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Economic Development – Measuring the Returns

A Blighted Project Case Study – Perkasie, PA

Perkasie Borough is a charming, Victorian-era town with 8,500 residents. It’s branded tagline is “America’s Hometown,” for its Norman Rockwell-like setting and beauty. Perkasie boasts America’s Oldest Tree Lighting Ceremony dating to 1909 and recorded with the US House of Representatives.

Perkasie’s Town Center was largely destroyed by fire in 1988. There had been no major development of any kind for 20 years. Perkasie’s dynamic Borough Council initiated a new visioning and forward thinking Comprehensive Plan in 2013 and hired Barth Consulting Group to collaborate with the Bucks County Planning Commission who produced the plan.

Case Study: Perkasie Borough, PA

  • Redeveloping a blighted, 16-acre Industrial Complex
  • 165,000 sq/ft industrial building
  • High visibility industrial building bordering two parks and shopping center.

Challenges:

  • Company closes
  • Declares Bankruptcy
  • Lays off 50 employees
  • $4 Million Foreclosure Note
  • $1.5 Million DEP Environmental Clean-Up
  • 165,000 sq/ft Industrial Building crumbling and in poor condition
  • BCG courts multiple industrial tenants
  • The $5.5 Million base cost, plus $2.0 Million in renovations do not make this parcel feasible for redevelopment.  Existing industrial properties available that are one third the price.

Solution:

  • Property sits between two municipal parks
  • Appropriate zoning should be residential
  • Changed zoning from industrial to residential
  • Courted residential town home developers
  • Swapped residential zoning of existing industrial park to retain zoning balance

Economic Development – The Results

  • Perkasie Woods – Ryan Homes
  • 144 – Unit Townhome Complex
  • 101 – Sold as of September 2018 – Average Sale price $345,000
  • Real Estate Transfer Taxes – 101 units @ $345,000 = $34,845,000 @ .5% = $174,225
  • Developer Impact Fees – 1x Dedicated to Parks = $1,500 per unit x 101 = $151,000
  • Perkasie Borough Electric- 1x Tapping Fees = $1,500 per unit = $151,000
  • Perkasie Borough Electric = Approximately $2,000 per household x 101 = $202,000 annually
  • Perkasie Regional Water Authority – 1x Tapping Fees = $979,200
  • Average Household Income = $100,000 x 101 = $10,100,000 Total Income
  • Earned Income Tax on $10,100,000 @ .5% = $50,500 annually
  • New Disposable Income to Perkasie = $10,100,000 supporting all goods and services

The Upside of Economic Development – How the Community Benefits:

menlo-park

  • $100,000 of developer impact fees went directly to Menlo Park for playground improvements and new equipment.
  • Enhancements included-
  • Air Walker (Zip Line)
  • Spiral Adventure (Jungle Gym)
  • Slides
  • Hexagon Net (Spider Web)
  • Swings
  • Improvements to existing  Pavilion
  • Improvement to Parks drainage system

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