The Town of Gilbert is not getting all the revenues it should from the Heritage District redevelopment area, according to a planning and economic development analyst.
Joe Minicozzi of Urban3D told the Town Council in a special meeting last month that the best way to add taxable revenue dollars is to increase building heights, particularly in sought-after areas like the Heritage District.
Downtown Gilbert has a height limit of just 55 feet, and developers have faced significant hurdles getting projects approved, Minicozzi said, even though those projects generate the most value for the Town. He used a project he had been involved with as an example. That project was a building with ground-floor retail, second-floor offices and residential units above that increased the property’s taxable value from $300K to $11M.
He noted municipal infrastructure projects, such as roads, operate at a deficit and that single-family residential projects do not generate sales taxes. He also pointed out 59% of Gilbert’s revenue comes from sales taxes, which he called “unbelievably dumb,” and 48% of the land in the Heritage District is non-taxable due to uses like parks, churches and community centers that would probably not be redeveloped.
He added that the Town’s slowness in building up the downtown area, compared to outlying and suburban districts, put the town “behind the eight ball a little bit to grow it up.”
Minicozzi called the Heritage District the Town’s “golden goose” and said downtown had the strongest taxable real estate, urging the Council to make sure it was developed with appropriate height and density to maximize its value. He cited Creation RE/PE’s 40.5KSF office project The Collab, with a property value of $15.3M, as an example of development done right from a municipal revenue perspective.
Talking about the ways in which the height limit obstructs growth, Minicozzi brought up The Brundrett Building redevelopment. The original proposal called for the redevelopment of an existing building with a 68-foot proposed height and restaurants, offices and a rooftop patio and bar. The proposal was rejected because some area business owners objected, saying it would obstruct views of the iconic Water Tower.
The plan has since been revised downward to 55 feet and is progressing through the approval process. Minicozzi chided officials for the rejection, saying, “You have to make a critical choice: Is the Water Tower a be-all- and-end-all for your community?” and advising the Town to invest its processes and efforts toward projects that would generate the most revenue for its operations.
After the presentation and an exercise to demonstrate what developers must go through to create projects in compliance with the current design standards in place, the Council asked Town staff to look into options for increasing height in the downtown area. (Source)