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Myers farm annexation could pay for itself

(1/18) Of the three annexations presented to Thurmont commissioners last fall, the most contentious has been the Myers farm north of town. It is the largest of the three requests, the only one to include commercial/retail space, and the one that led to the creation of an advocacy group to oppose it.

The Myers farm stands out in one other way. It is the only annexation that could pay for itself, according to information from the state of Maryland.

The formula

The Maryland Department of Natural Resources Web site notes that residential development does not generate enough in tax revenue to pay for additional services needed. One such reference is part of a curriculum developed by a large group that includes the Maryland Department of Planning, Governor’s Office of Smart Growth, Chesapeake Bay trust, the United State Environmental Protection Agency and Frederick County, among others.

Using Frederick County-specific information from the American Farmland Trust, the exercise allows for comparisons of different developments or communities to see which are a likely revenue stream or revenue drain to the local government. Using this formula, the Drees annexation would cost $3.31 in lost revenue per acre and the Lawyer annexation would cost $1.63 in lost revenue per acre. However, the Myers farm request has the potential to generate $9.43 in revenue per acre.

“The American Farmland methodology is the best out there, but they still have a bias, which is they want to preserve farmland, and it’s still incomplete,” said Denis Superczynski, a county planner who also helps Thurmont with planning and zoning.

The problems with the formula

The American Farmland Trust information shows that any residential development will not pay for itself. However, the number is not nearly as high as some studies put it. Frederick County information lists residential development costing $1.14 for each dollar generated. Some studies have quoted much higher numbers; others, much lower.

“It’s impossible to have a generic number that addresses all development,” said Superczynski. “It does more harm than good. It depends on where you live and what your baseline is. Every development is different and every government is different.”

Superczynski uses the example of fire and ambulance companies. They receive operating revenues from county fire taxes. As population increases, fire tax revenue increases as well, but it is used up to service additional people. The town, on the other hand, raises capital costs, and it is easier to raise money from 7,000 people instead of 6,000.

“The problem with these studies is they really don’t look at all the costs and benefits and they can’t,” Superczynski said.

Other services, such as home healthcare or meals-on-wheels, operate more efficiently the closer residents live together.

While showing that residential growth doesn’t pay for itself, the American Farmland Trust shows that commercial/industrial growth and open space/farmland growth does pay for itself. In Frederick County, each dollar of commercial/industrial growth only costs the town 50 cents; for open space/farmland, each dollar in revenue costs the town 53 cents.

“At the end of the day, you end up doing pretty well with commercial/industrial, which is why everybody is chasing it,” Superczynski said.

The Catoctin Area Planning and Preservation Association opposes all of the annexations before the town. Thomas Cromwell, one of CAPPA’s founders, said his group thinks there needs to be more commercial development in town, but not necessarily on Route 15.

“Commercial inclusion is an important part too, but it should fundamentally support the existing town center,” Cromwell said.

As for the overall results of the exercise, Cromwell said there is more at issue than revenue and cost. “I think the big issue is what the long-term cost will be,” he said. No one has addressed to CAPPA’s satisfaction what will flow into Owen’s Creek, how much the water table will be drained or the traffic access issues, among other concerns.

One big problem CAPPA has with the proposal is that it is outside of the current and proposed growth boundary.

“Why work months on developing a master plan when you’re just going to go develop outside of the boundary,” Cromwell said.

Understating the benefits

Tom Hudson is developing the Myers Farm. He was pleased that the proposed development showed a positive gain for the town.

“This is one of the reasons that we did a fiscal impact study,” Hudson said. “It showed that the development would be a net benefit to the town of $85,000 a year.”

Hudson believes the American Farmland Trust numbers may even understate the development’s benefit because they haven’t been updated in a number of years.

“Housing values are up 8-15 percent a year,” he said. “Costs haven’t gone up nearly that much so the revenues are outpacing the costs.”

Why Myers farm could pay for itself

The Myers farm proposal showed a positive impact on the town because of the planned use for the land.

Myers Farm is the largest of the three annexation requests, and it also has the largest amount of open space. Also, when the open space and commercial area are added together (land uses which pay for themselves), they make up a majority of the annexation.

Other factors

This information is not presented as proof that one, or any, annexation will pay for itself. It is presented to show that the methodologies behind the numbers vary widely and that while overall one conclusion might be reached, a different conclusion might be determined for a specific project.

“Quality of life issues have to be considered, too,” Superczynski said. “There’s also the housing mix to look at.”

He pointed out that certain types of housing include more children, placing a greater strain on schools which adds costs that must be factored into any equation.

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