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Report: Building up in Durango better than building out

Parts of Main Avenue provide model of efficient tax production

If the city encouraged more development of multistory buildings, it could reap far more taxes on the land than generated from single-story strip malls, according to a recent study.

Mixed-use multistory buildings along Main Avenue already generate much more tax revenue per acre than single-story commercial buildings, said Joe Minicozzi, owner of Urban3, a company focused on this kind of tax analysis.

This concept could be key for Durango because only 45 percent of the city is private, taxable land.

“I have never seen a city with this much nontaxable land,” Minicozzi explained while presenting his findings from a study on Durango Wednesday at the Strater Hotel.

Though, when it comes to generating property and sales taxes, Main Avenue is impressive on a per-acre basis.

For example, the strip mall at Town Plaza is worth only about $2,600 per acre. But just a few blocks east, the 700 block of Main Avenue is worth about $51,800 per acre, he said.

In some ways, however, it makes more financial sense to build a single-story building in Durango with a parking lot, as opposed to a three-story building with room for businesses and apartments.

“Our tax system is based on value. ... The cheaper the building, the lower the taxes,” Minicozzi said.

When it comes to total sales tax dollars, the Central Business District is less than $1 million behind South Durango, home to Walmart and Home Depot. But from 2004 to 2013, the Central Business District added just 17,000 square feet of commercial space. South Durango added 290,000 square feet.

Tim Wheeler, owner of the Durango Coffee Co., said increasing the number of multistory buildings along Main Avenue is an obvious way to increase the tax productivity and profitability of downtown.

“A very, very significant portion of those buildings are single story,” he said.

The benefit of density really struck him after a few buildings on the same block as his coffee shop burned in 2008 and his business plummeted as a result.

When other retail businesses opened on his block in mulitstory buildings, it boosted his business.

“Those impacts made me realize what would happen if there were even more people in those buildings,” said Wheeler, who helped fund the study with other local entities and the American Booksellers Association.

In addition to maximizing Main Avenue, there is also an opportunity to build more mixed-use buildings along North Main, Eighth Street and College Drive, said Durango City Councilor Christina Rinderle.

“You’re reducing sprawl and creating more vibrant in-fill,” she said.

The city is currently studying how to make North Main safer for bikes and pedestrians and identifying opportunities for redevelopment.

If the La Plata County Commission decides to move the fairgrounds to Ewing Mesa, that could free up significant space, said Commissioner Brad Blake.

But to make multistory development possible, Rinderle would like to see parking regulations relaxed. City codes currently create more of an incentive to build a single-story building with a parking lot rather than multistory buildings. Rinderle would like to see that reversed.

“If we were to redevelop downtown to today’s standards, every other building would be a parking lot,” she said.

Councilor Dick White anticipates that changing parking rules could be difficult.

More mixed-use buildings could push people to park in adjacent residential neighborhoods, and this spillover would likely create pushback from neighbors, he said.

While the city is studying redevelopment, it has already invested heavily in Wilson Gulch Road, a key piece to a new commercial district near Three Springs, that could be home to big box stores. The new road and adjacent infrastructure will cost the city, the county and other partners about $9 million.

White and City Manager Ron LeBlanc argue that this commercial district is necessary to stop residents from driving to Farmington to shop and spending millions of dollars that could contribute to local sales tax coffers.

“I think today’s marketplace has ended the days of downtown department stores,” White said.

mshinn@durangoherald.com

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