I've just read Mr. O'keeffe's commentary with great interest, as I've been crunching similar numbers lately. While I agree with the main point of his article, I'd like to point out a few differences with my research, for comparison. First, if you were to use 1996 numbers instead of 1997, Amherst's Commercial growth between then and 2006 equaled 54% vs. the state's 95%. (I include industrial growth in my figures) While that still puts us way behind the state growth, its a far better scenario than the 39/97 numbers Mr. O'Keeffe used. So, what would our numbers look like if we had enjoyed that same 95% growth since 2006? We would have about $41 million more commerce than we do, which would bring in about $615,000 more in taxes in 2006; not chicken feed certainly. Again, I agree with the premise and believe we can and will do better with our commercial growth and Mr. O'Keeffe's article points this out that need in a very graphic way. And the notion (yes, its one of my notions) that we would need large increases to make a sizeable dent is true in the short run, for we would need to add tens of millions of dollars of commerce very quickly to see a significant tax advantage in the near future. The bottom line is that we must find ways to grow commercially, whether by leaps and bounds or by steady 5.2% achieved by Mass. I'm all for it!

John, after I wrote my last comment, I went back to the DOR spreadsheets and now I'm wondering what to do with their numbers; and if they are at all useful. If you take a look at the state figures, odd stats start to pop up, like:
Between 1988 and 1996, commercial/industrial growth statewide was 1%!; while in that same period commercial/industrial growth in Amherst was 15%; and 1988-2006 in the state was 97%, while in Amherst it was 77%. And in the state, from 1989-1999, commercial/industrial growth was a negative 3%, while in that same period, Amherst saw a 23% increase.
I just point this out because I wonder if we are both using flawed data. My guess is that when I check this out with Mr. Burgess, he will once again tell me that these oddities occur because of changing assessing procedures. It appears that not every town is keeping records with the same criteria. I'll check with him and get back to this post.

One more whopper:

1984-2006: Amherst +295%
1984-2006: State +329%
1984-2006:Northampton +318%
1984-2006: Hadley +334%

According to these stats, if we had kept pace with Northampton during this period, we'd have an additional $11 million in commercial assessments which would bring in about $160,000 in taxes! Should we be using these figures at all?

Thanks for all your feedback, Gerry. One of the reasons that I focused my analysis on the 1990's and didn't go back to the 80's is that the statewide numbers prior to 1990 are unreliable. If you look at the town-by-town figures for the 80's (especially the early part of the decade), you'll see that many towns (like Granby, for instance) were only reporting total assessment figures at that time, and not breaking them down into the residential/commercial/industrial categories that are used today by all towns. Since the statewide figures are simply the sum of all the town-by-town figures, the statewide commercial figures therefore are incomplete for many years in the 1980's. I think that's why you're seeing unrealistic growth rates when you use baseline years from before 1990. After 1990, the town results appear to be complete, and can be used as a more reliable baseline.

Both you guys are awesome. It's great seeing you work together on these numbers!

The post I made to the SB Recap page
should have been "linked" (at least conceptually) to this page as well. The
salient questions I raised there:

a) what accounts for the decreased fraction of commercial/corporate real
estate taxes paid (compared with residential), not just in Amherst, but
state- and nation-wide? (could it be
that one sector has been more effective
in lobbying for an assessment method
that affords this tax break?)

b) what will support this hoped-for
commercial growth when there is some
evidence (locally, in several categories)
that the saturation point has already been exceeded? (there may be plenty
of potential in other categories, such
as adademic-intellectual-industrial spin-offs, but that's not what most
people seem to be thinking about when
they talk about economic development - these spin-offs aren't just cash-cows, but could also afford opportunities
for realizing the *human* potential of folks who wind up in this area because of UMass or the colleges, but who don't earn an academic salary)

what will support this hoped-for commercial growth ...

I'd argue that supporting commercial growth requires paying attention to the details of town policy and zoning that affect the decisions of businesses to locate in or remain in Amherst. Last spring's decision on PRP zoning is an an excellent example of this. Our existing PRP zoning makes it difficult or impossible for firms such as architects, engineers, or business consultants to locate in PRP-zoned areas, because the PRP zoning rules prohibit anything that involves any contact with the public, even visits by appointment. Changing the zoning to allow firms like these to locate in areas that are, after all, zoned as "Professional and Research Parks" seems like the encouragement we should be giving for this type of clean, low-impact business to locate in Amherst. Despite unanimous support from the Finance Committee and 4-1 majority support from the Select Board, the "Not-In-My-Backyard" opposition in Town Meeting defeated this article.

Another example, also from last spring, was the article to change zoning of some parcels at South East Street/College Street to Village Center/Business, to encourage the type of mixed-use development that everyone professes to find so desirable. With strong opposition from the Select Board, this article too was defeated.

We've had ample opportunity to make the kinds of incremental zoning changes that contribute to creating an environment that fosters economic growth (and not just in the retail and dining sectors). None of these zoning changes will change our budget situation this year (or next year, either). But it is exactly this type of zoning changes that are required if we are to achieve enough growth in our commercial sector to avoid falling behind the rest of the state in the long term, as described in this article.

We say we're concerned about the tax base shifting toward the residential sector. Yet we don't want more "Beer and Pizza" joints downtown. We don't want low-impact businesses in our Professional Parks. We don't want commercial activities in our village centers. That doesn't leave much opportunity for commercial growth.

Thanks, Jonathan, for reminding us of of what you saw happening in last Spring's Town Meeting votes. Somebody also wrote similar things back then at Stephanie's blogspot. Nevertheless, the reality is somewhat different and more complex on those matters (and it is really unfortunate
that we have to rehash that debate
here, many months after the fact).

Let me remind everyone that,
in fact, the current Select Board supported one of the most
commercial-friendly zoning changes
in years at last Spring's Town Meeting:
the article which encourages much denser mixed-use activities in Amherst Center and in the village centers. I spoke in favor of this at Town Meeting, and point(ed) out that it can also be seen as environmentally friendly and energy saving.

It is also unfortunate that the point of
my recent post seems to have been missed. When I raised the question
"what will support this hoped-for commercial growth...?"
I wasn't referring to the *political* support (of Town Meeting), but rather - as the two examples of possible saturation were intended to illustrate - to the *economic* support (of the community).

While it can be (and has been, including by me, in my most recent post) argued that Amherst might be able to sustain more commercial activity, especially in academic-intellectual spin-offs, isn't it reasonable to assume that, statewide, we have reached a more-or-less sustainable equilibrium for the commercial/residential balance? If so, then the figures we see statewide suggest that the declining share of taxes collected from the commercial sector must be due to something else.
How do we account for this?

Is it possible - just possible -
that it has something to do with the
methods by which non-residential propert is now being assessed, post-Propostion 2&1/2?
And if that were the case, then might shifting this ratio
be more complicated than just trying to attract more commercial activity to Amherst via zoning changes?
(I think this may also be the - at least, implicit - question raised by Mr, Weiss.)
Shouldn't we better understand this
feature of the declining (over time) commercial/residential assessment
ratio, before we start tinkering with other possible features which may be
less relevant and less realizable than we may wish to believe?

Hey Rob –

I understand your argument to be:

A) That there is something suspicious going on with commercial property assessments;

B) That because some businesses have closed recently, we might take that as evidence that there is enough/too much local commercial enterprise.

Is that a fair re-statement?

As far as UMass spin-offs, I think there is wide support for that kind of development (at least hypothetically. It isn’t until someone comes up with an actual plan to build something and locate it somewhere that the opposition starts to mobilize.) But so far, that just isn’t happening. So what do we do while we wait and hope for that? Nothing?

About merely HYPOTHETICAL support for UMass spin-offs, how right you are, Stephanie:
A proposal for a UMass conference center, to be built in the North Amherst PRP, was defeated by Town Meeting in the '90s. And that's not the only one I remember.

A) Nothing "suspicious", just *different*:
this needs to be examined and better understood.

B) It is evidence that there are limits to
what this community can sustain, at least
in certain sector: this discussion should acknowledge these sustainability limits.

I hope the UMass Conference Center was not the best and brightest idea of an academic-intelledctual spin-off (the same might be said about the more recent JPI proposal); surely we can do better here: REALLY, not just HYPOTHETICALLY (and I already cited
the Community Wireless project as an
example, where the infrastructrure put
in place could have an integrated impact much larger than observable
in any of its individual, infinitesimal parts - we can and should do more
along those lines...).

John, getting back to the numbers. I'm not sure the 90's are any more reliable. Here are some more stats that makes it look like one could make a case either way depending on the exact years one uses:

Value of Commercial Property:

State - 1990-2006 +46%
Amherst 1990-2006 +153%

State - 1990-2000 -5%
Amherst 1990-2000 +17%

State - 2005-2006 +6%
Amherst 2005-2006 +9%

State - 2004-2006 +14%
Amherst 2004-2006 +13%

To me, all these stats throw into question whether we're lagging behind the state using 1997-2006, or besting the state, using the above years.

Thus, perhaps we then need to start the discussion with: How do we as a town wish to define economic development? What are our goals? To create a healthy business climate with small growth? Or to seriously change the 90/10 tax structure? What would it take to accomplish either of those goals? And perhaps we're doing what we need to do to accomplish the former; not the latter. If the latter is our goal, what would it take?

Gerry, I think that what the numbers show is that we substantially outgrew the state in the early 90's, and have lagged behind since then. The short-term, year-to-year figures, like your 2005-2006 and 2004-2006 numbers, fluctuate considerably from one year to another, but the longer-term pattern of faster growth (relative to the state figures) in the early 90's and slower growth since then is clear.

I think you're absolutely right that the town needs to define what its economic development goals are. We're using these assessment numbers because they are what we have available, but there's more to economic development than just the size of the commercial assessment (although at the end of the day, the assessment size is pretty important, because it defines the size of the levy). And as Rob has been pointing out, the assessment practices on the commercial side are a little murkier than they are on the residential side. I'll be interested to see whether your study with the local economist can shed any light on the question of what correlation (if any) there is between the size of the commercial assessment and the level of a town's commercial activity. Is this something that you're looking at?

On January 29, 2007, at the end of his third year on the Select Board, Mr. Weiss is talking about "starting the discussion" on economic development. What's wrong with this picture? We are discussing and listening while Rome burns. The time for just discussing was during the first months of Mr. Weiss's term.

Let's be clear about the critique here: it's not about becoming Hadley, and it's not about a quick fix. It's about being a place in the years 2010 to 2020 that honors its responsibilities to its people, to educate, to serve and protect. We are talking about long-term responses that are not happening.

The assumption behind these remarks by Mr. Weiss is that, like some Voice of God to Moses, a Consensus will emerge and speak to our servant Gerry and tell him what to do. That's not how politics works.

I am sick and tired of discussions that go nowhere, that lead to no clear statements of intent and action. Let's get going on something.

Does anyone remember Al Gore arguing that a green economy could be a thriving one? Does anyone in Amherst really believe that? I do.

Rich Morse

Jonathan,

I respectfully disagree with your premise that the short-term, year-to-year figures, like 2005-2006 and 2004-2006 numbers fluctuate considerably from one year to another, but the longer-term pattern of faster growth (relative to the state figures) in the early 90's and slower growth since then is clear.
My point all along is that its not at all clear. Let me expand this even more: from 2000-2006, Amherst trailed the state +32% vs +54%(interestingly, Northampton's gain was +33%!); then from 2001-2006
Amherst trailed the state 23% to 36%; then from 2002 to 2006, we trailed the state 24% to 20%; then 2004 -2006, we trailed 14% to 13% and 2005-2006 we surpassed the state 9% to 6%! So, to say that we can't use the 80's, during which we outdid the state and we have to discount the 90's during which we outdid the state because the recent trend is down seems incorrect. It looks to me that Amherst had a very slow cycle from 1997-2000 and that since 2000, we've been doing better each year. Using the commercial assessment values, we've kept up with Northampton since 2000 and since 04, we've outperformed Northampton and the state.I just don't see how your numbers support your point unless you keep using 1997-2000 in all calculations.

Gerry, I'm not sure whether to say I agree or disagree, because I think your numbers support my point. In the series of intervals you cite, we have trailed the state in growth in all but one, which doesn't seem to me to indicate that our situation is improving. Let me try to present the same numbers in a different format. I think you're using the Commercial plus Industrial figures, so that's what I'll use here. Here are the raw numbers that you summarized above (figures in millions):

And here is the total growth for the interval between each year and the present (2006):

As you can see, and as you pointed out above, Amherst has trailed the state over every single interval except the most recent single year. This is not at all affected by the choice of 1997 as a baseline. In fact, it holds true for every single baseline year between 1991 and 2005, as we can see by extending the table above back to 1991:

These figures represent cumulative growth over the intervals in question, not year-to-year growth rates. In order to address your assertion that we have been doing better each year since 2000, we need to look at annual growth rates for each year. Here are the raw numbers:

Here are the same numbers presented graphically. The blue is Massachusetts as a whole, the red is Amherst.

Your interpretation of these figures is that "since 2000, we've been doing better each year". My interpretation is somewhat different. I look at the interval from 1991 to 1997, where every year we outperformed the state, or trailed it by a tiny margin, and conclude that this was period of healthy growth in the town, relative to the rest of the state. Then I look at the period from 1998 to 2006, where every year we trailed the state (often by a considerable margin) or slightly outperformed the state, and conclude that this was a period during which our commercial growth could not keep up with that of the rest of the state.

I do need to acknowledge the fact of our healthy commercial growth in 2006, an improvement of 8.7% over 2005. This was our highest growth rate since 1997, and only the second time since 1998 that we have outperformed the state. However, we cannot rest on our laurels, since the most recent figures indicate that our commercial assessment actually declined slightly for the 2007 fiscal year.

For anyone who has managed to stay awake through this barrage of numbers, I wish to again point out that the figures Gerry and I have been discussing come from the Massachusetts Department of Revenue web site, which has town-by-town and year-by-year data covering a wide range of local financial issues.

Here's a point I totally agree with you on. However we interpret the numbers, we can't rest on our laurels and we must find ways to grow commercially. I believe our best bet is with the University. We don't have access to Rt. 91, we don't have or want a big box strip mall. There are currently talks going on with Amherst College and with the University, with ideas on the table. And the Hamp college housing project, while not commercial, will add a good chunk of change to our tax base and will help build the Atkins Corner expansion, by having a ready population base. We've also got to get back to the College St/SE Street rezoning. Meanwhile, downtown is seeing a bit of a rebirth. And we can build on the new improved relationship between Town Hall and the Chamber and downtown businesses.

Great job Jonathan; as usual, though, the numbers will be picked apart endlessly until the argument is diffused into nothingness. It's very simple: take Valley Medical -- can we use another Valley Medical in Amherst? I think so. Guess what? Valley Medical is nonconforming under current zoning.

Take Blair/Cutting: can we live with another building like that? Is that so offensive?

Look at their assessments. What taxes are generated? How do the taxes compare with what we hope and pray to get from UMass for police/fire? Insignificant? I don't think so -- and we would receive it every year.
Would those changes destroy the town?

paul