What could redevelopment on east side yield for taxes?
With many numbers and figures coming out of the controversial topic of the Atlantic Avenue proposals and developments, none have received as much public interest as potential tax monies generated by one development – Cap’n Fish’s.
However, developer Paul Coulombe’s highly anticipated buy of the property came to a grinding halt in late October. Coulombe announced his plans to withdraw from the purchase agreement over one year from the beginning of the process after boards entertained the idea of further vetting current zoning proposals with an independent planner.
Throughout the zoning process, values for potential tax dollars in the 65 Atlantic Ave. property have been circulating in meetings, letters to the editor and by word of mouth. The most common value has been $200,000, a number Boothbay Harbor Town Manager Tom Woodin attempted to correct publicly.
The Boothbay Register reached out to Woodin and town tax assessor Robert Duplisea Jr. for facts surrounding taxes and reasonable expectations of development.
“There are too many variables to accurately approximate tax implications on a property,” said Duplisea in an email.
He also said an assessed value of $17.25 million would indeed produce about $200,000 in taxes, but that is not counting the diminished value from demolition or the construction costs.
“Some of the monies spent create a loss in value … A project may have an estimated cost, however that cost may not directly relate to a dollar for dollar value increase. When the new structure is built, it will be assessed in an appropriate manner in line with similar properties.”
In a separate interview, Woodin said Duplisea explained tearing down a hotel and replacing it with a hotel will turn around about the same value. A building’s value comes, in part, from its function, Woodin explained.
“It is not likely there is enough square footage on that lot to put in a number of different uses that would have such a high valuation that it would take it from the value it is now to $17 million,” said Woodin.
Much of the confusion likely comes from Coulombe’s development of Boothbay Harbor Country Club in Boothbay, said Woodin. When Coulombe bought the two country club properties, they were worth $2.8 million and over $21,000 in taxes every year. Today, the value of the now 182 acres is just over $36 million with over $330,000 in taxes every year.
Given available information, several questions need answering before a definite number can be produced for what future investment in the Cap’n Fish property, or anywhere for that matter, will yield for tax dollars: How does a zoning change affect property value? How will a significant increase in a property’s value affect the millage rate? What will the real estate value be after figuring in investment?
In conclusion, there is no way to tell how land value will change after zoning changes, and it is likely a new building’s value – with a hotel on just under an acre of land – will rise, but not by eight figures barring any unforeseen variables.