Conference on the Economic Impacts of Preserving Open Space Lands

2008

PLAN Jeffco

“Conference on the Economic Impacts of Preserving Open Space Lands”

Date: April 2008

Sponsoring Organizations:

PLAN Jeffco

Jeffco Open Space Foundation

First Bank of Lakewood

Colorado Mountain Club

Clear Creek Land Conservancy (honorarium assistance)

Denver Parks and Recreation

American Planning Association

League of Women Voters of Jefferson County

Jefferson County Open Space

Audubon Society of Greater Denver

Welcome and Goals

by Margot Zallen, Chair, PLAN Jeffco

Some of the issues and concerns that we are going to hear about today date back to 1972 when we, PLAN Jeffco, were trying to convince the County Commissioners to put a tax increase on the ballot to raise funds to preserve open space lands. They were concerned about the effects of taking lands off the tax roles and other potential negative impacts to the county’s economy. We prepared a report for the commissioners, using the scanty data that existed at that time, which showed that positive economic benefits accrued as a result of acquiring and preserving open space lands. Apparently this report lessened their concerns, as they agree to put the issue on the ballot and the voters overwhelmingly agreed to tax themselves to protect the disappearing open lands.

This year, 2008, marks the 36th year of the Jefferson County Open Space program. With over 50,000 acres of lands preserved and 100’s of miles of trails developed, we thought it was time to reassess how the open space program affects the economy of Jefferson County and answer some reoccurring questions. “Does it tie up lands that are needed for development? An important question in times of reduced tax revenues and increased demand for county services. Do we continue to buy open space lands and if so, where? What role does it play in the county? Will the maintenance costs outstrip the tax revenues?” To answer these and other questions, we invited a number of experts to discuss these issues with us today.

Opening Remarks

by Greg Stevinson, Jefferson County Open Space Advisory Committee (OSAC)

Jefferson County attracts business owners, employers, and employees because of our lifestyle opportunities and amenities. We are near the foothills and mountains and easily accessible. We have seen that businesses often locate where a CEO wants to live and Jefferson County attracts these types of businesses. Jefferson County is blessed and cursed with wonderful highways and accessibility. We have five major highways intersecting in this county allowing for ease of access; however, this places an extra burden on the Open Space lands by bringing visitors to our county for recreation and open space enjoyment opportunities. Some other counties do not have as much open space and/or do not allow the multiple uses. Our accessibility can be good economically. Cities live off sales tax and the Open Space program is funded by sales tax. If we keep our county and cities vibrant, people will want to locate, live, and shop here, paying sales tax while they shop. If we have a healthy economic base, it will continue to support the health of the open space program, which is then also based on the health of Jefferson County.

Another question I want to address is: “What is the impact of taking property off the tax roles?” The Open Space program has strategically made acquisitions that are of the lowest economic impact. Potential losses are offset by the increased value and sales of properties next to open space parks. Every time the program looks at acquiring property we do myriad of analyses, one is cost of maintenance. We can and have continued to afford the stewardship of the properties we have. We can acquire more provided the economy stays strong, encourage the public to leave Open Space sales tax as it is, and provided we don’t get into the park and recreation business.

Keynote Address

by Dr. John Crompton, Distinguished Professor of Recreation, Park & Tourism Sciences, Texas A&M

This County was a pioneer in dedicating funds for conservation back in 70’s and still today, is one of the only counties in the country that have that kind of dedication to open space preservation. The rest of the world is catching up: the last few years have seen incredible progress for open space preservation. For example, the Trust for Public Land (TPL) noted there have been 1,500 open space bond issues in last eight years and 77% passed, which is a higher pass rate than any other public service. Every opinion poll says America wants to spend more money on parks and conservation. From 1995 to 2004 America experienced a 64% increase of real dollar expenditures by local governments on parks on recreation, again, higher than any other public service.

There now are 1,700 Land Trusts in the nation, an increase from only 400 just 25 years ago. There is $400 million more for trails than there was 20 years ago. According to the Army Corps budget, the biggest polluters of the past, now spend 25% of their budget on clean up or greening projects. The last farm bill had $20 billion in conservation programs. This is the golden era for conservation.

Officials frequently view parks and open space as costly investments from which they see no economic return. They often also believe that it is development that brings prosperity to a community and that while there is social merit for parks and open space; those amenities are secondary at budget time. Too many community leaders feel they must choose between economic growth and open space protection. But no such choice is necessary. Open space protection is good for a community’s health, stability, beauty, and quality of life. It is also good for the bottom line.

In some of our studies, we assumed there are four different sets of folks in a community:

– Proximate residents within three blocks of the park (Property Capitalization)

– Other residents who use the park (Contingent Valuation)

– Other residents who do not use the park (Psychic/Opportunity Value Contingent Valuation)

– Residents from out side the city who use the park (Economic Impact)

The questions in these studies went to users and asked them if they can measure the value of a home that is attributable to a park. Even if an individual doesn’t utilize the park, there is a value there. We measure the economic impact by looking at visitor use. We have done dozens of studies that measured user values and how much users got from the park.

We realized that looking at only users and user satisfaction might be insufficient to justify parks and conservation. Measuring users proved to be inadequate because most taxpayers are not direct users of most of the facilities so why should they pay for them. For this type of nonuser, it’s the offsite benefits rather than the onsite benefits that give them value for the park.

A park performs necessary service for the community beyond responding to the demands of particular user groups. Originally parks were to clean the air from pollution, serve as a place where workers could regenerate themselves and be more productive, increase real estate values, serve as tourist attractions, etc. The purposes of the parks did not include rationale for user-related values like walking dogs or picnicking.

The value of parks and recreation is that they perform a necessary service for the community beyond responding to the demands of particular user groups. Around 1990, there was a shift to a new era focused on community benefits, see figure, and making a case for a whole community, not just those that are going to use the parks. This work identifies the following 19 possible community-wide benefits related to economic prosperity due to open space:

– Attracting tourists

– Attracting businesses

– Attracting retirees (affluent retirees are the new economic development tool in America)

– Enhancing real estate values

– Reducing taxes

– Stimulation of equipment sales

– Cleaning water

– Controlling flooding

– Cleaning air

– Reducing traffic congestion

– Reducing energy costs

– Preserving biological diversity

– Reducing environmental stress

– Community regeneration

– Cultural and historical preservation

– Facilitating healthy lifestyles

– Alleviating deviant behavior among youth

– Raising levels of educational attainment

– Alleviating unemployment distress

Critics who argue there is inadequate evidence to support the potential contributions of these benefits are wrong. There is strong empirical support for all of the benefits listed to justify their advocacy in formulating policy. There is plenty to support the benefits. Communities can take the various benefits and apply them into their planning processes as appropriate for that area.

We also need to ensure we’re using effective vocabulary in psychological repositioning for parks and conservation:

– Water: clean water, preserving water quality

– Protect wildlife habitats: not ‘endangered species’, which is more polarizing

– Natural areas: avoid ‘open space’ cf. empty space of no benefit to people; ‘urban space’ cf. an abandoned lot or bench among big buildings

– Hiking, biking and walking trails: not ‘trails’; attaching uses to it makes it more resonant

– Creating parks and other places where children can play safely: not ‘neighborhood parks’ or ‘playgrounds’

– Protecting quality of life and carefully planned areas: not ‘sprawl’, ‘unplanned growth’, or ‘reducing sprawl’

– Our and we imply ownership and inclusion: e.g., “WE need to protect OUR beaches, lakes, and natural areas”

– Protect natural areas for future generations

– Talk about ourselves as conservationists not environmentalists

In a study of business executives, we gave the participants 100 points and asked them to allocate points across six elements (government incentives, quality of life, labor, proximity to customers, operating costs, and transportation). Most interesting analysis: when we look at small companies (10 or less) and large companies (40 or more employees) among small companies: quality of life is most important and proximity to customers next, for large companies: labor and operating costs were most important; probably because they have stockholders and are mandated to make the highest bottom line so they operate by different criteria.

This shows that parks and recreation have a lot to do with business relocation in Jefferson County.

Quality of life – what is it? Primary and secondary education, recreation and open space, cost of living and housing, personal safety and crime rates, culture opportunities, health and medical services are elements . For small companies recreation had the highest importance, 26.4 versus 12.1 for large companies.

The retirement migration is the new clean growth industry in America today. People want these retirees to move to town as an economic driver.

They are called GRAMPIES: Growing number of Retired Active Monied People In Excellent Shape

GRAMPIES are an appealing economic target market. The economic inflow of 100 retired households with $40,000 annual income is equal to a new $4 million annual “payroll.” And:

– Social Security and Private Retirement incomes are stable – not subject to the vicissitudes of economic business cycles

– ‘Positive’ taxpayers, i.e., generate more tax revenue than the cost of serving them (e.g., schools, criminal justice)

– Contribute to development of the health care industry

– Volunteer pool – active in churches, service organizations, and philanthropic organizations

GRAMPIES stimulate housing and retail, but do not put pressure on local job markets or social services. The advantages of attracting GRAMPIES over Business Relocations are that:

– Retirees do not require incentive packages

– Capital investments by city can focus on quality of life amenities (so if they don’t come, you still have the quality of life stuff that also benefit existing residents)

– Recreation opportunities

– Ambiance

– Beautification Retention of GRAMPIES is as valuable as recruitment

Q: Is there a correlation of property values between parks and proximity to them? What is the applicability of that study to larger scale open space program where the residential area is necessarily close to the recreation areas?

A: In an urban area and a hypothetical park, the zones around the park have increased property values that correlate to the distance from the park. If you use the key assumption that 20% increase in Zone A, a 10% increase in Zone B and 5% increase in Zone C and then apply premiums. Once you apply the premiums, you find that the park pays for itself because homes closer have higher values and higher taxes. This does not work in every situation. It works for natural/passive parks, but not for ball fields, etc. For natural, open space areas it shows that it will raise the value of all homes in an area so when one measures proximate values, it becomes difficult as the comparison is not as legitimate when all of the homes values raise, not just adjacent ones.

However, a lot of work has been done in the area of cost of services and fiscal impact analysis. The developer mentality is that they can cut trees because it will raise the tax base and income and then be able to go plant other trees. If you look at median values from 98 studies addressing revenues versus service costs for three areas: commercial and industrial, farm and forest open space, and residential, for every revenue dollar generated, the service cost was $0.27 for commercial, $0.35 for open space, and $1.16 for residential. Not one study case showed residential with less service cost than revenue. It nearly always costs more to service residential than is received in revenue. An exception sometimes is with senior citizen developments because they have higher income houses and taxes with fewer services. Commercial is low cost, but needs to balance with residential needs for the employees. You can save money by having open space to prevent houses because in the long term it is cheaper to buy open space than to allow houses to be there.

The second half on the Conference included six local presenters:

Matt Cohen, a Realtor with REMAX Alliance discussed how ‘Open Space Sells’:

“Customers ask about proximity to open space areas an recreation opportunities. In housing, people demand choices and proximity to open space provides the perception that they have the choices for a lifestyle they want. I have out of state clients and deal with relocation companies and individuals. Many want to be near or close to the mountains. I appreciate that I can show them a development where the residents are focused on ensuring that the area has protected open space that they steward the area (cut trails, work in their HOA’s, etc.) They have made the area a draw for relocation.”

Mark Weston, an independent appraiser with Hunsperger & Weston Ltd.:

Discussed how residents in Douglas County and developers focus groups reached consensus that living next to protected open space was better than next to a private golf course.

Dan Pike, President of Colorado Open Lands discussed trends in open space:

“If your community isn’t threatened with change, nobody wants to be there. Land protection is a really bad way of controlling development. Haphazard conservation is as bad or worse than haphazard development. The highest priorities will not get protected if we only spend resources on haphazard conservation to control development. The effort will focus on sound planning, not opportunistic growth or conservation. We need to be creative and open to incorporating planning and preservation together. For example, the preserving parks or open space makes sense for the ultimate landowners. Countywide planning: needs to identify what we need to protect. Developers don’t want to get into long-term fights with the community over a property. Developers want certainty; they want to know where they can go to build.”

Preston Gibson, President of the Jefferson Economic Council talked about economic development and the relation of open space to economic development:

“There is an important balance of recreation, open space, and housing. We promote our area through job growth and generally in high tech segments. It is not just about open space when we are looking at the jobs we’re trying to attract, we’re looking for people who want opportunities and our second to none quality of life. We have a majority of small businesses here; 18,500 businesses here and most are four or fewer employees.”

Amy Ito, Manager of Planning & Development for Jefferson County Open Space discussed how Jeffco set priorities on land acquisitions:

“Jeffco works with other public open space programs. Adjacency, open space, vistas, etc. are all values and we use a lot of stakeholders and contributors to help us protect natural areas.”

John Wolforth, Planning & Zoning Director for Jefferson County discussed how they try to balance development:

“We look for sustainability and we like it when economic development and open spaces are combined into one project. We aim to get a lot of community input and focus on balancing the community needs, an applicant’s proposal, community plans, agency objectives such as open space, economic development, health department, urban drainage, etc.”

Conference Proceedings:

A visual transcript of the conference, about 2.5 hours long, is available on DVD for $6.00.

An edited to 30 minutes synopsis of the conference also is available on DVD for $6.00

A written proceedings of the conference, about 25 pages, is available for $5.00

The PowerPoint slides presented by Dr. Crompton are available. The file size is almost 10 meg. Send an email to:

John Litz, jklitz7@ix.netcom.com

Proceedings can be ordered from:

PLAN Jeffco

11010 W 29th Ave

Lakewood, CO 80215