Santa Rosa studies mixed-use urbanism as revenue relief

SANTA ROSA — An innovative approach to urban development planning, project financing and inner-city design is being reviewed by Santa Rosa city officials and staff in the wake of the recession and in an era marked by long-term financial obligations, the loss of local redevelopment funds and no increases in the state's gasoline tax since 1993.

With the impact of a billion-dollar deficit produced by unfunded infrastructure maintenance needs looming on the horizon — including long overdue road repairs and an acute shortage of affordable housing — city leaders and planners are searching for new revenue sources without imposing higher taxes or fees.

'We believe that financial analysis modeling of land use development patterns close to SMART stations will provide practical insights for addressing these concerns,' said Robin Stephani, vice president of preconstruction for Wright Contracting. 'After many years of automobile-focused policies and planning, we need to rethink our development strategy toward maximizing land and other resources for the highest and best use.'

To help finance this pilot project and additional studies, Stephani and a small group of architects, planners, environmentalists and former city officials formed the Urban Community Partnership, or UCP, a 501(c)3 multidisciplinary collaborative that wants to transform the traditional approach to development as a key to assuring financially resilient municipalities, while promoting a more healthful quality of life and reducing environmental impact.

A first step in understanding the cost implications of different types of development is figuring out how much tax revenue is coming from various areas in Santa Rosa. UCP and the city of Santa Rosa brought in principals from Urban 3 (urban-three.com) and Strong Towns (strongtowns.org) to conduct an economic analysis of the financial productivity of land-use patterns in Santa Rosa, with a focus on downtown and Railroad Square. Using 3-D modeling software, they created a visual map of tax production and the impact of community design on local finance.

'With this understanding, we can start to pivot development patterns to maximize benefits for the community,' Stephani said.

Other partnership founders are Paul Fritz, principal architect of Sebastopol-based Paul Fritz Architecture/Planning (fritzarchitecture.com), and Santa Rosa-based ArchiLOGIX (archilogix.com) principals Peter Stanley, LEED AP BD+C, project manager, and Mitch Conner, architect and designer. Fritz focuses on creating walkable, human-scaled places that are financially and socially resilient and provide stimulating environments to live, play and work.

In addition, the startup team includes Karen Weeks, who worked for the city of Santa Rosa as a housing specialist in the Economic Development and Housing Department developing the Neighborhood Revitalization Program, homeless programs and affordable housing projects, and David Petritz of Sonoma County Conservation Action (conservationaction.org), who also serves on the Southeast Greenway Campaign Committee.

The partnership has a growing list of donors and seeks to raise $75,000 for financial analysis studies in Sonoma County and an equal amount for similar analyses in Marin County.

'It is very difficult to build affordable housing here and a better system for advance development planning is critical with the coming of SMART,' Stanley said. He pointed to state laws such as Assembly Bill 32 of 2006 and Senate Bill 375 of 2008 that call for reduced greenhouse gases, a lower carbon footprint and more sustainable communities and buildings.'

'Anything we can do to remove restrictive zoning and other barriers to entry, while also mitigating utility impact fees to allow more flexibility, improves opportunities for developing efficient, compliant, mixed-use structures within the inner city resulting in higher property values,' Conner said.

The Santa Rosa pilot study used a unique urban financial modeling process created by Asheville, N.C.-based Urban 3 LLC, led by Joseph Minicozzi, AICP, AIA, IAAO, and specializing in property tax and retail tax analysis and community design by visualizing economic data.

'The best return on investment for the public coffers comes when development occurs downtown,' Minicozzi said. 'Not just more development, but the kind of infill development that can increase the value of buildings in the surrounding neighborhoods as well. Urban 3 has conducted studies in dozens of cities in the U.S. and Canada including Austin, Texas; Billings, Mont.; Petaluma, Calif.; and Sarasota, Fla., to name a few, and found that the same principle applies: downtown pays. It's simple math.'

For example, one Urban 3 test case compared a highly visible Super Wal-Mart store located near the city limits of Asheville, N.C., with an older six-story downtown building that the firm restored into a mixed-use structure.

'When we ran the numbers; the results were dramatic,' Minicozzi said. 'The Super Wal-Mart, considered by many to be one of the county's biggest revenue-generators, yielded $6,500 an acre on 34 acres in annual county property tax, versus $634,000 an acre on 0.2 acres for the repurposed downtown building's yield.'

He said retail taxes to the city of Asheville from the Wal-Mart store totaled $47,500 an acre, compared with $83,600 for the inner-city building. The superstore had no residents and provided 5.9 jobs per acre, compared with 90 residents and 73.7 jobs per acre for the mixed-use building.

'Our mistake has been looking at the overall value of a developed project rather than its per-unit productivity,' Minicozzi said. 'Every city should be thinking long and hard about encouraging the property-tax bonus that comes with mixed-use urbanism. Simply put, density gets far more bang for its buck.'

Charles Marohn, P.E., AICP, principal of Strong Towns, a national nonprofit with members in all 50 states and several countries with employees working throughout North America, provided additional input for the pilot study. The organization supports a development model intended to allow America's cities, towns and neighborhoods to become financially strong and resilient, including the use of transportation systems as a means of creating prosperity.

'Cities across our nation are facing deficits in the wake of decades of infrastructure expansion and suburbanization that followed the great economic depression and a world war,' Marohn said. 'Many still believe it is cheaper to build and maintain large housing communities and strip malls in the suburbs rather than downtown. Building activity spread out across the landscape is extremely expensive to maintain and far greater than the relative wealth this approach would generate. The Strong Towns approach is a fundamental rethinking of how we work together to build lasting wealth and prosperity within our communities. A strong America is made of strong cities.'

As a followup to this initial study, UCP and the city of Santa Rosa have invited principals from Urban 3 and Strong Towns to host a series of public workshops to explain results following the analysis of the pilot focusing on Santa Rosa's transit-oriented development, or TOD, plans for property downtown and the SMART station at Railroad Square.

The three workshops on the project will be held 5:30 to 7:30 p.m. Jan. 19–21 at Bike Monkey, 121 Fifth St., Santa Rosa. Advance reservations are required for each workshop via urbancommunitypartnership.org/calendar, as space is limited.