Menlo Park: How rezoning could impact city's finances

Posted by Chuck Bernstein
a resident of Menlo Park: The Willows
on Sep 13, 2016 at 11:10 am

The "Fiscal Impact Analysis" prepared by the consultant is fiscal impact ADVOCACY, pure and simple. The section on property tax revenue borders on fraud, in my opinion, because it uses an appraiser's methodology for determining the value of the new construction (earnings value--rent, revenue, etc.) rather than the method that will be used by the County Assessor, the value of construction costs. And the consultant knows the right way to calculate property taxes, because it is the same firm the city used for the fiscal analysis of the Downtown Plan.

The result is inflated tax revenues. I have recalculated the amount of the prospective property tax using the SAME method that the SAME consultant used when they did the Fiscal Impact Analysis for Menlo Park's Downtown Plan. Those calculations show revenue at only 34% of what the consultant shows in the present analysis.

I do not have any way to attach the objection, with calculations, I wrote for last night's Planning Commission hearing. However, I am happy to send a copy to anyone who asks (CBERNSTEIN@HEADSUP.ORG). Following is a brief excerpt:

"As the Menlo Park City Council reviews the potential impacts of massive future development, its members must have clear and realistic information to support their discussions. Unfortunately, the city continues to hire hacks who call themselves 'urban economists.' (If street-corner pot dealers used the same PR agent, they would be calling themselves, 'urban physicians.') Rather than hold a Ph.D. in economics, these individuals have taken a real estate course or two and see their roles as providing advocacy for more development rather than objective analyses.

With respect to the FIA’s section on property taxes, the most charitable things that can be said is that the unnamed preparers were incompetent. More likely, though, they were intentionally deceptive, because BAE did know the proper way to approach property taxes when they prepared the FIA for Menlo Park’s Downtown Plan.

It would be helpful to the city’s decision makers if city planning staff had at least one person capable of reviewing an FIA. Alternatively, a draft should be permitted for peer review to an objective reviewer."

These are complex matters and it takes a lot of time to digest them. However, the future of our city depends on careful perusal of this information. I believe that it will show that not only is additional office development a serious threat to our quality of life (with devastating impacts on public safety, schools, traffic, etc.), they hurt all of us financially and the hurt will increase in the future (as expenditures rise 4%, according to the report, but revenues rise only 2%).

--Chuck Bernstein