A recurring argument against land conservation is that it does not contribute to a town's tax base. Conversely, it is often argued that development improves a town's financial status due to new tax revenue streams. Prior sections in this study have sought to take a closer look at this generalized stereotype of conservation and development. Scarborough's COCS study revealed that the Town incurs the greatest deficit per acre and per resident in Residential land-use. Other COCS studies have all shown that Open Space provides a net benefit to town financial situations - they derive little revenue but require even less in services.
In addition to the fiscal relationship of Open Space to town budgets, there are other economic benefits that should be considered in town planning processes. This section will seek to identify Scarborough's Open Space areas that can be regarded in an economic fashion. As stated earlier, Open Space efforts often dwell on the non-economic factors (philosophical, wildlife concerns, etc.). Open Space, however, can also be viewed as an economic resource and industry. In today's era of diminishing federal and state assistance and citizen property tax revolts, this economic perspective of Open Space can offer planners and citizens more detailed and relevant information on the significance of different land-uses.
Scarborough's Open Space inventory revealed many areas that derive economic benefits. They include: Lobstering, Clamming, Fishing, Forestry, Agriculture, Tourism, Recreation, and Beach Revenues. Less obvious and more difficult to quantify are: the Marsh and Wetlands, Soil Conservation, and Real Estate Valuations next to Open Space areas. This section will take a closer look at these types of Open Space-related areas. In doing so, it will try to identify their economic significance to the Town of Scarborough.
Two establishments - Bayley's Lobster, Inc. and the Pine Point Fisherman's Co-Op - rely on the health of Saco Bay's lobster population and both buy primarily from local lobstermen. There is also a seasonal seafood restaurant at Pine Point that buys locally. In 1992 there were 33 lobster boats registered in Scarborough, with some being convertible for other uses and about 60 lobstermen. [1] Their catch equaled roughly $1 million in landings which translated into an extra $1 to $1.5 million in additional income generated from the lobster-industry. [2] This figure does not include the significant income from lobster-related retailing such as seafood restaurants, food stores, fish markets, lodging businesses, etc.. [3]
With a vast acreage of clam flats and productive marshland, Scarborough's clamming has been a part of the Town's heritage for many years. Most of the Town's recent clamming has been depuration harvesting due to pollution problems. Scarborough has one depuration plant - Thurlow's Shellfish - which operates year-round (for Scarborough and regional areas) and employs three people. [4] 1991 income derived from local clamming and processing was estimated to be approximately $87,000. [5] This figure, again, does not include related income derived in restaurants, seafood shops, etc. In addition to commercial licenses, in 1994 the Scarborough Town Clerk's Office issued 170 Recreational Clam Licenses. [6] Clamming has been a cyclical industry with many ups-and-downs over the years. With many areas closed, Scarborough hopes that its shellfish management program will revive this industry to prior, better times.
Although Scarborough's main marine industries are lobstering and clamming, there are other livelihoods that depend on the Bay. In 1991, there were 64 commercial vessels registered in the Town's Harbor. [7] Below are lists of the different Fishing and Dealer Licenses issued in Scarborough in 1988: [8] These licenses have been included because they are a reflection of economic activities that are dependent upon Scarborough's Open Space and marine resources. In addition to generating Town revenue, they represent the livelihoods of many people. This connection between licenses and livelihoods underscores the further parallel between jobs and Scarborough's Open Space / marine resources.
Marine Fishing Licenses Shellfish Dealer Licenses ----------------------- ------------------------- Lobster / crab 89 Wholesale 15 Shellfish 29 Retail 20 Commercial Fishing 20 Lobster Meat 7 Scallop Boats 8 Shellfish Transport 1 Seaweed Harvest 1 Total 43 Scallop Non-commercial Divers 21 Worm Digging 2 Total 170
In 1994 Scarborough had 2,496 acres registered under the Tree Growth Tax Law. [9] Of these 59 parcels, approximately 35% (866 acres) represent Soft Woods, 52% (1,309 acres) Mixed Woods, and 13% (320 acres) Hard Woods. [10] This acreage accounts for 7.8% of the Town's total land area and 39.5% of its Open Space. This figure only accounts for officially recognized parcels. Other areas may harvest their timber but not take advantage of state tax laws - they are therefore not recognized here.
Registered Tree Growth areas must submit management plans signed off by licensed foresters. This means that the lands must be harvested as a resource periodically. If the above acreages were harvested annually, the lands would translate into an annual income of $37,500. [11] This figure does not include moneys spent locally for gas, harvesting equipment, seeds, etc.. Another consideration is that some Tree Growth areas permit snowmobiling, cross-country skiing, hunting, and other recreational uses on their land.
In 1994 there were 11 farmed tracts of land in Town totaling 1,534 acres registered under the state's Farm and Open Space code. [12] Like forestry, this figure only represents official farmland. There are more farms in Scarborough as farmers often lease out land or choose not to list their land under farmland tax codes. If one takes into account unregistered farm tracts, the above figure was 17 farms and 1,853 acres (according to the 1994 Comprehensive Plan). [13] These lands are used for a variety of purposes including beef, milkers, horses, hayland, cropland, and market / garden crops. [14]
Farm and forest industries are important economically as they create jobs and supply lucrative secondary markets such as food processing and lumber milling. [15] Common estimates place the multiplier effect of local agriculture at $3 to $5 (e.g., for every dollar received from farmers selling agricultural goods and services, $3 -$5 are earned in local businesses and processors serving farmers and their customers). [16]
Scarborough's beaches draw thousands of people, both residents and non-residents, to the area each year. In 1994, 1,489 seasonal passes were issued for local beaches (Ferry and Pine Point) and brought in $12,651 in revenue. [17] Combining this figure with Daily Parking fees brings annual beach revenues to $46,506. [18] Scarborough's largest beach - Scarborough Beach State Park - is one of the most popular beaches in the state and draws more people than the first two combined.
Hundreds of residents and non-residents make use of the marsh each year either for educational or recreational purposes. Canoeing, fishing, hunting, field trips, bird-watching, and kayaking are among some of its uses. Maine Audubon Society maintains a nature center on the marsh and offers guided tours and rents canoes. Stratton and Bluff Islands, National Audubon preserves, are popular places for bird-watchers with access to boats. Scarborough's coastline is also popular among boaters. In 1994, there were approximately 130 registered boats in the harbor with a waiting list of 29. [19] Scarborough's Excise Tax Office collected over $26,000 in Boat Excise Taxes and TAB Fees in 1994. [20]
The Town's coastline, beaches, and marsh area represent a defining and unique nature of Scarborough and they draw thousands of people each year to the area for a wide variety of pursuits.
Scarborough also has good cross-country, snowmobiling, mountain biking, horseback, hunting, and ATV terrain. Much of this area is located west of the Turnpike. In regards to hunting and fishing, the Town Clerk's Office issued 2,281 such permits in 1994. [21] This large number, in addition to the revenue it generates, points towards the popularity and need for this activity in Scarborough. Outdoor recreation is one of the fastest growing activities in the country today and demand for recreational services has been rising steadily over the past twenty years. Many Willingness-to-Pay studies have been undertaken over recent years in efforts to track how the public values this activity and how it can be valued economically. Using this survey approach, in 1991, the National Park Service determined the following values per person per day, [22]
Recreational Unit-Day Values
Activity Value
--------------------------------------
Swimming $24.02
Hiking & Horseback Riding $28.49
Non-motorized Boating $48.68
Cross-Country Skiing $16.76
Coldwater Fishing $30.72
Anadromous Fishing $51.52
Warmwater Fishing $29.25
Put in context of Scarborough, if residents fished a total of 1,000 days during the summer, then the annual estimated recreational value of the area would be $30,720, subject to some incremental annual increase over time, and for as long as the area remains optimal for fishing. This, obviously, is not revenue Scarborough sees due to this Open Space resource but it does translate into a tangible benefit for its residents. Related to fishing, a survey of expenditures associated with recreational use of the St. Croix River in Maine found that anglers spent six times as much per person, per day, as canoeists and over four times as much as general vacationers. [23] If Scarborough did not have this resource or damaged it, residents might be prone to look to other communities, make use of their resource, and spend their time and money in those communities.
The increasing popularity of the outdoors and of outdoor recreation creates value for communities that can offer this pursuit to its residents and tourists. If residents can stay in their own backyard (and not have to travel outside) due to their town's Open Space availability, this keeps money and jobs in that community. Fishing requires tackle and boat equipment, beaches need nearby stores to provide food and beverages, cross country skiing is helped by local sports outfitters, etc., etc.. Willingness-to-Pay studies and other surveys have been able to accord dollar values to these types of activities. As travel and tourism are becoming the country's leading employers, a poll commissioned by the President's Commission on American Outdoors found that natural beauty was the single most important criterion for tourists. [24] Tourism is highly labor-intensive and has significant impacts on local economies. Open Space, therefore, in addition to providing an enhanced "quality of life" should also be viewed as an important economic and community resource.
The majority of Scarborough's Open Space is its marsh (wetland). In addition to the economic benefit derived from it due to its tourism and recreational draw, these areas provide other economic benefits to communities. Wetlands provide many free "services" - flood plains, groundwater recharge, water purification, wildlife habitat, visual / cultural enhancement, and sediment and nutrient trap potential. When developed, not only are these lost, but significant costs may be incurred in the future due to flooding and erosion. Studies have been done that place monetary values on the aforementioned wetland functions. Using purchases made by public agencies for (wetland) properties having wildlife and Open Space characteristics, differences in cost between individual wells and municipal supply, and costs avoided by flood control measures, the following values were obtained. [25]
Annual Value Per Acre of Wetland
Type of Benefit Value Per Acre Based on Productivity
-------------------------------------------------------------
High Medium Low
Wildlife $70 $35 $10
Visual / Cultural $270 $135 $20
Water Supply $2,800 $1,400 $400
Flood Control $80 $40 $10
Totals $3,220 $1,610 $440
Other studies have placed similar values on wetlands - a 1981 report found an acre of wetland in the Charles River Basin to be worth $170,000 annually, the National Wildlife Federation in 1987 reported values for "bottomland forests and tidal estuaries" to average $30,000 / acre, and Ducks Unlimited set wetland values at $50,000 per acre. [26]
The majority of Scarborough's wetland areas are protected due to federal and state laws. The above studies point towards the economic benefits derived from this protection and can help communities view these (often regarded as "sub-optimal") areas differently. In regards to flooding, the 1993 midwestern floods cost federal, state, and local government hundreds of millions of dollars. Development on natural flood plains was the primary cause of this hardship. This could have been avoided with better planning and a perspective that weighed the flood plain benefits of wetlands. Scarborough's wetlands absorb a great deal of flooding every year due to coastal storms and hurricanes. If one were to value those wetlands vs. potential development on those wetlands (and the subsequent flooding damages incurred), wetlands would provide the maximum economic efficiency.
Preferential tax laws afforded to Open Space areas do take moneys off local tax rolls in the short term. This revenue loss is often cited by opponents of this preferential tax treatment. Upon further examination, however, Open Space does not translate into a net loss of property tax revenues in the long run.
Open Space areas, especially trails and greenways, increase the value of abutting properties. This increase translates into higher property tax revenues which can offset, or even be higher than, the tax rolls they replace. These new tax revenues can also be viewed in comparison to public acquisition costs of Open Space.
Consider the following example. If a property owner donates (to a land trust) 20 acres of Open Space that abut ten residential properties, that donated area either get taken off the tax rolls or is afforded a significantly reduced tax rate. In the short term, the town must compensate for this loss and spread the assessment loss over the community. However, as time goes on, the ten abutting properties increase in value due to the enhancement provided by the permanently protected neighboring Open Space. This increase in assessed value is often more rapid than the normal increases in other properties without similar Open Space.
Several studies have looked at this effect of Open Space on property tax rolls. They have concluded that Open Space, in the long run, can translate into a net increase in total property tax revenues. Below are some of the results of these studies.
• Studies out west in Rocky Mountain communities have revealed that properties near a trails sold for an average of six percent more than outlying properties. [27]
• A 1978 study of the impact of a greenbelt in Boulder, Colorado, found that housing prices went down an average of $4.20 for each foot of distance from the greenbelt up to 3,200 feet. In one neighborhood, the total property
value was approximately $5.4 million higher than if there had been no greenbelt, yielding an estimated $500,000 in additional annual property tax revenue. [28]
• A net increase of $3,391,000 in real estate value was directly attributable to Pennypack Park in Philadelphia. [29]
• In Dayton, Ohio, proximity to an arboretum added 5% to the average selling price of homes and proximity to the park and river added 7.35%. [30]
• In a research project conducted by the Center for Rural Massachusetts, it was found that homes in a cluster subdivision appreciated 12.7 percent faster over 21 years, compared with similar homes in subdivisions without open space. [31]
• An analysis of property surrounding four parks in Worcester, Massachusetts, showed a house located 20 feet from a park sold for $2,675 (1982 dollars) more than a similar house located 2,000 feet away. [32]
Another issue to consider is that real estate speculation values of the abutting properties also rise. Their selling price goes up as do the values of subdividible lots within them. Open Space considerations can also spur faster sales.
• A cluster development in Hunters Brook, New York, was designed to capitalize on the amounts of open space in the development. The homes were clustered on 30 acres, preserving 97 acres of natural sloping woods, including a dense pine forest. Care had been taken to retain local wildlife, thus adding to the rural setting. One of the developers commented, "It may not be the woods that bring (buyers) to us initially, but it seems to make all the difference when they see what it's like."
• A developer from Front Royal, Virginia donated a 50 foot wide, 7 mile easement for the Big Blue Trail after a non-profit approached him to provide a critical link along the perimeter of his subdivision. The developer realized the amenity value of the trail and advertised that the trail would cross approximately 50 parcels. All tracts were sold within four months. [33]
• In a 1970 study of a 760 square mile area in Maryland, noted planner Ian McHarg projected that uncontrolled development would yield $33.5 million in land sales and development profits by 1980. Profits resulting from development plans designed to accommodate the same population level, while preserving desirable open spaces, would exceed $40.5 million. The resulting additional $7 million translated into an increase in value of $2,300 per acre for the planned 3,000 acres of open space. [34]
Open Space can have a significant positive long-term impact on property tax revenues. This runs directly counter to the common argument that "development pays its way." In fact, development often does not pay its own way. Poorly or unplanned development usually has negative repercussions on a town's bottom line.
This section on Real Estate Valuation and Property Taxes addresses a fundamental economic relationship between development and Open Space. In fast-growing suburban towns like Scarborough, understanding the fiscal impact of this relationship can help offer solutions for strained budgets. Scarborough has begun to look at development and Open Space in a similar fashion and has been more proactively working with developers to set aside Open Space areas. However, the Town's approach has been piecemeal in nature as it has sought to set aside small scattered parcels of land here and there. Most of its efforts have been to ease recreational strains involving Open Space.
Scarborough's zoning laws inadequately address the economic potential that can be realized in Open Space and are, as the 1994 Comprehensive Plan noted, directly responsible for the Town's dispersed and costly rate of growth. The long term fiscal implication of Open Space and development are too often neglected in planning. The immediate lure of tax revenues frequently dominates thinking and supersedes discussion and thought on the long term costs of development. A recent study in Bowdoinham, Maine looked at this issue. At first glance, it appeared that a hypothetical 150-unit subdivision of $150,000 four-bedroom homes would be a revenue generator. However, after only accounting for additional solid waste disposal and education costs (it did not factor in increased fire, police, and road maintenance) it was found that the subdivision would cost the town roughly $2,000 per unit per year and cause a 3.3 mil increase for each taxpayer. In this individual case, it was concluded by a Selectman that, "Undeveloped land is the best tax break a town has."
As the above sections have looked at some of the more direct economic benefits of Open Space that are pertinent to Scarborough and its land area, there are several others that can be included. These are somewhat harder to quantify but they merit consideration. As this study has sought to emphasize economic benefits, these more-social oriented issues have not really been touched upon. Other Open Space benefits include:
This section has sought to quantify some of the economic benefits associated with Open Space. As stated previously, Open Space is often thought of in philosophical and / or emotional terms. When it comes to long term planning, it is far less frequently placed in an economic context. Open Space can, and should, be weighed on its economic (and social) merit. This section has tried to demonstrate some of the tangible economic benefits derived from it such as: wetland flooding control, tree growth harvest income, lobster landing revenues and associated lobster revenues, outdoor recreation willingness-to-pay surveys, hunting and fishing license fees, and property tax increases of properties abutting Open Space areas.
This perspective of Open Space is a relatively new one as towns and communities rarely used this approach thirty years ago. However, town growth and suburbanization, coincided with decreasing federal / state aid and citizen anti-property tax efforts, have severely strained town budgets and have hampered the ability of towns to think proactively in the long-term. In regards to Open Space, these developments often mean that towns are not able to see the long term benefits associated with Open Space. Open Space is a cost, especially in the short term, as it must be paid for either in the form of foregone property taxes, tax abatements, or acquisition expenditures. However, the long term economic and fiscal benefits often outweigh these short term costs. Open Space can, in many ways, contribute fiscally to a town's bottom line.
The table below provides a look at Scarborough's Open Space with this type of economic lens in mind. In many cases, certain numbers are impossible to accurately quantify. Others are extremely difficult. Therefore, this "back-of-the envelope" table should not be taken to be the most accurate reflection of the economic value of Scarborough's Open Space. It does, however, provide a start and can be used as a planning tool. It gives planners and citizen a different perspective on Open Space - one that is grounded in economics rather than social reasons. By viewing Open Space in the same fashion as Residential and Commercial / Industrial land-use categories, their merits and costs can be compared, debated, and discussed more empirically.
Approximate Annual Revenues Associated with
Scarborough's Open Space-Related Areas
Open Space-related Area Revenues
----------------------------------------------------------------------
Lobstering and Clamming $2,587,000
- (without spillover effect - restaurants, etc.)
Forestry $37,500
- (based on 2,500 acres of Tree Growth = 1 cord per acre
@ $13 per cord)
Agriculture Unknown
Beaches $47,000
Recreation (Boats and Town Clerk Office) $46,000
Recreation / Willingness-to-pay Studies
- Fishing (1,000 days @ $30.72) $31,000
- Swimming (10,000 days @ $24.02) $240,000
- Hiking and Horseback Riding (500 days @ $28.49) $14,000
- Non motorized Boating (500 days @ $48.68) $24,000
- Cross Country Skiing (250 days @ $16.76) $4,200
Wetlands (3,171 acres x various estimates ranges per acre)
- High estimate (@ $3,220 per acre) $10,210,620
- Medium Estimate (@ $1,610 per acre) $5,105,310
- Low Estimate (@ $440 per acre) $1,395,240
Real Estate $44,300
- Estimating a 5% increase in property value due to
Open Space abutment. $181,000 average house price.
20% of Scarborough land in Open Space. 5,822 houses -
Approximately 300 abut Open Space. Assessed value
of 300 = $2,715,000.
[1] Ibid, p.7-11 & 7-13.
[2] Ibid, p.7-13.
[3] Ibid.
[4] Ibid, p.7-9.
[5] Ibid, p.7-21.
[6] Ibid, p.8.
[7] Ibid, p.7-13.
[8] Ibid, p.7-12.
[9] Information from Scarborough Assessor's Department Records.
[10] Ibid.
[11] This assumes 1 cord per year, per acre at a 1994 market value of $13 per cord.
[12] Ibid.
[13] 1994 Scarborough Comprehensive Plan, p.9-15.
[14] Ibid.
[15] Is Farmland Protection a Community Investment? How To Do a Cost Of Community Services Study, American Farmland Trust, p.3.
[16] Ibid.
[17] 1994 Scarborough Annual Report, p.28.
[18] Ibid.
[19] Ibid, p.21.
[20] Ibid, p.5.
[21] 1994 Scarborough Annual Report, p.8.
[22] The Economic Benefits of Open Space, Stephen Miller, p.26.
[23] Ibid, p.34.
[24] Ibid, p.33.
[25] Ibid, p.29.
[26] Ibid, p.30.
[27] Protecting Rivers, Trails, and Greenways Reaps Economic Returns, Van smith, p.20.
[28] Ibid.
[29] The Values of Open Spaces, Elizabeth Brabec, p.2.
[30] Ibid.
[31] Ibid, p.5.
[32] Economic Impacts of Protecting Rivers, Trails, and Greenway Corridors, National Park Service - Rivers, Trails, and Conservation Assistance Program, p.2.
[33] Ibid.
[34] Ibid