In a recent column titled “Prior Lake has options for new development issues” on the opinion page, the writer is responding to a recent state Supreme Court ruling and its effect on local taxpayers. One needs some questions answered before accepting the estimated loss of $25 million because Prior Lake can no longer charge a developer $6,549 per buildable acre of the remaining 3,755 acres left for development in Prior Lake for miscellaneous road improvements that might be needed in the future. For instance:
1. What percent of the 3,755 acres are wetlands and cannot be built on?
2. What percent of the land will be devoted to walking trails, parkland or left as green space?
3. What percent will be devoted to single family homes versus multifamily units?
4. What percent will be devoted to commercial use?
5. What will the taxable value be on the structures built on the various parcels of land?
6. How many houses per acre?
8. How many years before all 3,755 acres are developed?
9. How much more tax revenue will the school district, city and county be taking in each year as the 3,755 acres are developed versus leaving the land as is?
Assuming all 3,755 acres can and will be developed, with a minimum of 2 houses per acre, it would add 7,510 homes to the city. Using information from Realtor.com, the median house selling in Prior Lake is almost $400,000. Yearly property taxes on a $400,000 home are almost $5,000. Assuming each of these 7,510 homes will be of equal value, paying equal property taxes would result in over 37 million new tax dollars per year, with almost $10 million going to the city of Prior Lake, the rest to the school district, Scott Country and Metropolitan Council, based on my own tax statement.
For individuals, politicians or city planners to think the $6,549 fee per acre placed on a land developer is not passed on to the buyer of any structure built on a parcel of land in Prior Lake or any other community is ludicrous. Homebuilders, like other business people, will pass their costs on to the consumer. Each homebuyer in the new developments will pick up a part of the total cost associated with developing the land. This includes land costs, land development, surveying, permits, fees, parks, trails, roads, sidewalks, utilities etc. on top of the cost relating to the construction of their home.
Prior Lake has options to drive the national builders out of town, drive up prices for homebuilders, price more people out of buying, resulting in stagnate growth, declining student population and higher property taxes for the existing population to maintain infrastructure and run city government, etc.
You can have visionaries planning the future of Prior Lake or reactionaries stumbling in the fog making short-term decisions that will have negative effects decades in the future. Time will tell what we have in Prior Lake.