Rethink81 White Paper June 2014

8/12/2019 Rethink81 White Paper June 2014

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The New York State Department of Transportation (NYSDOT) is currently considering three elevatedroadway and three street-level boulevard options for replacing the Interstate 81 viaduct between theUniversity Hill and Downtown neighborhoods in Syracuse. 1 This analysis was conducted to aid in theunderstanding of the consequences to property values and real estate tax revenue under either anelevated or a street-level scenario.

Alternative V- 2, was chosen as the viaduct scenario for this analysis due to its compliance with allfederal highway regulations. After the parcels that stand in or near this proposed path were identified,an estimate of the property value and real estate tax implications of building a viaduct that meetsNYSDOT and Federal Highway Administration requirements was compiled using public tax records.

The analysis then determined the approximate extent to which value could be created within thefootprint of the existing viaduct, if it is removed. To do so, measurements were obtained from streetlevel Alternative SL -1. A map of each alternative analyzed here is provided in Appendices I and II .

Based on the presentation renderings released for the DOTs Alternative V-2, 100 tax parcels in theDowntown and Northside neighborhoods of Syracuse would be seized or razed, and at least another 18would be adversely affected by virtue of their location immediately adjacent to the new highway. Thisresults in a potential loss of $85.5 million in property value, and an annual loss of up to $3.3 million inproperty tax revenue to the City of Syracuse, Syracuse City School District, and Onondaga County.Conversely, removing the viaduct would leave intact the current tax revenue, and has the potential tocreate an additional $138.8 million in value, yielding an increase in property tax revenue of about $5.3million each year. In terms of property taxes, the opportunity cost of building a new viaduct, definedhere as the loss in existing property taxes and the lost opportunity to generate additional tax on thisland, is $8.6 million annually or $431.4 million over the projected 50-year life of the structure.

Summary of FindingsElevated Viaduct "Alternative V-2"

Tax ParcelsPotential Full

Market Value LostPotential Annual

Taxes LostSeized/Razed Properties 100 $41,817,914 $1,608,684

Affected Properties 18 $43,633,206 $1,678,521

Total 118 $85,451,120 $3,287,205

Street-Level Boulevard "Alternative SL-1"

Developable Area Potential FullMarket Value

Potential AnnualTaxes Gained

Potential New Development 304,750 Sq. Ft. (7 acres) $138,836,555 $5,340,890

Net Forecasted Impact $224,287,675 $8,628,094

1 Weaver, Teri. Tunnel, depressed highway not recommended for I -81, NY DOT says. Syracuse.com. 23 Jun. 2014.


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Seized or Razed ParcelsThe 100 tax parcels that would require seizure or demolition to proceed with the Alternative V-2 viaduct currently have a market value of $41.8 million. Under present rates, the annual tax levy on thisvalue would be $1.6 million. All of this value is projected to be lost. These properties are listed in

Appendix III .

Many buildings that stand in the path of the proposed route are either historic or located within historicdistricts. Some of the structures that would need to be demolished to make way for this highwayinclude Websters Landing, Peck and Reid Halls, Nettleton Commons , Learbury Centre, and St. John theEvangelist Church.

Appendix VII contains images of selected buildings that would need to be razed to accommodate thisproject based on NYSDOTs presentation .

Affected Parcels

The 18 parcels identified in this analysis as affected do not abut the highway, yet under Alternative V -2, they would become adjacent to a viaduct. These parcels currently have a combined market value of$49.6 million, which would yield an annual tax bill of approximately $1.9 million under 2014 rates. IfAlternative V -2, is implemented, these properties may lose $43.7 million in value and contribute $1.7million less annually in property taxes.

The potential loss in value to these parcels was calculated using public tax information for a sample ofexisting properties located near Interstate 81 or 690. The properties analyzed near a viaduct have anaverage value of $55 per square foot of land, compared with $473 for those that are not. Therefore, an88% drop in value was applied to the 2014 market value and potential tax levy of affected parcels toestimate the effect of a new viaduct on properties that would be adjacent to it. Appendix IV summarizesthis calculation.

The affected list includes buildings such as the Lofts on Willow, Jefferson and Madison Towers, and 100Clinton Square. Appendix IV depicts the precipitous decline in value surrounding Interstate 81s currentviaduct, and Appendix V contains a list of affected properties and the predicted change in value to each.

Value Created by Removing the ViaductApproximately 7 acres of developable land that is currently owned by the NYSDOT is expected tobecome available as a result of removing the Interstate 81 viaduct and replacing it with a street-levelsolution. Although there are many ways to estimate the value of this land, this analysis concludes that it

could potentially be used to create $138.8 million of property value, adding $5.3 million in revenue eachyear to city and county tax rolls.

To estimate the potential value of this land, information from public tax records was collected for asample of buildings representing the types of structures that could be built in this space. The sampleincludes office and professional buildings, hotels, apartments, institutional space, and mixed-usebuildings from both University Hill and Downtown. The buildings are primarily newly-built or recentlyrenovated to simulate the effect of new construction along a boulevard. Each property s market value


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per square foot of land was calculated, and the average of this value was applied to the land area freedfor development along the current route of the Interstate 81 viaduct between Downtown and UniversityHill.

Appendix II shows the size and location of land analyzed for potential development, and Appendix VI

details the calculation used to estimate potential value cr eated by the viaducts removal.

MethodologyThis analysis identified specific parcels that would be affected by the Alternative V -2 plan, regardlessof the parcels current state. Once these parcels had been identified, the full market value from currentpublic tax records was used to determine the value of the impacted properties. All potential tax figureswere calculated by multiplying these values by the current tax rate for parcels in the City of Syracuse($38.4689 per $1,000 of value for 2014).

The result does not account for any appreciation in property value or an increase in tax rates over time.It also does not attempt to quantify the effect on property values near the current highway, whereadditional development may occur if the viaduct is removed. These factors may magnify the potentialimpact of choosing a street-level solution over a viaduct, and consequently the effect on property valuesand tax revenue may actually be much greater than stated in this report. Other communities haveexperienced significant increases in property values when removing urban viaducts. For specificexamples, please visit www.rethink81.org .

ConclusionThe value of a number of parcels through the City of Syracuse will be significantly affected by the newlocation of Interstate 81. As shown in this analysis, a new viaduct may remove $85.5 million in propertyvalue through seizures and the devaluation of nearby land. A street-level solution, however, couldresult in the net creation of $138.8 million in value. The opportunity cost associated with building theviaduct, expressed here as the $224.3 million difference in property values and $8.6 million in annual taxrevenue between these options, highlights the significance of this decision.

The community must consider the highest and best use for the land in question: Do we want toconstruct an elevated highway that is bigger, wider and will require significant property takings anddisplacement in our neighborhoods? Or, do we want to enhance our building stock and create economicopportunity by fostering uses that encourage growth of our tax base and the creation of new productivebuilt space in Syracuses urban core in which Central Ne w Yorkers will live, work, and play?


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Appendix I. Map of Proposed Viaduct Alternative V -2


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Appendix II. Map of Proposed Street-Level Alternative SL-1


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Appendix III. Properties to be Seized/Demolished for Interstate 81 Viaduct "Alternative V-2"

Tax ID Property Street Building Type2014 Full

Market ValuePotential Tax

Revenue

104.-02-02.0 220 Herald Place Office Bldg $876,074 $33,702104.-02-01.0 200-10 Herald Place Billboard $270,675 $10,413

104.-09-11.0 212 North Franklin St. Att Row Bldg $309,202 $11,895

104.-04-01.0 106-24 Herald Place Parking Lot $202,454 $7,788

104.-03-02.2 493 Oswego Blvd. Vacant Comm $122,699 $4,720

118.-09-01.2 499 Oswego Blvd. Vacant Comm $273,620 $10,526

103.-21-02.0 516 East Water St. Parking Lot $242,945 $9,346

103.-13-01.0 500 Erie Blvd. East Manufacture $582,577 $22,411

103.-21-01.0 500 East Water St. Parking Lot $62,822 $2,417

103.-25-09.0 205 South Townsend St. Converted Res $170,552 $6,561103.-21-09.0 501 East Washington St. Det Row Bldg $490,798 $18,880

103.-21-06.0 517 East Washington St. 1 Use Sm Bld $426,994 $16,426

102.-06-03.0 550 East Genesee St. Office Bldg $752,147 $28,934

102.-04-02.0 555 East Genesee St. Office Bldg $981,595 $37,761

103.-24-02.0 603 East Fayette St. 1 Use Sm Bld $195,092 $7,505

102.-05-01.0 601 East Genesee St. Spec School $2,834,356 $109,035

103.-14-01.0 421 East Water St. Branch Bank $388,834 $14,958

103.-25-06.0 507 East Fayette St. 1 Use Sm Bld $242,945 $9,346

103.-25-07.1 505 East Fayette St. Det Row Bldg $687,117 $26,433

103.-25-01.0 506 East Washington St. Office Bldg $674,847 $25,961

104.-06-02.0 128 North Warren St. Det Row Bldg $650,307 $25,017

104.-03-01.0 One Websters Landing Office Bldg $1,625,767 $62,541

008.-09-01.0 1025 North State St. Other Storage $577,914 $22,232

103.-08-02.0 106 Burnet Ave. Parking Lot $21,104 $812103.-09-05.0 107 Brown St. Vacant comm $12,147 $467

103.-08-03.0 112-16 Burnet Ave. Apartment $171,779 $6,608

008.-20-01.0 117 Butternut St. Other Storage $368,098 $14,160

103.-09-04.0 117 Townsend St. Office Bldg $244,172 $9,393

103.-09-01.0 122-24 Burnet Ave. Manufacture $658,896 $25,347

103.-08-01.0 128 North State St. Vacant Comm $44,172 $1,699

103.-09-02.0 128-30 Burnet Ave. Vacant Comm $20,245 $779

103.-09-03.0 132 Burnet Ave. Det Row Bldg $139,877 $5,381

103.-10-01.0 200 Burnet Ave. Converted Res $116,564 $4,484

017.-13-16.0 200-04 East Belden Ave. Det Row Bldg $450,307 $17,323


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Revenue

103.-10-02.0 204 Burnet Ave. Manufacture $55,215 $2,124

017.-22-02.0 209 North State St. Com Vac w/Imp $57,669 $2,218

103.-10-03.0 210 Burnet Ave. Converted Res $73,620 $2,832103.-10-04.0 212 Burnet Ave. Det Row Bldg $119,018 $4,578

017.-21-14.0 214 North State St. Converted Res $306,748 $11,800

017.-22-01.0 215 North State St. Culture bldg. $466,258 $17,936

103.-10-05.0 216 Burnet Ave. Manufacture $282,209 $10,856

103.-11-01.0 300 Burnet Ave. Prof Bldg $245,399 $9,440

103.-11-02.0 306 Burnet Ave. Other Storage $60,000 $2,308

103.-11-03.0 308 Burnet Ave. Converted Res $155,828 $5,995

103.-11-04.0 312 Burnet Ave. Det Row Bldg $61,350 $2,360

103.-11-05.0 314 Burnet Ave. Converted Res $98,160 $3,776103.-11-06.0 316 Burnet Ave. 1 Use Sm Bld $83,436 $3,210

017.-01-02.0 319-25 North Salina St. Det Row Bldg $503,067 $19,352

103.-11-07.0 320 Burnet Ave. Apartment $79,755 $3,068

017.-14-02.0 320-24 Pearl St. Manufacture $282,209 $10,856

103.-11-08.0 322-24 Burnet Ave. Restaurant $89,571 $3,446

017.-22-03.0 323-35 James St. Det Row Bldg $782,822 $30,114

017.-01-01.0 329 North Salina St. Office Bldg $3,558,282 $136,883

017.-12-16.0 330 North Salina St. Att Row Bldg $126,380 $4,862


030.-05-01.0 400 Burnet Ave. Other Storage $368,098 $14,160

017.-13-10.0 400 Pearl St. Other Storage $79,755 $3,068

017.-02-14.1 401-11 North Salina St. Att Row Bldg $417,178 $16,048

017.-13-11.0 404 Pearl St. Manufacture $138,650 $5,334

017.-21-13.0 407 James St. Gas Station $723,926 $27,849

103.-03-01.0 408-22 James St. Apartment $1,694,479 $65,185

017.-13-12.0 410 Pearl St. Att Row Bldg $184,049 $7,080

017.-13-13.0 412 Pearl St. Det Row Bldg $233,129 $8,968


017.-13-14.0 416 Pearl St. Converted Res $76,074 $2,926


017.-13-15.0 418 Pearl St. Det Row Bldg $105,521 $4,059





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Revenue



017.-02-05.0 447 North Salina St. Att Row Bldg $171,779 $6,608017.-02-04.0 449 North Salina St. Att Row Bldg $159,509 $6,136

017.-12-12.0 500 Pearl St. Converted Res $47,607 $1,831

017.-12-13.0 502-04 Pearl St. Converted Res $67,485 $2,596

017.-12-15.0 506-24 Pearl St. Parking Lot $55,337 $2,129

017.-01-03.0 514 Oswego Blvd. Vacant Comm $123 $5

017.-02-03.0 701 North State St. Det Row Bldg $98,160 $3,776


017.-02-01.0 707-09 North State St. Det Row Bldg $460,123 $17,700

008.-20-02.0 801 North State St. Vacant Comm $62,086 $2,388008.-09-08.0 899 North State St. Vacant Comm $41,840 $1,610




008.-09-04.0 921-25 North State St. Vacant Comm $62,086 $2,388

008.-09-03.0 931 North State St. Parking Lot $43,558 $1,676

030.-06-05.1 701 Erie Blvd. East Health Bldg $640,491 $24,639

104.-05-01.0 123-29 East Willow St. Det Row Bldg $437,055 $16,813

017.-14-01.0 301-19 North State St. Apartment $4,785,276 $184,084

103.-03-3.0 110 South McBride St. Other Storage $87,975 $3,384

103.-03-5.0 521-27 East Washington St. 1 Use Sm Bld $184,049 $7,080

103.-03-10.0 115 South Townsend St. Att Row Bldg $37,914 $1,459

103.-03-11.0 109 South Townsend St. Manufacture $121,472 $4,673

103.-03-12.0 105 South Townsend St. Manufacture $145,890 $5,612

103.-25-04.0 513 East Fayette St. Office Bldg $375,460 $14,444

102.-06-04.0 600 East Genesee St. Prof Bldg $3,315,337 $127,537

118.-07-05.0 420-24 North Franklin St. Restaurant $245,399 $9,440

118.-07-06.0 428 North Franklin St. Bar $343,558 $13,216Total $41,817,914 $1,608,684


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Appendix IV. Summary of Depressed Property Value Adjacent to Existing Viaduct

SampleNumber of

ParcelsLand Area (Sq. Ft.)

Value per LandSq. Ft.

Near Existing Highways 10 572,935 $55Away from Highways 11 358,832 $473

Difference ($417)

Percentage Impairment (88%)

Graphics Based on Actual Assessed Property Values per Acre in Onondaga County 2

2 Source: Downtown Committee of Syracuse Archives

Land analyzed near the

current viaduct is worth

only 12% as much as other

land in Downtown andUniversity Hill


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Appendix V. Properties Affected by Interstate 81 Viaduct "Alternative V-2"

Tax ID Property Address Building Type

2014 Full

MarketValue

PotentialChange in

Value AfterViaductConstruction

PotentialChange in Tax

RevenueAfter ViaductConstruction

104.-09-08.0 230 West Willow St. Det Row Bldg $2,969,325 ($2,613,006) ($100,520)

104.-09-06.0 315 North Clinton St. Converted Res $265,031 ($233,227) ($8,972)

104.-09-09.1 234 West Willow St. Restaurant $1,120,245 ($985,816) ($37,924)

104.-12-01.0 300 West Genesee St. Bar $392,638 ($345,521) ($13,292)

104.-07-07.0 100 Clinton Square Office Bldg $819,018 ($720,736) ($27,726)

104.-07-05.0 114 North Salina St. Vacant Comm $245 ($216) ($8)

104.-07-06.0 120 North Salina St. Vacant Comm $1,350 ($1,188) ($46) 104.-07-13.0 136 North Salina St. Parking Lot $357,669 ($314,749) ($12,108)

103.-03-04.0 454 James St. Motel $1,030,675 ($906,994) ($34,891)

103.-14-02.0 400 Erie Blvd. East Mini-mart $711,656 ($626,257) ($24,092)

103.-20-01.0 110 South Townsend St. Auto Body $539,877 ($475,092) ($18,276)

104.-08-01.0 101 North Salina St. Manufacture $18,141,104 ($15,964,172) ($614,124)

102.-06-02.0 500 East Genesee St. Branch Bank $1,187,730 ($1,045,202) ($40,208)

103.-20-05.0 441 East Washington St. Auditorium $208,589 ($183,558) ($7,061) 102.-06-05.0 50 Presidential Plaza Apartment $7,963,190 ($7,007,607) ($269,575)

104.-09-01.0 221 Herald Place Att Row Bldg $251,534 ($221,350) ($8,515)

104.-09-12.0 214 North Franklin St. Att Row Bldg $184,049 ($161,963) ($6,230) 102.-06-06.0 60 Presidential Plaza Apartment $13,439,264 ($11,826,552) ($454,955)

Total $49,583,189 ($43,633,206) ($1,678,521)

Projected Property Values After Viaduct Construction $5,949,983 Projected Property Tax Levy After Viaduct Construction $228,889

Note: Change in value and tax assessment after viaduct construction are calculated as 88% of 2014value and potential tax assessment, based on an analysis of value and taxes assessed to propertiesadjacent to an existing viaduct compared with those that are located away from a highway.


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Appendix VI. Calculation of New Value Created by Removing Viaduct

Building Address UseLot Size(Sq. Ft.)

Full MarketValue

Full MarketValue Per

Land Sq. Ft.

250 Building 250 S. Clinton St. Office 48,312 $13,496,933 $279

Washington Station 333 Washington St. Office 53,814 $13,258,896 $246

Deys Plaza 401 S. Salina St. Mixed 54,648 $10,661,104 $195

Merchants Commons 220 S. Warren St. Mixed 17,577 $9,948,466 $566

Hogan Block 247 W. Fayette St. Mixed 9,772 $2,453,988 $251

Jefferson Clinton Hotel 416 S. Clinton St. Hotel 8,309 $7,116,564 $856

One Lincoln Center 110 W. Fayette St. Office 20,848 $20,613,497 $989

Inns at Armory Square 300 W. Fayette St. Hotel 55,123 $20,981,595 $381

Physicians' Office Building 725 Irving Ave. Prof Bldg 20,581 $14,110,429 $686

CNY Biotech Accelerator 821 E. Fayette St. Institutional 34,868 $11,717,791 $336

Campus West 150 Henry St. Apartments 73,915 $19,906,748 $269

Park Point 417 Comstock Ave. Apartments 34,980 $14,417,178 $412Total Value $158,683,189

Average Value Per Sq. Ft. $456

Potential Buildable Land Gained (Sq. Ft.) 304,750Potential Value Created from New Construction $138,836,555

Potential Increase in Tax Revenue (Mill Rate = 38.4689) $5,340,890


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Appendix VII. Images of Selected Buildings Requiring Demolition for Interstate 81 ViaductAlternative V-2

Images 1 - 4. Clockwise from top left: Reid Hall, St.John the Evangelist Church, Smith RestaurantSupply, Peck Hall.

Source for Reid Hall: Syracuse University ArchivesSource for Other Images: Syracuse.com


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Images 5 - 8. Clockwise from top left: 123 East Willow St., One Websters Landing, Nettleton Commons, LearburyCentre. Source: Google

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Rethink81 White Paper June 2014