Can Fairfield Hills Operate Revenue Neutral?

To the Editor:

What does revenue neutral mean? Several elected officials have stated that Fairfield Hills must generate revenue to offset property taxes and possibly operate the campus “revenue neutral.” Do they mean to “pay back” the $20 million needed to acquire, abate the hazardous materials, and demolish the buildings? Probably not.

Do they mean to generate enough tax income to cover operating costs by leasing buildings at Fairfield Hills? The operating expenses thus far (2005 report) were $2,367,074, including fees for the master plan, environmental consultant, legal, moving town offices to Kendro, and Kendro rent, etc. Some of these costs were paid with bond money and others from the $750,000 operating budget for 2004-2005 and some may not recur. Future yearly operating budgets are as yet unknown.

Buildings being considered for economic development must first be abated and upgraded to current building codes and made handicapped assessable (elevators). The town or the lessee must assume these costs. The town might “pay back” these costs to a developer through its “economic development” reimbursement plan such as delaying for many years the collection of lease money or personal property taxes in some way. Because the town will own the buildings, no “real” property taxes will be collected.

Using Newtown Hall (22,260 sq. ft) and Woodbury Hall (45,512 sq. ft.) as examples, estimated costs to update each (not including an elevator or parking) were almost $1.5 million and $3 million respectively in 2000. (FFH Advisory Report.) Private developers are now constructing office space on Queen Street and South Main Street. Should the town compete with private developers?

Perhaps renovation costs are to be absorbed by the town, and “revenue neutral” only means the costs of security, mowing the grass, maintaining roads, playing fields, etc.

How much development would be needed to recover varies levels of operating costs? Taxes paid by several commercial enterprises in Newtown indicate the amount of development necessary to generate significant tax revenue. In 2004, taxes paid by several well-known firms were: The Homesteads, $231,810 (102,985 sq ft); Newtown Shopping Village (Big Y), $199,887 (90,848 sq ft); and the office building at 153 South Main Street, SBC International, $42,190 (39,083 sq ft). SBC is about equal to Newtown and Woodbury Halls combined. FFH may be able to generate the revenue our elected officials want, but what will FFH look like with such occupants?

 Trying to utilize these old, badly deteriorated buildings for commercial development no longer makes good economic sense. Real dividends from FFH will flow to all of us as the intangibles of preservation, recreation, and land for future use. The FFH land is like gold in the town vault.

Will the council members or someone else please let the public know what is meant by “revenue neutral” and cost offsets?

Ruby Johnson

16 Chestnut Hill Road, Sandy Hook                   November 16, 2005