Letter to the Editor

October 3,  2008
Letter to the Editor: Reaction to the HR&A report on Chappaqua Crossing
John Norton, PhD

The Chappaqua Crossing proposal would put a two-year supply of additional housing inventory into an already weakened real estate market. The effect could be an additional reduction in local home values on the order of 15-20%. That effect will take years to play out in a community of this size.

Letter to the Editor: Reaction to the HR&A report on Chappaqua Crossing
To the Editors:

Thank you for making available the HR&A report on Chappaqua Crossing. (See “Town advisors on Reader’s Digest development finish study,” NewCastleNOW.org, Sept. 26, 2008.)

I appreciate the fact that HR&A attempted to answer several important questions about the proposed Chappaqua Crossing development, particularly its implications for direct tax revenues and traffic.

I am disappointed in that there is one inclusion and one glaring omission from the study that together diminish its worth.

Specifically, I find it remarkable that the study investigated whether or not the proposed projects would make money for Summit Greenfield, but did not consider the impact of additional residential construction on the value of existing residences in the town, and the indirect tax implications of that impact. As a result, the “fiscal impact” section of the report is seriously misstated.

How much money the developer earns on a given use of the property is not only non-determinative, it is irrelevant. Moreover, without access to the firm’s records, this section of the report is highly conjectural. In short, it isn’t worth much, and probably shouldn’t have been part of the study.

But what would have been worth a lot is an estimate of the impact on home values, and the resulting impact on property tax revenues, in the community. We have before us a proposal that will materially diminish the value of the largest financial asset most residents of Chappaqua have, the equity in their homes. There is a lot at stake too for one of the most important entities in Chappaqua, its schools. Reduce the value of every piece of residential property in Chappaqua by about 15-20% for five years, and see what effect it will have on tax revenues.

At an economic conference in Manhattan on September 17, JPMorgan-Chase Chief Economist Lewis Alexander estimated that U.S. home prices have fallen 15% in the past two years, and predicted that they will fall about 6% further in the next six months. After that decline, he thought they would remain relatively flat, here I refer to my own notes, “for years.”  While Chappaqua may not reflect that trend exactly, I think it is safe to say that the current housing market here is far from robust. 

The Chappaqua Crossing proposal would put a two-year supply of additional housing inventory into an already weakened real estate market. The effect could be an additional reduction in local home values on the order of 15-20%. That effect will take years to play out in a community of this size. 

HR&A’s only comment about housing prices related to the developer’s ability to sell homes at projected prices. “In addition, HR&A has significant concerns about the residential pricing for the developer’s proposal. The preliminary tax revenue projections assume that the developer achieves the residential pricing targets. If the developer does not achieve the pricing targets, estimated tax revenues will decrease at a rate commensurate with the gap between the residential pricing targets and the residential prices attained.” (HR&A report, p. 11, para 1.)

My own opinion prior to reading the HR&A report was that while the Chappaqua Crossing proposal might be good business for Summit Greenfield, it is clearly bad for our community.  I see nothing in the HR&A report on the original proposal to change that opinion. 

As to the other scenarios they propose, since I am not as familiar with them as I am with the original proposal, I have formed no opinion on them as yet. Some seem at least to offer some promise, perhaps not of a net benefit, but at least of mitigated harm to the people who live here now.

The town board has been more than accommodating to Summit Greenfield, deliberating for far more time than warranted the merits of a bad proposal. It is time for them to just say no.

The developers don’t and won’t live here. We do and we will. They won’t put up with the mess they will create. We will. They do stand to profit from their investments and their lobbying efforts, but the community and its residents do not. I have lived in cities in which developers had their way, with no more or less regard for the impact of their projects on the community than these developers have shown. What happened in those cities was appalling. I am hopeful that we won’t permit a similar outcome here. 

John Norton, PhD