Lots of talk about economic development in Derry and the kinds of businesses we would like to have and cultivate in our town so that we may begin to turn the tax ratio of residential/business mix in line to a more reasonable shift of tax burden off of an already high residential taxing.
Simply put- We need more business in town if we want taxes to go down.
Right now the town is in round table discussions about what we would like to see.
Some say the answer is Bio-tech companies coming in, others say medical jobs is where we need to concentrate and others simply say the town should not go after "big box retail stores"
Its very easy to say we want the best and we want the highest paid jobs here in Derry and we want medical jobs when we see that surrounding towns are going after these very same medical jobs.
Londonderry now has Elliot Hospital facilities and they want these jobs, Manchester announced major medical planned business for the old Jac Pac area and so it goes that Derry again will be competing for these jobs
But what about retail- There is a big movement in Derry to discourage big box- watch and see how they come out slamming against it.
Don't we realize that we should go after all of it-what ever we feel that will bring in jobs and commercial tax base.
Should we focus on future forecasts of what opportunities await the New Hampshire economies? If such a report was out there, should we not look at it and prepare?
Here it is folks http://www.nhes.state.nh.us/elmi/pdfzip/econanalys/Look_forward/lookingforward.pdf
Take a look and see what the experts have to say. You will be surprise to learn that retail business is a high growth area. And if we rule it out and concentrate on bio-tech, other towns will beat us to the punch and we'll have nothing. nothing but high taxes.
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63 comments:
Damn it BC...now i am in hot water with my wife because we are late to a dinner party!! The report you posted caught my eye and I found it a compelling read. This is a terrific template to guide any furture economic discussions. Sure, some of it is already out of date. Some of it has run it's cycle, but that only goes to show the adaptive response required in today's economy.
Great work BC, on point and relevant. I hope others take the time to read it.
Why was this document not brought forward by any one of our numerous state representatives? We do still have one don't we?
anon 9:06,
We actually have 11.
A quick question for you BC... Would a 50,000 square foot "big-box-store" pay the same taxes that a 50,000 square foot "bio-tech" company would pay?
From that report:
"New Hampshire is well positioned in the region as a lower cost alternative to
expensive metropolitan regions to the south. Its workforce is skilled and well educated. Its
postsecondary schools are able to respond to changing workforce needs. New Hampshire
residents are highly entrepreneurial and flexible enough to take advantage of whatever
opportunities are presented in an ever-changing global economy."
There is our advantage.
d3,
Good question. I know that taxes are made up of two parts. Land value and building value. To look at building value one must see sq ft and type of building. Although when comparing comps you should find like same type of business to get an actuall true value.
If there were two buildings exactly the same, one housing biotech, the other Target, would the taxes be the same? Or does the occupancy actually affect value?
D3,
Both but at different weights. Mostly building and land but type of business does have some weight in assessing taxes. Assessing is not a black and white process. It is a complicated and emcompassing one. This is why you have professionals and have state oversight. If it were easy, real estate agents could give you these values. ( alot more detail than one might think) So answer really is both but I don't see a huge delta between the two if building and land is the same
BC- I will give you the benefit of the doubt and suggest that you were being lazy in your response to D3. (It happens to all of us.) D3 had a great question. Five minutes on the Internet tells a revealing story. WalMart in Derry shows as being 120,077 sq foot of building. It is assessed at $6,199,800 or $51.63 per square ft of footprint.
Parkland Hospital has a footprint of 92,925 sq ft. and an assessment of $19,672,100 or $211.70 per square ft. That's four times the valuation and four times the taxes per sq ft of the big box. Even if you count the sq footage of the second floor of Parkland the valuation is $141.85/Sq Ft or almost 3X the big box.
I suspect Parkland pays a little better than WalMart as well.
with respect, exactly how many floors does Parkland have?....they do have a working ground (basement? floor too....
all this discussion is great and leads right to my original point...we need to agree on our inventory of assets first, then I think the "vision" is much easier.
as these post would indicate, i think agreeing on the inventory, by itself, could take several workshops....
The assessment shows 2 floors for Parkland. It shows a first floor, a finished second floor and a slab. (no basement) Combined Sq Ft = 138683, $19.7MM valuation before land ($2.7MM in land) They are Derry's largest taxpayer. I don't think anyone else is even close.
As to our assets, there seems to be a lack of clarity as to how Derry earns a living and what skills are present. That information would be a useful starting point. I think we might all be surprised at the skill base already out there. I mini census survey to a couple of thousand households (cost $1000+-) might answer that question. Some see Derry as Blue Collar, others see it as very techie... commuters going to Rt 128 and into Boston. The skilled workforce is I believe our strongest drawing card.
Theres many spectrums to economic development.
Click Here for others approach to Economic Development
We need an experienced, degreed economic professional to provide insight.
What a shame you let The tee-shirt factory go-that was most likely alot of local $ going back into Derry's economy.
annon 3:44,
i totally agree with your very important point.
the sale of the town hall and its redevlopment to a cvs appears to have a postive impact on the tax base.is that property generating more tax revenue now that the site has been developed. it seems that this type of reuse of town assets to increase the tax base is the kind of development that is needed.was this a gain in tax revenue?are those numbers available
The CVS is assessed at $1.4 million. I think they paid the town about $500k for the old townhall. Of course Evans gas station had also been generating taxes for the town. I don't know how much but $500k assessment might have been about it? Bottom line, yes the CVS is a positive addition from the perspective of economic development.
What do you think we could get for the new municipal center? (just kidding...mostly)
anon 7:24,
To answer your question about CVS. The assessed value is 1,468,400. Multiple by 22.15 and taxes raised are 32.5K year. When the town owned it- it payed $0 for taxes. So you are correct, we gained on that one.
We also just sold the old Public Works Garage for 525K to a Boring Company. When they start using this land /building it will bring in some tax revenues as well ( non residential)
Personally I like the idea of attracting healthcare and biotech to Derry. My concern is that we may not have the appropriate infrastructure. Also, if these companies move to Derry, we see may see a rise in families moving to Derry as well. How will this affect our school taxes? Will these biotech facilities bring in enough tax revenue to offset the new homes with 2 or 3 kids each?
I don't know the answers. I look to this blog as one avenue to try and get some insight.
I will never hold a job at one of these proposed facilities.
As a resident of Derry, who plans to be here a while, I would almost rather see a box store that my family and neighbors could use. It would be much easier to be able to stay in Derry and shop for the items I need. Having to drive to Manchester, Londonderry, or Salem is not very convenient, especially with the cost of fuel these days.
Maybe our leaders shouldn't focus on one of these ideas, but try to encompass all of them to some degree.
In the past I had mentioned building "up". I was criticized for thinking we have 4, 5, and 6 story building. It was mentioned that they don't fit or belong in Derry. I still think that might be the key. Also, why don't we require new office buildings to build underground parking garages under their new buildings? This may save some acreage for more buildings, more tax revenue.
why is the cvs assesement so low?
In the last ten to fifteen years, conventional economic development, organized
around real estate development and subsidies to individual firms, has been
challenged by new ideas - but not in Derry.
Quality of place is important to people who work in innovative and high
skilled industries so the new agenda should be about the quality of life in
Derry; good schools, and recreational and cultural opportunities.
Unfortunately I think we're lacking the leadership to be able to provide innovative and fresh ideas along with the ability to change with the times.
Art and culture is very important in attracting younger, dynamic, well educated professionals.
An art festival - some cultural events that will bring people together becomes critical in economic development in that it encourages community identification
and encourages other forms of community participation, including in political life. If such events took place; people outside the community would come. If they see a vibrant downtown; a community working towards improving the quality of life; a park, a skating rink perhaps; they will take notice and eventually the entrepreneurs will settle in.
I don't believe big box stores are the way of the future. Most communities fight to keep the Walmarts out. What's Derrys philosophy; set your standards low and it'll be tough to fail?
So if the big box stores pass us by we won't be left with nothing. We'll be left with a community rich in art, culture and a firm sense of family.
anon 9:50 ---The CVS assessment is that low because it is just a box. Four walls with a roof on it. Actually CVS is high compared to Walmart. 11% of the sq ft of WalMart but 17% of WalMart's building valuation. If you want boxes, they are taxed like boxes.
D3 ---so you would rather have box stores to save you driving to Manchester than development that would ease the tax burden of the entire community?
12:57 I think you are on the right path. Clearly, big boxes bring high traffic and low assessments. We also lack the border location to be a Salem NH even if we wanted to be one.
Pinkerton plays to the educational story. As for the arts, something like the Highland Games perhaps. Carlisle MA has a pig and pepper festival that brings in people from all over the country. Chile cooking contests etc. Our current local events are nice but hardly draw from all over.
I think you need to look at the end result. Any business coming to Derry will decrease the taxes for homeowners. It's just a matter of how much.
What's the end result per house? That's the magic number. It's OK to have a few box stores. The amount of money we spend driving out of Town to go shopping over the course of the year may be equal to or more than the savings on our taxes if the buildings had been office or medical buildings.
You all talk about convenience. You think the people of Derry would want to work in Derry. Well the people of Derry also want to be able to have a life in Derry. Open a few bars/clubs. Open a few box stores(how about an Off Broadway Shoe store). Open an art museum or a skating rink. Whay don't we have a music festival. These are all good things that will make a Derry a better place.
Why is there such a strong movement to disallow these occupanices in Derry and only move towards medical\biotech?
anon238 thanks for the info regarding the cvs value,however somthing just does not add up . a review of the land sales regarding the cvs indicates, that the sales price of the land ,the old town hall,the evans gas station and the insurance building was $2,000,000+-isn't the tax assesment based on fair market value? this does not include the cost of construction. how did the town arrive at the assessed value? does anyone know the answer?
A firm sense of family - MAYBE (at least I hope so). Unfortunately, I'm also open to opposing notion - what is the divorce rate in Derry? How does Derry rank in regards to single parent families?
But Derry NH as an art and cultural Center???????????????
That's a longer stretch than us becoming a biotech meca.
I happen to think SOME people who
are propossing the absurdly unachievable are doing so for a calculated reason - they don't want any growth at all.
Since I usually take my facts from the source, and not second-hand, I read the report linked above.
Quoting the report, "The occupations expected to grow at the fastest rate are Home health aides, Network systems and data communications analysts, Medical assistants, and Computer software engineers (applications)."
It then goes on to state that, "Projected to add the most jobs are Retail salespersons, the largest occupation in the single largest industry sector in New Hampshire by employment (Retail trade), and Registered nurses, the largest occupation in the third largest and rapidly growing healthcare industry sector."
What can be concluded from this?
1. Medical (Registered nurses, home health aides, and Medical assistants) is a good area to target.
2. High-tech (Network systems and data communications analysts, Computer software engineers) is a good area to target.
3. Retail is a good area to target.
Many people within Derry commute many miles to Medical and High-tech jobs in Massachusetts. So you already have the employees. Having those jobs within Derry would create a more vibrant town, since people would actually work in downtown, and could actually spend money in town during the day.
The report also says, "a struggling Massachusetts economy may dampen
growth in New Hampshire." This suggests that the Medical and High-tech companies that are currently in Massachusetts may have a tough time. Therefore, this is a prime time to attract these kinds of businesses.
Conclusion: Looking at what the experts say (thanks Brian for bringing the report to light), we cannot afford to not look at Medical and High-tech industries!
anon238
You may be missing the value of and cost of demolition of the old buildings.
No anon 8:55, the people proposing "absurdly unachievable" goals are not "doing so for a calculated reason" The reason they are doing it is they cannot calculate.
anon 10:27,
Like I said in an earlier response post. Why can't we try to attract it all. If ratail is a high growth area as well- should we not go after it. You read the report and hit it on all the major points! You summarized perfectly and make great points as well.
anon, 5:54,
It was not a case of Derry letting the t-shirt company from leaving. As I pointed out in the round table discussions, Derry has commercial/industrial buildings that can accomadate up to 25K sq ft. ( perfect for a starter comapny) but when the company grows from success and wants to add jobs and more equipments- Derry does not have larger buildings to accomadate them.- This is why they left to Hudson. If anything, we need to make sure we learn from our mistakes and talk to these businesses more and locate/find buildings for growth.
Derry could probably be whatever you want it to be. There are alot of box models on economic development out there. I believe some of the passages that Anon 12:57 mentions comes from a study done out of Cornell University on economic development in small to mid sized towns in New York. Art and culture does become important if you want to attract young, educated, higher income people.
There's alot of other factors other than dollars added to the tax base when considering adding big box stores.
Retail/Econimpact
BC- We are a small town with limited resourses. Just as a small company must focus its resources to achieve its goals, we must focus as well. We should not give the new development person the mandate to chase any opportunity that strikes his/her fancy. If we want Boxes we must focus on getting boxes. If we want something else we must focus on that.
Anon 8:23 You are correct that art and culture play a part in decisions as do schools, safety, environment, affordability of housing, etc. The real question is what weights should be given to these factors?
What other factors besides the tax base do you propose in considering big box stores? (ok I'll agree traffic and opportunity costs of filling up our limited developable land with boxes vs something more valuable, but what other factors do you refer to?)
Thanks for the reference I'll read it tonight.
Anon 8:23 I read the report you cited and it certainly makes a strong case against big boxes. However, I disagree with its direction. The organization generating this study seems to be in favor of local communities fighting against the arrival of big boxes. Requiring economic impact studies... really, that's like the environmental impact study fiasco that we are bogged down in. Fighting big boxes is as bad as subsidizing them to come in to a community. I have nothing against big boxes if they pay their way like any other business.
brian
could you explain why the cvs assessment is $1,400,000.the market value of this property exceeds $5,000,000.
anon 12:37 - Upon what basis do you conclude that that property is worth $5MM? I suspect that CVS would be happy to sell it to you for $4MM. It is a large empty box, not particularly expensive to build with some... get this...parking!!!!
anon 12:37,
I'm not sure. This would be a good question to ask assessing dept. Let me see what i can find out. Lets remember that the town had professional appraisers do the town wide appraising.
based on information on loop net the walgreens on crystal ave sold in oct 2007 for $7,300,000.assuming that the cvs is comparable the valuatuion of $1,400,000 seems like a mistake.does any know why this assessment is so low.
anon 1:39,
I not positive but I'm willing to bet that the 1,4M was assessed in 2006 before the building was completed and just needs to be updated. If Walgreens is over 7M then no way is CVS only 1.4M. I will see what i can find out about why the difference.
anon 1237 your suggestion that cvs would sell for $4,000,000 appears on the surface to be incorrect,the land was purchaced for $2,000,000.the cost to build the cvs exceeds $2,000,000.why any one would suggest that the current market value is only $4,000,000, based on the above facts is confusing!!please explain how you arrived at your conclusion.you should also keep in mind that according to loop net the walgreens on crystal ave sold in oct 2007 for $7,300,000.is there somthing i am missing.the bigger question once again is why is the cvs assessed at $1,400,000 this was the number that brian has provided.brian is that number correct? assuming that the current taxes paid is only $32,000 it appears that the town is losing out on substantial tax revenues.assuming that the sales price of the walgreen is correct the taxes on the cvs should be $160,000.it would seem that the cvs is worth at least as much as the walgreens.one would think that the town could use the additional $128,000 per year in taxes!!
thanks
brian
what is the name of the professional appraisers that did the town wide appraising?
anon 1:54,
You asked if the number i gave on the post for CVS is correct. I got this info on line by going to the towns website and then linking to New Property assessments and then inputting address. Its there for all to see. Please keep in mind that these numbers are from the 2006 town wide re-assessments. Not sure if they have updated recently. doubt that the new number is reflected in that number.
anon 2:00,
the name of the company that did the town wide re-assesments is Vision Appraisers. They do alot of communities not only in NH but all of new england.
Thats not to say they are perfect. However they are professional.
An interesting link to an Eagle-Trib article on both Vision Appraisal and commercial assesments.
Read the article
anon 3:51,
Very interesting article thanks for sharing! Interesting comment made too.- "We don't want to run the commercial businesses out of town" was quoted by a Pelham town official. While commercial is at 65% of market value in assessments and the residents are at 105% in Pelham. Hope this person is not running for re-election anytime soon.
I think the reason Derry does nothing to try and keep businesses here is the mind set that someone is paying tax on the building so no one cares. I watch the town meetings and that’s always some ones ace in the hole. It seems there’s a breakdown of the impact or logic of local economics.
I too am not against big box stores. What I am against is any institution that attracts low income, uneducated people into our community. With it comes increased crime, increased welfare rolls and increased town services. With the town portion of the tax base as low as it is do you think adding 10 big box stores will reduce that portion? My guess is it'll increase but at best it would stay the same; and that’s a stretch.
A community rich in culture and the arts absurd? I agree with Anon 12:57..."An art festival; some cultural events that will bring people together..in that it encourages community identification and encourages other forms of community participation, including in political life." Absolutely! Let’s get the kind of people that are interested in these functions involved and engaged. You'd probably be surprised to see municipal voter turnout increase.
Successful economic development requires a vision of the future and keeping up with the times. While I have the utmost respect and gratitude for our servicemen and women we're losing about the only green space we have to war memorials (proudly I have four family members on them). And although Derryfest may have had its place in time it needs to retire and be replaced with perhaps a scaled down version of the Mt. Sunapee fair.
The main street offers a wonderful draw but not in the condition it’s in. In 16 years no one could manage to have the Broadway Pets sign taken down?
Walmart customers average income is below national standards, Targets is above and Nordstroms well above. Walmart chose Derry ten years ago and ten years later they’re looking to expand. What’s that say about our community?
People make decisions by comparing costs and benefits at the margin. But let’s throw out those impact studies and keep our fingers crossed that we’re the exception. It hasn’t seemed to work for us in the past but...
Keep up the bantering back and forth. In the meantime Amgen, Genentech and Genzyme won't be coming to Derry anytime soon.
With all this wishful poetry of biotech, wine shops, & jazz mecca fantasyland, I just heard that a Kentucky Fried Chicken and Taco Bell are going up in front of Shaws in Londonderry.
My guess is that those wouldn't be near the top of the list for the goods folks in Londonderry.
But guess what --- after you put the infrastructure in place, you have very little control.
I beleive that the Blackberry Bakery will be moving to the new plaza being built by Mr. Steers in Londonderry, across from Mr. Steers' current location. This plaza is supposed to have Mr. Steers, Blackberry Bakery, a fish shop, and a wine/cheese store.
I wish Derry could get quality shops like this...Maybe I'll ask Santa Claus.
If accurate, what did the Town of Londonderry do to entice Blackberry away?
Were phone calls made? Maybe a dinner meeting, A tax abatement (nope), maybe it was Mr. Steer, not the Town of Londonderry who is aggressively pursuing a marketing vision....and/or maybe the Town of Londonderry did nothing but implictly provide a more appealing infrastructure.
If accurate, maybe the last few posts show that sometimes you'll get Taco Bell and sometimes you'll get that shop that's more appealing.
All I know is that we're losing a great business to our neighbors. At least now I won't have to try and parallel park my truck when I'm picking up pastries.
I wonder how many of our downtown businesses have actually heard from Jack Dowd and the DEDC?
Best thing the town council has done is to cut it's losses by letting them sink or swim.
Now, based upon the recent economic meetings people I know think that the DEDC is setting up to come back for more public funding?
If true, what more proof does one need that this group can't get anything done, even with taxpayer money.
They may be well meaning people(even this is questionable to many)but it takes more than good intentions to get something done. Broad based, diversified economic development is clearly beyond the DEDC's abilities. The DEDC has had over a decade of time and hundreds of thousands of dollars to prove itself, sad but true, it has failed.
Chairman Bulkley it's not time to change course back to the DEDC. Even you as council liason to the DEDC never provide the community updates on their activity, except of course the occasional smoke screen where you put forth that they are hard at work. Mr. Bulkley, where are the results? You too are being measured and putting good money after bad speaks for itself.
The DEDC is in over it's head, best you Mr. Bulkley take your head out of the sand too. Absolutely pathetic.
Annon 6:21,
You are wrong on this point, it is the DEDC that "cut losses" and declined money this year.
You apparently are in the crowd that says "no DEDC, no matter what".
I think that closing the door an any business group is wrong - there should always be a set of conditions which we will conduct business with them - if those conditions are not acceptable to the DEDC, then so be it.
To take a different position leads me to beleive that personalities play a part in your thinking. Do they?
As far as Mr. Buckley, who is doing an outstanding job, do you hold the Liason to the Consersation Commission and the Heritage Commission to your same standard? Do Carney and Fairbanks ever, as you say, "provide the community updates on their activity, except of course the occasional smoke screen where you put forth that they are hard at work."?
anon 8:20,
I heard through the grapevine that it is from a landlord-tenant conflict that the business may leave. Nothing the town did or could of done. My understanding is Londonderry did nothing out of the ordinary to "take away a Derry business". Somethings are just not controlled by the town. Lets see what happens
6:25 if a vendor has failed to deliver for many years, it is a reasonable business decision to cut them loose no matter what they promise for future results. No personalities need be involved.
Here's a shocker to some --- the $60K per year we were paying them does not allow us to hold them accountable for economic development in Derry. $60K, fully burdened with overhead doesn't buy much, let alone a marketing budget.
Yet there probably wasn't enough specificity in the arrangement with them.
If you think I'm off on this --- what do you think would happen if we put this service out to bid ---
"You will be held accountable to the economic growth Derry, NH"
My guess is that the lowest responsible bid would be around $250K.
Blamming the DEDC for the Town's attempt to do it on the cheap is placed wrong.
A lot of people seem to have issues with the DEDC. I for one think that there is a place for a group like this in Derry, to assist the Town of Derry with economic development.
And seeing as there is NO other group in Derry to help the Town, we should let them help us out. If we had two groups in Town, both could help the Town.
If all these people that are against the DEDC wanted to do something positive and constructive, they should look to form their own economic development group. Maybe they could show us all how to "do it right"... and with zero funding from the Town.
True leaders want to be a part of the solution, not the problem. The problem here is all the nay-sayers once again shining a bad light on Derry by constantly criticizing civic groups. I'd be willing to bet that corporations and developers all read the papers too.
Not that the polls on this site are at all scientic, but clearly there are currently twice as many people in favor of box stores than there are people against them/not sure.
ANNONYMOUSES UNITE!
LET'S GIVE D3 A BIG COLLECTIVE ANNONYMOUS HUG FOR PERHAPS THE MOST PROFOUND STATEMENT THIS BLOG HAS EVER SEEN:
"True leaders want to be a part of the solution, not the problem."
WELL DONE SIR.
Maybe if we had 7 true leaders, instead of 5.5, we'd have a solution.
I'll let you decide who the 2.5 are.
anon 8:01...in your post you state that 7 minus 2.5 equal 5.5. now that sounds like DEDC accounting to my ear.
just a suggestion 8:01, before you ask others to "decide who the 2.5 are" you may do well to pay closer attention to details and less to townie slipshod political rhetoric and arithmetic. yikes.
anon 8:56 I don't think you should make fun of the quantitatively challenged. The fact that a large part of Derry’s leadership cannot do math is not a laughing matter.
anon 10:31...i am not making light of derry's quantitatively challenged. i am only pointing out that anon 8:01's post rings of dedc math, for example: 7 total equals 5.5 for dedc and 2.5 for taxpayers. say it long enough, say for even 10 years and some people actually begin to believe it.
as for our leaders, i suggest that you trust the judgement and quantitative prowess of chairman buckley and the council majority. to do otherwise could be construed as micro-managing.
Please put up a new thread re: last nights council meeting.
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