Thank you for the feedback! I want to reiterate that these are assumptions and not calculations performed by a development professional (I am not a development professional). The calculation was that of every $600,000 of purchase price per home, $400,000 was costs and labor (including demolition, purchase price, etc) and $200,000 was profit. Even if that "profit number" were $100,000 ($500,000 of costs per home price), that's still an $8.4 million dollar profit. If that "profit number" were $50,000 per home ($550,000 of costs per home price), that number would be $4.2 million. I just don't see a developer logically sinking (at least) $7 million into a development project with the expectation of less than a multi-million dollar return on investment. It would be a bad business decision. Unless they can show otherwise via tax documents from past projects, the point remains the same: Developer makes lots of money, community loses school space and affordable housing is not built.
That's an excellent point Jim, the revenue would be a boon for the City budget. With that said, it is still unjustifiable to me that as a community we would need to incentivize (or pay for with tax breaks) a developer to build affordable housing when they are making millions of dollars. The majority of the City's residents are renters and there is a dire need for affordable housing in the DMV area. The City Council could've pursued a non-profit or public developer for the site and (possibly) given them tax breaks with the condition that the majority of the homes built would be affordable. That route wasn't chosen and though the money is tough to turn down, I believe that home values would increase from having a world-class school for our children and our community would still benefit more from finding a benevolent developer. Would Hyattsville see revenue to the degree of your calculations? Possibly not and it would not address the problem immediately either. Nevertheless, education is a fantastic community and taxpayer investment that I believe should not be overlooked in this situation, but prioritized.
Daniel Broder almost 7 years ago on Against Magruder Pointe. For A New Hyattsville Elementary School.
Thank you for the feedback! I want to reiterate that these are assumptions and not calculations performed by a development professional (I am not a development professional). The calculation was that of every $600,000 of purchase price per home, $400,000 was costs and labor (including demolition, purchase price, etc) and $200,000 was profit. Even if that "profit number" were $100,000 ($500,000 of costs per home price), that's still an $8.4 million dollar profit. If that "profit number" were $50,000 per home ($550,000 of costs per home price), that number would be $4.2 million. I just don't see a developer logically sinking (at least) $7 million into a development project with the expectation of less than a multi-million dollar return on investment. It would be a bad business decision. Unless they can show otherwise via tax documents from past projects, the point remains the same: Developer makes lots of money, community loses school space and affordable housing is not built.
Daniel Broder almost 7 years ago on Against Magruder Pointe. For A New Hyattsville Elementary School.
That's an excellent point Jim, the revenue would be a boon for the City budget. With that said, it is still unjustifiable to me that as a community we would need to incentivize (or pay for with tax breaks) a developer to build affordable housing when they are making millions of dollars. The majority of the City's residents are renters and there is a dire need for affordable housing in the DMV area. The City Council could've pursued a non-profit or public developer for the site and (possibly) given them tax breaks with the condition that the majority of the homes built would be affordable. That route wasn't chosen and though the money is tough to turn down, I believe that home values would increase from having a world-class school for our children and our community would still benefit more from finding a benevolent developer. Would Hyattsville see revenue to the degree of your calculations? Possibly not and it would not address the problem immediately either. Nevertheless, education is a fantastic community and taxpayer investment that I believe should not be overlooked in this situation, but prioritized.