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Home My WebLink About1998-10-21 PACKET 04.R.REQl3E5T �F CITY CCSUPdCiL .4CTIOt� COUPlG6L AGEhiDA MEE�"ING ITEt�A DATE 10/21 /98 � � PREPARED �Y: Cammuni4y C7evelopment Kim Lindquist ORIGIN,4TING DEPARTMENT STAFF AUTNOR «a.�.�gse4aa4.....��::�..tQ.�a.>�k.«A��.��.4,� +� . � . � Receive draft information on fiscai impact analysis. : t „ •'. :' � • • � ADVISORY GOMMISSIOtd ACTION ■ ' ■ ' � = �' ■ "` '`-� ' ' � � . .. ■ • • � . �. i ..�. ,� ►,� � ■ � ,� � REVIEWED ❑ ❑ ❑ ❑ ❑ ❑ ❑ � - . . .. .. -. � • •; • s; �.* . - � � �� • , . � •� • : s ,� . • �� :�. . � � � a APPF20VED ❑ ❑ ❑ ❑ ❑ ❑ ❑ DENIED ❑ ❑ ❑ ❑ ❑ ❑ ❑ sd � _. �at� ��,�m.��g�*.a��a��e��g��4��.�g cou�ci� a�rao� �ra�e��: ❑ a�P��cav�a (� ��r�� ❑ c��r��z . MEMORANDUM T0: FROM: DATE: RE: Honorable Mayor and City Council Ryan Schroeder, City Administrator Kim Lindquist, Community Development Director October 19, 1998 FISCAL IMPACT ANAIYSIS + i ��1 �'cLfi� BACKGROUND The City is participating in a fiscal impact analysis for the community which is being conducted by the Met Council. Regio�aily, the Met Council has chosen six communities and two school districts to try to assess the economic impacts associated with growth and differing kinds of growth. As background, the City is approximately 38 square miles and presently has a popu{ation of 31,000. The City is approximately one-third developed at urban densities and has pockets of existing rurai residentiai development. Over the long term, the City has been designated as one of the growth areas under the Met Council Regional Growth Strategy. It is estimated that another third of the City may be brought into the MUSA within the next 20 years. The City has developed two growth scenarios to be used for the fiscal analysis being con- ducted. The household growth scenarios use a current trend projection and a higher growth projection. Similarly the economic growth scenarios reflect existing commercialt industrial growth trends and one that reflects an increase in growth. In all cases, the growth projections are plausible and are somewhat dependent upon economic factors such as interest rates and housing prices within the metro area, as weil as the availability of land within the region. Due to the uncertainty of the future land use on Grey Cioud Isiand, this portion of the City has been deleted from this fiscal impact project. The Island wili be reviewed under a separate fiscal impact study in cooperation with Washington County and Met Council. HOUSEHO�D ESTIMATES Slow Population Growth Over the last several decades, Cottage Grove has experienced somewhat steady growth. Rule of thumb is that the number of new housing units has been around 300. In actuality, new housing starts have hovered around 300 but only surpassed that number during 1993 and 1994. More recently, new housing starts have been decreasing. This change may be due to the current inventory of new lots within the community and the control of available (and for development in the hands of a few development companies. The siow growth scenario (200 Fiscal Impact Analysis October 19, 1998 Page 2 new units per year) continues the lower new household trend, recognizing that the current City policy is to have stable and orderly growth. Further, the reconstruction of Highway 61 and the Wakota Bridge within the ne�ct decade may discourage new residents into the community until their completion. Some upturn after that time, around 2008, may occur. To arrive at the slow growth strategy, staff reviewed the non-MUSA 2020 area and the perma- nent agricuitural areas to assess how many units could be located wifhin their boundaries at a 1-unit to 40-acre density. This density is consistent with the Met Council Growth Strategy for urban reserve areas and permanent agricuitural areas. Staff found that approximately 64 agricultural lots could be created and about 40 rural residentia� lots. Under the slow growth scenario, it was estimated that approximately one-third of the agricultural lots would be created by 2020, which averages to one new agricultural lot per year. It was assumed that almost all rural residential lots, at the one unit per 40 acres, wouid be created by the year 2020. All other unit increases were put into the MUSA and future MUSA areas delineated in FAZ 4. Higher Population Growth The high population growth strategy wouid recognize an increase in the number of dwelling units from the existing condition. A new household unit count of 312 units per year was used under this scenario. Although this househoid increase is higher than that experienced in 1997 and 1998, it is consistent with citywide growth experienced in the eariy to mid-1990s when combining single and multi-family units built. Under the higher growth scenario, the number of units availabie within the agricultural area, FAZ 2 remains unchanged at 64. However, the growth projection was increased to two-thirds of the capacity, or 40 new residential units created. Likewise, the non-MUSA residentiai development also increases. The staff assessed the number of units which could be developed within the non-MUSA area if development occurred in a manner similar to the River Oaks development. That subdivision, including open space, developed at approximately one unit per five acres. llsing this density over the available land within FAZ 4 led ta 360 available lots. From staff's perspective, this number appears high and so staff estimated a totai of 208 units Fiscal Impact Analysis Odober 19, 1998 Page 3 created in the ne� twenty years, or approximately 10 per year. The remaining portion of the 312 units is put into the designated MUSA and future MUSA expansion area. ECONOMIC GROWfH ESTIMATES Methodology Under the economic growth strategy, FAZ 1,3, and 4 are the oniy ones impacted. The employment trend estimates were derived through a series of excel worksheets. First the various zoning dis- tricts were divided into four categories: o�ce, retaii, light industrial, and heavy industrial. In each category, the total available acreage was researched and then it was multiplied by the maximum building coverage permitted under the zoning. The product was the total amount of square feet that could possibly be deve�oped under existing land use designations. Next, assumptions were made on the annuai amount of square feet to be absorbed. The low estimate used existing trends and assigned the foliowing values: • 1,000 s.f. absorbed annually for office • 5,000 s.f. absorbed annualiy for retail • 20,000 s.f. absorbed annually for light industriai • 20,000 s.f. absorbed annually for heavy industrial The high es6mates assumed a fast absorption rate: • 8,000 s.f. absorbed annualiy for office • 15,Od0 s.f. absorbed annually for retail • 200,000 s.f. absorbed annually for light industrial . 6d,000 s.f. absorbed annually for heavy manufacturing. Fiscal Impact Analysis Odober 19, 1998 Page 4 After determining the annual absorption for each land use, the employment growth was then cal- culated using mul6piiers suppiied by the Urban Land Institute. Each land use designation was transposed irrto a workplace type: office, retail saies, light industriai, and industrial service. The annual square foot absorption was multiplied by its carresponding workplace type multiplier and an annual employment number for each category was derived. This calculation was completed for both the low and high economic growth scenarios. Low Projection High Projection Once an annual employment figure was determined, caiculations for each fiscal impact zone were completed. Using the base annual employment for each fiscal impact zone, the trend was spread equally over 20 years in 5-year increments. The timeline had two assumptions: In 1999, Renewal by Ar�dersen would add 150 empioyees, with the remaining 150 empioyees hired in 2000. 2. in 2010, a commercial/retail site located at the intersection of Highways 61 and 95 would begin to develop. Slow Economic Growth The slow growth strategy reflects commercial and industrial development rates or absorption leveis consistent with the pattems established in the 1990's. The ensuing empioyment is based upon the projected commerciai industriai mix that was then appiied to the Urban �and Institute ratio of square feet per employee and calculated above. Fiscal Impact A�alysis oao�r �a, �asa Page 5 In conclusion the low economic growth estimate is 3,106 between the years 1999 and 2020. Fast Economic Growth The faster economic growth would reflect changes to the city's economy due to an increase in population and the availability of land within the metro area. Although the numbers are higher than that experienced by the City previously, the forecasts are reasonable under a growth scenario. Again, employment figures were derived from the Ull ratios as demonstrated in the tables discussed in the Methodology Section. Employment Projection for Fiscai impact Study Annual Empioyment per Faz - l.ow Estimate Employment Trend Low Estimate Empioyment Projectio� for Fiscai Impact Study Annual Employment per Faz - High Estimate Employment Trend High Estimate Fisca! impad Analysis October 19, 1998 Page 6 The higher economic growth estimate reaches14,947. Interestingiy, in each of the four land use categories (retail, o�ce, light industrial, and fieavy industriai} the available land is not fuily absorbed by 2020. GONCLUSION After completing the economic growth analysis projections, it can be concluded from each scenario that empioyment growth in the community will exceed the originai projection provided by the Metropo�itan Council. The figures derived by Cottage Grove staff are most likely a truer representation of the community's growtn potential. In ail likelihood, the actuaf growth trend will be between the low economic estimate of 3,106 and the higher of faster growth estimate of 14,947. Fiscai impact Analysis Ociober 19, 1998 Page 7 High Growth HOUSING UNITS 1999 2000-2005 2005-2010 2010-2015 2015-2020 NET 2000-2020 FAZ1 403 52 52 52 52 208 FAZ2 35 10 10 10 10 40 FA23 6 0 0 0 0 0 FAZ4 9,856 1,5Q0 1,500 1,500 1,500 6,000 Total 12,299 1,562 1,562 1,562 1,562 6,248 POPU�ATION 1999 2000-2005 2005-2010 2010-2015 2015-2020 NET 200U-2020 Personslhousing unit 3.07 2.99 2.88 2.81 2.77 FAZ1 1237 269 259 253 249 1,030 FAZ2 108 30 29 28 28 115 FAZ3 18 0 0 0 0 0 FAZ4 30,258 4,485 4,320 4,215.00 4,155 17,175 Total 31,621 4,784 4,608 4,496 4,432 18,320