Wednesday, October 31, 2007

The Transit Village Boondoggle

While the Democratic parties in Matawan and Aberdeen have been strongly supportive of the Transit Village Project (TVP), Republicans are sharply divided. Councilman Buccellato has made the TVP a keystone of his mayoral campaign. On the other side of Main St., the Aberdeen Republicans have on their platform the abolition of the TVP as secondary only to their goal of lowering taxes. Those supporting the TVP cite development and tax revenue. Those opposed cite overdevelopment and traffic congestion. The Aberdeen Republicans have it correct for more reasons than they realize. The Transit Village Project is a disaster and should be terminated.

The TVP envisions 10-story buildings with mixed commercial and residential use, giant parking garages with over 9,000 new parking spaces, and a new highway access road that goes over the Henry Hudson trail. Proponents claim that this massive development will help revitalize the downtown area. More likely, it will kill the downtown area as people try to avoid traffic congestion that Main St. was never built to handle. Nor are the Main St. shops close enough to the TVP to attract pedestrian traffic. But there is a strong likelihood that the new shops and cafes will draw traffic away from Main St., thereby harming the small shop owners trying to eke out a living.

Tax Revenue
On paper, the TVP would generate $8 million in additional tax revenue for the two towns. But that number is gross, not net. It does not reflect the added costs that such an undertaking would create for the township.

Councilman Buccellato is correct that the residential units under consideration, small and upper-scale condominiums, do not attract families but that is only part of the story. Extrapolating data from the 2005 American Housing Survey, we can expect one school age child per 10 residential units for a total of 50 children. Then, add another 75 children to account for the 60-plus state mandated affordable housing units (COAH) that would need to be built, and this project would add another 125 children to our school system. Our school budget would increase by, at least, $1,625,000.

The project is sketchy on financial details but the town would obviously need to subsidize the construction costs of the municipal parking garages, through tax breaks and/or direct financing. The income from municipal parking garages only cover operating expenses, not capital expenditures. The proposed parking garages would cost about $60 million to build. That means the town would somehow need to subsidize the annual $4 million loan payments on the garages.

Other miscellaneous expenditures, such as increases in law enforcement, road maintenance, and sanitation, would likely cost the towns an additional $500,000.

Lastly, given the current economic environment, any developer would likely require certain enticements to take such an undertaking. Since the leading proposal is being offered by Jack Morris’s Columbia Group (a power broker within the county Republican Party), we should assume that he’d be getting a sweetheart deal.

Opportunity Costs
The other economic cost is not doing a more modest project with no residential construction, limited commercial development, and a smaller parking garage. Simple math says building something an eight as large would generate an eight of the gross revenue, or $1 million per year.

Traffic Congestion
Matawan and Aberdeen could solve or ameliorate many of our traffic problems by just creating extra turn lanes at certain intersections. Yet, they haven’t. What are the chances that they will properly plan for an additional 6,000 cars on our local roads?

Municipal Planning
One of the major hurdles is that the Transit Village Project straddles two towns. If the towns merged, then we could develop a plan that would provide the best outcome for everyone. Instead, we’re faced with the Prisoner’s Dilemma in which each town acts only in its own best interest even if everyone would benefit from greater cooperation.

Aberdeen and Matawan are now competing (read: undercutting each other) for the most transit dollars and the most commercial space even if both ultimately lose through the bargaining process. We’ll never have an optimal plan unless the towns merge.

Once all is said and done, I guesstimate net tax revenue from the TVP to be around $3 million. That means the average householder will save a little under $300 per year. The towns could save us more money by just freezing municipal and school budgets for one year.

This boondoggle will not provide real property tax relief but will go a long way towards diminishing our quality of life. We’re better off without the Transit Village Project.
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1 comment:

Anonymous said...

"Instead, we’re faced with the Prisoner’s Dilemma in which each town acts only in its own best interest even if everyone would benefit from greater cooperation."

It's hilarious to hear a Republican being afraid of a little free market competition. If there was not the competitive factor, the ahistorical conservative mindset would pretend that doing nothing and keeping everything the way things are is some kind of viable option in the age of globalization and intense competition. Towns need to stop burying their hands in the sand as if doing nothing could somehow preserve your past standard of living. Didn't work out so well for GM or Chrysler, now did it.