Northshore has lost $1,200,000 per year for many, many years. This loss was incurred by turning down two developments that should be well underway by this time. This loss was only incurred on 117 acres of the 1,000 acres in Northshore. These two deals were partially turned down because of protecting The Homestead, which was much more palatable to our ex-city manager. The main reason cited for the denials were that the land was to be saved for office and warehouse development. The Homestead had the Form Based Code. You can put any number you want on the other 883 acres.
The proposed partnership agreement with a developer on the 100 acres east of the Community Centre would have lost a minimum of $2,800,000 on the land value, plus the income difference between land valued at $200K vs land valued at $3 million..........calculated at 6% equals $168,000 per year loss in income for 95 years. This would total $15,960,000 plus the $2,800,000 lost on the land value. The loss of $18,760,000 , plus any tax abatement is not real good long term planning. This deal did not quite make it to a city council vote.......but it sure was close. It was the structure of the deal that demonstrated just how shaky the real estate expertise used to structure Rowlett's deals had been. It was a scary revelation to a real estate person.
The Villages of Rowlett is a good project, but we will lose $11,000,000 spread over 15 years, and the meter is still running. Yes, you read correctly. It will be 15 years before Rowlett receives any tax revenue from this project. The hope is that this project will sire other development. Which is okay, if the tax abatement guy doesn't get stupid again. However, it must create a lot of new business to overcome a $11 million give away.
That leaves us with The Homestead of Liberty Grove. This should be a pretty nice subdivision, and the city doesn't have much invested. To the best of my knowledge, the only "give away" is the forgiveness of the impact fees for each house. This amounts to about $3,000 per house, but we'll have the money back in about three years per house. I can live with that deal. However, the gamble here is marketability. This is a new product with new rules. It will be nice, but may not appeal to everyone. How many? Don't know. The jury is still out. However, if the product is not well received by the marketplace, this experiment will cause additional woes for Rowlett, not to mention the loss of income from projects that were turned down in favor of this one. At this early point, no losses are contemplated for this project.
So, what is our recent history of tax base nurturing?
Project . Gains Gifts Losses
Northshore (only 117acres) $1,200,000
100 Acres east of Community Centre $18,760,000
(never approved, but worked up)
The Villages of Rowlett $1,600,00 $9,400,000
Homestead of Liberty Grove $0.00 $0.00 $0.00
$0.00 $1,600,000 $29,360,000
The above is not exactly what the city is out of pocket, but it's certainly indicative of the real estate logic that's going on around here.
So......what's the hot topic around here, now? Tax increases and lowering Senior exemptions. Well......no s*#t, Dick Tracy.!!! Imagine that!! Who would have ever thunk it?