Last week City Council voted not to approve the sale of a .66-acre city-owned piece of property near the corner of 184th and 80th in the Seaview area.
That piece combined with adjacent property would have allowed sufficient space for a 27-unit PRD (Planned Residential Development) known as Angler’s Crossing.
Apparently without the city’s piece of property there is still the opportunity for 25 homes to be built on the adjacent site.
I do not believe that it would be a prudent decision to have a park on that site, as proposed by some citizens – even if the funds to purchase it would come from sources other than the city.
If that was to happen, the city would still incur considerable annual expenses for maintenance of a park that is not needed. Not needed because Seaview Park is right nearby, as well as Sierra Park a very short distance away.
As a park, the property would not be subject to property taxes, causing the approximately $10,000 now being paid each year to be lost.
Not having 25 homes on the site would mean the loss of the opportunity for significant revenue that’s badly needed by our city.
Sales tax would be lost during the construction phase, as well as Real Estate Excise Tax (REET) when the homes are sold.
Property tax on the homes would be lost each and every year, as well as REET every time any of the homes are re-sold.
What kind of dollars are we talking about? Let’s assume these homes have an average value of $500,000, so the total project would aggregate to $12,500,000.
Let’s also conservatively assume that only 40 percent of the selling value is subject to sales tax; that’s a value of $5,000,000 that would yield $475,000 in sales tax of which the city would receive $42,500. The REET on the original sales would provide the city $62,500.
The property tax paid on these homes each year would be about $125,000, with the city receiving about $25,000 of it. Each time a home is resold, the city would receive REET of about $2,500.
Because the city does not receive a significant amount of the collected sales tax and property tax does not mean that Edmonds taxpayers do not benefit from those revenues.
Those revenues help to reduce the tax rates that we are assessed by the tax authorities, such as the Edmonds School District, that receive them.