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4.3 Financial Impacts. The applicant suggests that an office project on the Everest site would enhance the residential property values to the east along Dellwood because the office and its landscaping would create a buffer and transition to residential uses. Staff review for past projects indicates that high quality projects with well done site planning and landscape buffering do not decrease values of adjoining residential properties. The City decision to designate this site for medium density housing did include a review and discussion of changes in value along borders between commercial and/or industrial properties and residential uses. Where possible, the City policy has been to use natural landmarks, streets, parks, or open spaces and (as a last resort) additional man-made buffers or transitions between uses to help mitigate the direct impact of a commerciallindustrial property on adjoining homes. By purposefully choosing a residential land use designation for this area along Hamline, the City understood that the maximization of property taxes on this site was not the only criteria for a better mix of community land uses. Hence, appraisals were not used to determine ultimate or highest and best return from a property sales or property tax basis - if this had been the adopted strategy, every minor arterial would be filled with office buildings and fast food restaurants. The Everest proposal estimates approximately 50,000 s.f. of building on three levels. Staff estimated a minimum value of $85/s.1.; the building would have a market value of $4,250,000, generating between $190,000 and $260,000 in new property taxes annually, of which 40% would be contributed to the area-wide fiscal disparity pool. Assuming no tax increment assistance, the annual net new property taxes would range from $114,000 to $156,000. The City would receive approximately 12% or $14,000 to $19,000 annually. (The School District would receive approximately 53%, the County approximately 28%.) Estimating the property taxes of a 32 unit senior housing project (10 units per acre on 3.2 acres) is more of a challenge. However, if a rental housing project pays full taxes, and the average property tax per unit is $1,200 annually, the net new property taxes would be approximately $38,400. (By way of comparison, six new single family homes valued at $130,000 would generate approximately $17,000 annually in net new property taxes,) 4.4 Land Use/Zoning Impacts. If the Comprehensive Plan land use designation for these seven parcels is changed from Medium Density Residential to Limited Business, rezoning of the property to B1, Limited Business, would be forthcoming. A recently passed State law requires consistency between the comprehensive plan land use designations and the zoning of the property by the end of 1998. If there is an inconsistency, the comprehensive plan's land use designation prevails. For this reason, the proposed change in the comprehensive plan land use designation is a de facto rezoning. Even if the applicant did not pursue a rezoning of the property, it would automatically convert to a B1 zoning district on January 1, 1999. PF#2978 ~ (01/14/98) ~ Page 8 of 11