The County is considering putting a 60,000 sq ft "Municipal Building" at the site of the LA Apartments - north side of Central. The reason given is that this will somehow enhance our economy. Really? The site is prime economic property – it is along Central, centrally located within the area 4th street to 20th, near banks, restaurants, shopping, and residential. How can retiring such property from potential economic use -- either as residential, commercial, retail, or mixed use – in any way enhance the over-all economy of Los Alamos? Indeed, retiring such land from economic use would represent a cost and loss to the Los Alamos economy. Would the promised increase in economic activity counter the decrease from retiring the space?
Some would say, "well, if we don’t do something the space will sit empty. It won’t be developed right away". There may be some truth to that – but consider the time frame. The proposed government building is supposed to stand for 75 for 100 years. That is 75 to 100 years during which time the land will be lost to economic activity. Do you really think it would take 75- 100 years to find productive economic use for the land? Do you really think it would sit empty for 75 - 100 years? The site originally had affordable housing on it, and realistically we could, at the least, build new affordable housing units again in fairly short order. The previous site owner had planned to fold the existing housing into a mixed use development – again, this is a much better use of the land and, with proper planning, could be accomplished within the next few years.
So how much does the Los Alamos economy lose if the land is retired from economic use for the next 75 - 100 years? Bear in mind that County has to build something somewhere – the question here is the cost to retiring privately develop-able land vs building on land which is not slated for, nor useable for, such private development. Let’s go through the list....................
1) there is the loss of direct economic activity -- commercial use, estimated at $100/sq ft revenue to the economy; retail use, estimated at $200/sq ft revenue to the economy.
2) there is the loss from parking – this is tricky because parking for the government building would be somewhat less than 100 % use as it would be "shared parking".
3) there would be the loss in subsidiary economic activity in goods/services purchased by the private user. For example, private owners contract out maintenance and janitorial services, government does not. The loss would be not only in the $ paid to such services, but in the loss of jobs and employment income which would then be spent in the economy.
4) cost of construction.
5) there would be the loss in tax revenues generated by the total of 1 - 4 above which are generally re-invested in the community.
6) monies pumped in to the economy are circulated in the form of spending/payments to other economic activities. This is called the multiplier effect increases total economic activity and revenues to the economy. The losses associated to the total of 1 - 5 above are subject to this multiplier. Right now the Los Alamos multiplier is fairly low, however this can change over time – and certainly over the span of 75 - 100 years.
Reality Check: There is a general principal that govenment buildings should retire the least amount of land from productive economic use as may be possible. And for good reason. The 60,000 sq ft boondoogle could easily result in a total loss to the Los Alamos economy upwards of 25 - 30 million dollars per year. For 75 - 100 years. In what fantasy nightmare does this constitute "economic development"?