the park year around, not only when the sun is shining and it is above 70 degrees. What is being done to encourage or consider this? If anything?

Savannah's ideas weren't just about the Peninsula and the fact that Council shelved it so quickly is of concern to me.