In development, there are two sides of the coin

By Katie Stallcup

Published: April 12, 2008

Development: you can’t live with it, you can’t live without it.

At least, a city can’t.

Commercial and residential growth is the sign of a healthy city, economic development officials say. But sometimes it has unintended effects.

The flourishing Plains

Industry has bloomed on the Plains in recent years. The cities of Auburn and Opelika have worked hard to recruit new businesses and have been rewarded.

In just the past two years, 29 new industries have moved to Lee County, creating 1,539 new jobs and investing nearly $263.5 million.

The new money and jobs keep Auburn citizens’ tax burden more bearable, Auburn Economic Development Director Philip Dunlap said. For example, since 1984, the property tax only grew from 48 to 54 mills in 2008.

“How were we able to keep the tax burden on citizens so reasonable? We diversified the economy,” Dunlap said. “By diversifying the economy and bringing in a major source of new payrolls… it created an economic impact and generated revenue, and that provides municipal services to all our citizens.”

Sales tax revenues show the impact, too. Auburn sales tax revenues have steadily grown since the late 1990s. Audited sales tax income grew from roughly $13 million in 2002 to nearly $21.8 million in 2007.

Opelika’s growth is even more evident. From 2002 to 2007, the city’s sales tax almost doubled, from approximately $8.3 million to $16.1 million.

New industries and jobs have “a tremendous impact, especially with the vagaries of the economy,” Economic Development Director Al Cook said.

Cook said his department has learned to balance its efforts and hedge its bets.

“You have to continue to work with existing industries to assist them in expanding but at the same time, recruit new businesses to make sure the local economy is viable and vibrant and growing,” he said. “Because you never know when something’s going to happen to a segment of your industrial base, such as textiles, and it goes away.”

Even with layoffs and closings, the unemployment rate in Opelika has dropped since the turn of the century, Cook said.

Like Auburn, Opelika grants some companies tax exemptions to entice new businesses to locate within city limits, an incentive
allowed by state law.

“(The benefits are) increased payrolls, and schools will get their portion of ad valorum taxes,” he said. “You’re not giving away something if you never had it.”
Tax revenues across the board are up, Cook said.

“That’s a sign of a healthy economy,” he said. “If you look at some pockets of the (national) economy, they’re not doing that well, and they’re struggling. We’re fortunate here.”

Growing pains

But you can’t get something for nothing. New businesses bringing new residents have an impact on their surroundings.

For example, the growth provided by new research and technology parks in the area provide jobs and a thriving economy, but they also mean more work, Director of Auburn University’s Economic and Community Development Institute Joe Sumners said.

While Sumners praises the cities’ efforts in recruiting and the drawing power of Interstate 85, infrastructure has to support that growth, he said.

“You need more roads, sewer systems, water systems, all things needed for growth,” Sumners said. “There’s positive and negative, but overall tremendous positive impact for growth.”

Concrete landscapes can also cause environmental problems, said Alabama Department of Environmental Management spokesman Scott Hughes.

Normally, rainwater would be filtered through the soil and ground into groundwater supplies, thus replenishing groundwater sources, he said.

“But with development comes more impervious material, such as driveways and rooftops,” Hughes said. “That, in turn, causes more storm water to run off from a developed area, which can erode stream banks and cause sediments and soils and pollutants to be deposited into local waterways.”

Developers can build to every state and local code but still have that effect on the environment, he said.

There are steps one can take when developing to reduce that effect, such as using permeable building materials and leaving more green or open spaces, Hughes said.

Development can have a myriad of effects on an area, from increasing use of resources like water and natural gas to impacting natural habitat, said Dr. Lindy Biggs, director of the Auburn University Sustainability Initiative.

“Every time you have development and cutting down trees, you remove habitat for birds and other animals,” Biggs said. “Even if you leave a cluster of undisturbed land but it’s right next to a building site, you really disturb wildlife.”

Even in her own neighborhood, Biggs noticed much smaller flocks of birds after a nearby area was cleared of trees.

On the other hand, some residential developers take the surrounding habitat into consideration, she said.

“A lot of real estate advertisements are promoting the fact developments have a lot of nature around them, so that’s really nice,” she said.

A balancing act

Development can have wide-reaching and lasting effects, Biggs said.

“In sustainability, we like to look at systems, so we look at connections between things,” she said. “Every time you do anything, it has an impact. Sometimes it’s good or bad or neutral, but other things are affected.”

People might voice opposition to development, but there are benefits, too, Auburn’s Dunlap said.

“If you step back and look at it, when people say they don’t like growth, but they do like schools and paved streets and tennis complexes and Little League parks and new libraries - they like those things,” he said.

Sustainability takes a broad look at an event’s impact, Biggs said.

“So, if you have a housing development or commercial development, what’s it doing to the economics, environment and social justice?” she said. “Who’s benefiting and who’s being harmed by development? There’s always both.”