Paid consultant Glenn Dorfman made the claim that developer fees cover the cost of development. As it turns out he didn’t actually check the facts. But I did…
Despite making this claim to the city council and chamber, the claim was never actually checked. This is really too bad since the data was easily available. I called him on his lack of research and did the research myself. The State of Minnesota requires cities to fill out a document called, “Municipal Construction and Development Fee Revenue and Expenses Annual Report.” This is required by M.S. 16B.685 / 326B.145. This document shows how much we spent on development and how much we collected in fees and assessments.
The data shows that over the course of this 8 year period taxpayers paid an average of $26.95 million for development and got back $7.4 million. So we were giving an average subsidy of $18.55 million per year. By comparison, Rochester’s total tax levy is only $46 million.
After seeing the amount of subsidies we are giving I feel like I need a shower. I didn’t even get a thank you note. Easily accessible public data shows Glenn’s statement and the claims of many in the development community are false.
Our 4% of jobs in the construction industry are important, but so are our other 96% of jobs that don’t see this kind of subsidy. Further, if we continue these subsidies we have a right to demand much higher standards that the kind of development we see in places like 22nd Ave. NW.