The three issues behind an incorporation vote in a Utah suburb

After writing earlier this week about the decisions of The Woodlands, Texas to not incorporate, here is the story of the Salt Lake City suburb of Millcreek that is considering incorporation on election day:

To supporters, a city would cobble together a few suburban neighborhoods into a more perfect union. After years of living at the whims of county codes and tax rates, residents of Millcreek said they would, for the first time, be able to keep their tax dollars inside their own borders and write their own future…

Opponents say the status quo works fine. Forming a city would heap municipal rules and expenses atop existing layers of county, state and federal bureaucracy. They say a new city would need money for lawyers, accountants, city buildings and other services now provided by the county, and ultimately be forced to raise taxes.

In 2011, an independent study said that Millcreek’s economics, population and geography would make it a “viable and sustainable” new city. But it also said the area was mostly built-out and had few new opportunities for development, raising the prospect that its expenses would outstrip the money it takes in. If Millcreek goes its own way, the surrounding county would also stand to lose $30 million in annual revenues from one of its wealthiest areas, and be forced to cut services or raise taxes on other residents.
If the measure fails, some residents say they are worried the community will be torn apart. At a time when city budgets are strained, they say that Millcreek’s Home Depot, its for-profit hospital and supermarkets would make ripe targets for annexation by nearby cities.

It sounds like there are a few issues present. First is the issue of revenues. Could an incorporated community afford the services it would be expected to provide? Would it increase the local tax burden, something many suburbanites abhor. Second is the issue of annexation. Incorporation typically provides a community more protection against adjacent communities annexing land. this article suggests what is most at stake are revenue sources such as retail and commercial establishments and perhaps job providers as well.

Though not stated here, I imagine there is also a third issue: the tension between individualism and communitarianism that is often present in American suburbs. On one hand, the suburbs offer homeownership, small parcels of land, the idea that individuals have a little space in which to live their own lives. On the other hand, suburbs, even unincorporated ones, require services such as roads, sewers, schools, police and fire protection, and more that is more easily realized when people pool their resources (tax dollars). Can you have a fully developed community life if individualism wins out? Is community, not just services but also strong and weak ties to neighbors and others in the community, desired by a majority of American suburban residents?

Quickly, some Census statistics about Millcreek: it has just over 62,000 residents; the median household income is $57,385 (about $1,000 above the median for Utah), is 87.2% white and 8.4% Latino, and 41.9% of adults have a bachelor’s degree.

One other note: the article suggests “the election here next Tuesday is a fight about what happens as America’s suburbs grow up.” This is a typical phase that many suburbs go through though it is a bit unusual, as it is for The Woodlands, for a community to grow so large and still not be incorporated.

A new process to designate historic districts in Salt Lake City

After a contentious recent debate over a possible historic district, Salt Lake City decided to redesign the process:

The goal of the whole exercise is to preserve historic neighborhoods or just plain nice, older neighborhoods from demolitions, outsized remodels and McMansions. The new process can lead to a historic district or landmark site, or it can lead to something less restrictive called a character conservation district.

In both cases, property owners can start the ball rolling by circulating a petition. If 15 percent of property owners within the proposed district sign petitions within six months, the Historic Landmark Commission and the Planning Commission write reports and hold hearings. Ballots would then be mailed to all property owners of record, who would have 30 days to vote for or against the district. If a simple majority supports designation, then a simple majority vote of the City Council could create it. If less than a simple majority of property owners favors a district, then a two-thirds vote of the City Council would be required to create a district.

As you can see, this is not a pure democracy. The City Council could create a district even if a majority of property owners voted against it. But zoning by referendum is not a good idea, either, because sometimes the public interest should trump the wishes of property owners.

A petition to designate a district also could be started by the mayor or by a majority of the City Council, but the same signature and voting processes for property owners would apply.

Lots of communities with established neighborhoods struggle with this issue: how to balance the concerns of property owners and neighborhood residents? This new process seems to put the onus on the voters who have an interest in each neighborhood; if they have a strong opinion about a historic district, they have time to vote. And it seems like the process recognizes the potential for another common issue that arises in communities: how to get enough people to participate in order to reach a consensus? The threshold for moving a petition to the City Council only requires 15% of property owners to be involved and later, the Council can approve a historic district with less neighborhood involvement.

I would be interested to see how well this new procedure fares. These sorts of cases between communal and personal interests are not easy to sort out, particularly when the potential large teardown McMansions are involved. Neighborhoods do change over time but local residents who bought into or who are used to a particular atmosphere or character can be quite resistant.

Of malls, Mormons, mammon, and Mitt

A long article in Bloomberg Businessweek on “How the Mormons Make Money” discusses City Creek Center, a $2 billion “megamall” development that opened in March 2012 “directly across the street from the church’s iconic neo-Gothic temple in Salt Lake City”:

The mall includes a retractable glass roof, 5,000 underground parking spots, and nearly 100 stores and restaurants, ranging from Tiffany’s (TIF) to Forever 21. Walkways link the open-air emporium with the church’s perfectly manicured headquarters on Temple Square. Macy’s (M) is a stone’s throw from the offices of the church’s president, Thomas S. Monson, whom Mormons believe to be a living prophet.

On the morning of its grand opening, thousands of shoppers thronged downtown Salt Lake, eager to elbow their way into the stores. The national anthem played, and Henry B. Eyring, one of Monson’s top counselors, told the crowds, “Everything that we see around us is evidence of the long-standing commitment of the Church of Jesus Christ of Latter-day Saints to Salt Lake City.” When it came time to cut the mall’s flouncy pink ribbon [press release here], Monson, flanked by Utah dignitaries, cheered, “One, two, three—let’s go shopping!”

Watching a religious leader celebrate a mall may seem surreal, but City Creek reflects the spirit of enterprise that animates modern-day Mormonism.

A few thoughts and questions:

1.  A new, $2 billion retail development seems quite aggressive given the current business climate.  Then again, Utah seems to be faring much better than the rest of the U.S. economically.  The state averaged a 6.7% unemployment rate during 2011, 11th out of 50 states (+DC), according to the Bureau of Labor Statistics (BLS).  More specifically, Salt Lake City’s 2011 rate was even lower at 6.5%, putting it at 52 out of 372 major metropolitan areas.  (If you’d like to see Utah’s unemployment rate over time and/or compare it with other state(s), Google has a wonderful interface for interacting with the BLS’ public data here.)

2.  City Creek Center (official webpage here) seems to be neither a traditional mall nor a “lifestyle center“.  Rather, it sprung fully formed within its urban environment (which no doubt contributed to its multi-billion dollar cost) as a rebuilding of Main Street rather than a “Main Streetification”.  If successful, could it usher in a new era of high-dollar, high-stakes urban retail (re)development?  Or does City Creek Center’s strong ties to LDS businesses constitute circumstances so special that they cannot be duplicated elsewhere?

3.  The Bloomberg article seems to connect City Creek Center to Mitt Romney, stating,

It’s perhaps unsurprising that Mormonism, an indigenous American religion, would also adopt the country’s secular faith in money. What is remarkable is how varied the church’s business interests are and that so little is known about its financial interests. Although a former Mormon bishop is about to receive the Republican Party’s presidential nomination, and despite a recent public-relations campaign aimed at combating the perception that it is “secretive,” the LDS Church remains tight-lipped about its holdings. It offers little financial transparency even to its members, who are required to tithe 10 percent of their income to gain access to Mormon temples.

The unstated implication seems to be that Romney’s savvy and secrecy with his own finances is somehow related to the LDS Church’s savvy secrecy with theirs.  Is this a fair conclusion to draw?  Is Bloomberg suggesting that there is something inherent within Mormonism that mandates this particular way of doing business?

 

Housing, IP, and Disney

A New York Times article from last week reports on the convergence of housing, intellectual property, and the Walt Disney Corporation in a recently built suburban home near Salt Lake City:

The sherbet-colored structure sits at the intersection of Meadowside Drive and Herriman Rose Boulevard here, but you don’t need directions to find it. Just look for the swarm of helium-filled balloons that the developer tied to the chimney of a house that has a gabled roof, scalloped siding and a garden hose neatly coiled next to the porch — all details taken from “Up,” the 2009 hit about an old man and his flying abode.

Developer Blair Bangerter duplicated Pixar’s Up house with as much fidelity as physical reality would allow.  And he got permission to do this from Disney!  As the article notes, getting such permission from Disney is highly unusual:

This is a company that once forced a Florida day care center to remove an unauthorized Minnie Mouse mural. More recently, Disney told a stonemason that carving Winnie the Pooh into a child’s gravestone would violate its copyright [though it later “reversed its ruling on that Winnie the Pooh tombstone after the news media reported the rejection”].

So how is a homebuilder in this Salt Lake City suburb getting away with selling a near-identical copy of the floating house in the Disney-Pixar film “Up”?

Although Disney declined to comment for the story, the article suggests several reasons:

  • The developer is the son of a former Utah governor.
  • The developer was able to convince Up‘s director, Pete Docter, to “personally intervened on behalf of the project.”
  • Disney “is trying to evaluate with more care the hundreds of requests it receives a month from people wanting to use its characters and imagery.”

Taking these suggested reasons at face value, it sounds like Mr. Bangerter obtained permission primarily because (a) he was well-connected and (b) Disney sensed a PR opportunity.  There are at least two ways of interpreting this:

  1. Bangerter and Disney saw a market opportunity and bargained to create value.  Most homes in the subdivision are priced around $300,000; the Up home is listed at $400,000.  Disney is often seen as an IP bully; it now looks a bit nicer.  Thus, a deal between Bangerter and Disney created almost $100k in new economic value for the developer and (possible) new goodwill towards Disney.
  2. IP is being used here to create an unnecessary monopoly rent to benefit the already well-connected.  It’s hard to see how Disney would suffer any economic loss if everyone were free to build Up houses–Disney is in the business of selling media and related merchandise, but generally not houses.  However, since everyone is presumably not free to build Up houses, Bangerter and Disney had to spend time and money hammering out an agreement.  As a result of their agreement, Bangerter (apparently) gets ~$100k more for the Up house than he gets for comparable houses in the subdivision, and Disney successfully pacifies a politically powerful developer.

Especially insofar as Disney only considers such deals with well-connected developers like Bangerter, the IP issues quickly blur into fairness issues.