Fiscal Impact Report
7.0 Commercial Component
To this point the analysis has focused on the cost and revenues of the residential component of the proposal. However, phase one of the proposal also contains 36,000 square feet of commercial development.
Regional averages for service cost of office and retail development range from 15 to 35 cents per square foot. For the purposes of this report we are using an average of 25 cents per square foot. Therefore, the 36,000 square foot commercial component will have a municipal service cost of approximately $9,000 per year. Assuming a taxable value of $60 per square foot for the new commercial development yields an assessed value of $2,160,000. At said value and the $25.82 tax rate the commercial component yields $55,770 in annual taxes. Subtracting cost from taxes yields a net return of $46,770 per year as a net fiscal return, a revenue ratio of 0.16; a value within regional range for similar commercial development.
© 2002 The Mullins Company
