Last year, Sarasota County unveiled a study showing that, on a per-acre basis, big-box stores do a poor job of providing governments with needed property tax revenue. The study compared a Walmart, which brings close to $8000 an acre in property taxes, with a luxury condominium /first floor retail, which generates about $1 million in property taxes. While the study received attention nationwide, locally, the results raised a lot of questions. Does this mean Sarasota County should send all commercial uses to the city of Sarasota? Should we create more than one downtown? Are these two uses comparing apples to oranges?
Even with these questions, the study was useful. Sarasota County has drawn an urban service boundary, which means we need to think more like an urban area when it comes to real estate. The per acre analysis is increasingly relevant, though breaks tradition with how the County conventionally evaluates development impacts of master planned communities. However, the study left a gnawing feeling that we did not look at the entire picture. Instead, people want to know what the relevant building types are that fit market demand while optimizing value (and hence property tax collection)?
This topic was actually broached in 2008, when the Planning Department asked Dr. Arthur “Chris” Nelson to examine the intersection of future markets, existing assets, demographic change and redevelopment. Dr. Nelson’s findings showed that Sarasota County has close to 7000 acres of underutilized, developed land that is “ripe” for redevelopment. The best news, in a county with a touchy history with density, is that high value redevelopment need not be tall buildings, but two to three stories. So what does this look like?
As it so happens, Sarasota is home to an exquisite example: Citrus Square. Citrus Square is a three-story, mixed use development close to downtown Sarasota. There are 20 residential units and seven retail spaces in the first phase that occupies roughly 1.5 acres; two more phases are planned for the future. The building is remarkable in several ways:
- The attention to detail is phenomenal. Jonathan Parks and Chris Gallagher who both worked on the project and live in Citrus Square, lead tours, which highlight the building’s attention to climate, rainfall patterns, durability, and respect for pedestrians, drivers and neighbors.
- Of the twenty residential units, only two remain for sale. One of the first floor restaurants,Pomona, requires reservations three months in advance I am told.
- The footprint of parking was minimized through site design, use of angled parking in front of the shops, and negotiations with the city of Sarasota to use on-street parking. The footprint of the loading zone is zero, thanks to use of the rear driveway.
- Stormwater is managed through landscaping, pavers and an underground cistern.
What about tax revenue? Instead of looking at Citrus Square versus Walmart (or the condominium), the most apt analysis is to look at a one story, strip retail configuration against one story retail plus two floors of residential. Here in Sarasota, businesses are remodeling, though often replacing older buildings with one-story replicas on the same auto-oriented footprint (for example, the Publix at Bee Ridge and Beneva Ave.) This analysis basically looks at Dr. Nelson’s challenge and asks whether we (through increased returns for landowners and increased property taxes ) are leaving money on the table.
This analysis is admittedly not an exact per-acre comparison to the earlier study, since much of Citrus Square’s parking is on-street and was negotiated with the city. Parking for the 20 residential units adds about 0.15 acre for parking at one space per unit (note: 330 square feet is a commonly used figure to describe the space needed for the dimensions of the parking space plus drive aisles). Like the previous study, sales taxes are also not included.
So what’s the result? Data from the Sarasota County tax collector shows property taxes totaling $23,879.93 for 12,419 square feet of retail space. So if you build a 12, 419 square feet strip center, this is what you get. However, property taxes on the 20 units add up to $67,848.55 for the last year.
These are not units with water views and two of the units are studio apartments. Perhaps the most remarkable aspect of Citrus Square is its location east of Fruitville Road. The building and its occupants share a three block area with uses that span the economic spectrum. For this reason, Citrus Square might not just be the most important building in Sarasota, but worthy of attention in any community where the future of redevelopment is 35 feet tall.