The plan could just as easily be called PILOTTWACNAWBCFTFOTEL (Payment In Lieu Of Taxes That We Aren't Collecting Now And Won't Be Collecting For The Foreseeable Future On This Empty Land).
You may have heard that "Lafayette is getting a Costco." Not quite true yet. But we can get a Costco, along with lots of other cool stuff, if a governmental tool is used, prudently and effectively, to allow a non-income producing tract of land to develop to its true potential.
Got an extra $350 in your bank account? What'll that get you? One tire for your car? Your August utility bill? Laughed out of the ER next time you drop a heavy object on your toe? Yet that is what the open prairie between Lourdes' Hospital and Kaliste Saloom Road is pumping into Lafayette's tax coffers each year. That prime real estate is generating just enough tax income to buy a family pack of Cajuns' football season tickets (which, by the way, you should do soon).
Were that area to be developed, the necessary road construction (nearly two miles) and drainage improvements are so expensive that a developer's return on investment is just too small to be worthwhile. However, Lafayette's Industrial Development Board has the opportunity to approve a plan for the proposed Costco site whereby the developer pays, upfront and at their own risk, for all of the infrastructure. The city would then, effectively, pay those costs back by waiving the newly increased property tax collections from the development for up to 12 years.
The plan is called PILOT (Payment In Lieu Of Taxes). That's an especially convenient acronym considering that the plan should be called PILOTTWACNAWBCFTFOTEL (Payment In Lieu Of Taxes That We Aren't Collecting Now And Won't Be Collecting For The Foreseeable Future On This Empty Land). Like President Durel, my gut reaction to tax manipulation schemes as a business lure is always uneasy. Once you dig into the plan for this development though, it become clear that it is essentially a no-risk venture for Lafayette.
Under the proposed plan, the city gets new roads and sidewalks, improvements to existing streets, utilities and drainage work at no upfront cost, plus a police substation donated by the developer. LUS gets new commercial customers. In the retail phase, the developer creates an attractive shopping center with desirable retail and food service, and the capacity to add multi-family, office and hotel space in the immediate future. The people of Lafayette get boosted net-new sales/inventory taxes (estimated at $325K annually), 2,000+ construction jobs and 1,000+ permanent jobs. After the 12-year PILOT term (the debt could be retired sooner), the Costco anchored retail site alone will be paying over $600,000/year in property taxes. I'm no math whiz, but that's at least $600,000 more than the land currently brings in.
The PILOT proposal is limited to property taxes. The city, parish and school board will still collect both sales and inventory taxes, which are projected to be approximately $10 million per year once the project is quickly stabilized. I had the (dis)pleasure of sitting through last week's school board budget meeting and I know a lot of teachers and parents who would be elated to see any increase in the school system's revenue stream. Those increases would be seen immediately upon opening the project's doors in late 2015. While some of those sales will be drawn from existing retailers, it is a certainty that many sales dollars will come from "outsiders" coming in for destination shopping trips at businesses currently found only across the Basin or the Texas border.
We all love small businesses and the soul that they give our city. We all "Buy Leauxcal" and "Eat Lafayette," but the hard truth is that small, local retailers and restaurants are already priced out of certain corridors within the city. While the proposed tenants of the Costco site may not be businesses of local origin, a good number will rely on local franchisees for their operations. Big boxes may not be everyone's dream tenant, but a look at the site plan shows that the proposed development is done with a mind toward aesthetics and an effort to fit within the newly adopted Comprehensive Plan.
Lafayette's Comprehensive Plan calls for this quadrant of the Kaliste Saloom/Ambassador intersection to be a mixed use development. The current Costco project is in line with that goal. The proposed retail site takes up less than 60 acres of the 120+ acres available. Access to a well-planned retail development will be the carrot on a stick to bring residents to future housing on site. The proposed roads are part of the city's goal to connect Verot School Road with Settlers Trace Boulevard and would give drivers a way to avoid the busy Kaliste Saloom and Ambassador Caffery intersection. (You'll get to the hospital more quickly when you drop that heavy object on your toe.)
This isn't local money running through the federal government to build a park in Nebraska. It's not local money running through the state to lure a factory to Monroe. This is Lafayette choosing to use no risk, creative financing to benefit the people of Lafayette. Let's get past political philosophy and seize a great opportunity to continue Lafayette's upward trajectory as a destination, not just a pit stop.
Resident and fan of Lafayette (for a long time to come, I hope)