Redevelopment of the Homestead Worksite
Introduction
The 267 acre area covered by the Homestead worksite needs redevelopment which has been long overdue. The locals’ interests lie in building an economically viable locality that can help them regain their jobs and boost the local economy. Private developers partnering in the re-development plan Park Corporation and Continental Real Estate companies see an opportunity in making commercial and real estate property investment. On the other hand, the government at large and its local arm see a potential increase in tax income to be levied on set ups in the newly re-developed section of the county. However, it has to make infrastructural funding through TIF bonds. Everything seems alright and every stakeholder anticipates some gains however; there are very many uncertainties that surround the project as a whole. The viability of the project is of great concern to the council (Hirt, 2004).
The first challenge identified is the site plan. According to Beth Watson, the planning consultant no reviews had been made on the waterfront site plan in accordance to the needs of the locality, West Homestead, Munhall and Homestead had made different zoning requirements or provisions which were not reflected in the design when Beth and Aaron were viewing the design. Instead what had been designed for all the areas on the site plan was basically similar. This can be identified as potential origin of future conflict from a utilitarian aspect. According to the original objective of re-development there was a need to have quality redevelopment with a well planned use of land for residential, commercial and office space. According to design objectives the plan was supposed to offer higher flexibility in certain types of uses as well as compatibility in visual, scale, operational and intensity characteristics (Hirt, 2004). If this was to be not fully realizable then the plan had to at least have an arrangement and positioning that would mitigate any adverse impacts on the surrounding properties. The site plan on the re-development was supposed to make a balanced design which would create a balanced design with offices, residential, retail and recreational facilities.
Park corporations revision on the site plan have nothing g in common with the interests of the locality from a utilitarian point of view. The private developer requested for changes to enhance the company’s flexibility during its development endeavors, without considerations of the actual objectives a design based on a utilitarian model that zones the re-development area into zones that enhance compatibility. Conclusively, according to Beth consultation with Aaron there is a need to have a re-design of the whole site plan so as to increase compatibility of the various units that are supposed to be included in the site. The town center’s location in the structural plan does not offer convenience with regard to the location of residential set ups. There is a need to restructure the plan and make it have a more neighborhood look by appropriate repositioning of structures. The redeveloped site generally turns its back to the neighboring communities and thus reducing accessibility and to the re-developed area. This may not work well in making a fully integrated area and community that will attract more people.
The next challenge is the Tax increment financing planned by the local government. The local government plans to issue bonds to raise the capital to finance the infrastructure. The local government anticipates a rise in property tax and taxes from other developments that may occur within this region but it is not so sure how much of the later will be realized. There is an expected rise in property tax base of about 60%, however; this is just an approximation and there is no surety. The developer as agreed to pay property taxes annually at levels which are considerably high compared to the current $ 175000 property taxes initially generated. At such a level of tax payment from the developer the local government is sure to repay the bonds and the accrued interest. But this may not be enough. The 62 acres dedicated to retail business will be mostly selling food, clothing and medical drugs all of which are not taxable under the government, thus implying that this section of the development shall contribute less to the tax base of the re-developed zones. This leaves the rest of the tax burden to other re-developed ventures that will be put up in the area. The issues of raising enough revenue to fund the local tax burden are a big challenge with regard to Tax increment financing. The population of the three zones is significantly low and the figures from income in the area suggest a very low income level per home which is a sign of the possible inability to achieve the desired development despite the implementation of the plan (Hirt, 2004). The projected earned income tax may not be realizable. The problem is coupled by the fact that there may be little gains from the project because of various factors. Firstly, there are similar projects in nearby areas within a span of about 15 miles and this implies that the re-developed area may fail to generate any new business that will attract more investors and draw people to the area. The fact that there are other 3 similar projects near the locality under Tax increment financing programs, there are chances that the area may fail to attract people from neighboring areas. These projects are actually a threat to the project in terms of attracting investment and higher populations.
Aaron should basically advise the council to review the design of the site plan and make restructuring that will ensure convenience is attained so as to meet the concerns of the local and the re-design should take into account the views of the locals rather than allow private developer to make decisions on the design, because the developer is likely to take a direction that favors their working. The Tax increment financing program should be reviewed, because the low population at the moment is less likely to increase in the near future because of the low attraction that the area may have. The Tax increment financing may still be used, but it is better if the funding portion dedicated to Tax increment financing would be cut down to a lower level and other sources be sought to top up any deficit that may occur. This may be helpful in the future, just in case the project’s anticipated gains are not achieved, because it is the only way to ensure the tax burden will not be too high and unbearable. Thus the financial risk of having a high tax burden to offset the bonds should be avoided.
References
Hirt, K. J. M. (2004),. Renaissance and reality: Redevelopment of the homestead site, Managing Local Economic Development: Cases in Decision Making,
James M. Banovetz, Ed. (ICMA, 2004).
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