NS Contract - Strategic Growth Rural Conservation Consultant Implementation Update Amendment

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STRATEGIC GROWTH AND RURAL CONSERVATION PROGRAM Droll (10.1.2007) An additional concern was whether the SGRC Program could succeed in protecting • the right land in the sending area. A substantial amount of land in Orange County has soil that is inappropriate for septic systems, making the land essentially undevelopable anyway. The developers expressed concern that the development rights for this marginal land would be offered at a lower price than land more worthy of permanent protection. In addition, the land most ih danger of development (i.e. closer to the municipalities) also costs more. The developers urged the creation of credit formulas that incentivize the preservation of land that truly deserves it, rather than marginal (cheap) land far from urban areas. In terms of the developers' willingness to pay for an additional unit of density in a games-#~ey~Praerell~agreed that~y would be willing to pay their per unit cost for raw land. For example, a particular parcel costs $15,000 per acre, and current zoning would allow it to be built at one unit per acre (one unit = $15,000). With SGRC conservation credits, they could build four units on that acre, meaning they would be willing to pay up to $15,000 for each of the three TDR credits they would need to buy (land = $15,000, three credits = $45,000; four units = $60,000). The resulting per unit cost to acquire the land and development rights would be the same as the no-SGRC (or "base") option. One developer acknowledged that there might need to be a discount factor in this equation, to account for the fact that he might have to build a smaller house (and thus have less profit) due to the smaller lot sizes. The developers acknowledged that this formula may not be feasible for a development with several different types of homes. In summary, the data analysis and discussions with developers indicated that a SGRC • Program is economically viable, and that there would likely be interest from developers in participating provided that appropriate formulas for credit allocation and reduced transactional costs are incorporated into the SGRC program and administrative design. 2.2.3 Conservation Areas (Points Allocation Formulas) Staff and Consultant Analyses. Planning Department staff and Consultants examined the second set of program design issues (see section 2.2.2 above for list of issues). Consultants conducted analyses using GIS (Geographic Information Systems) to evaluate the distribution of Conservation Area Points under different points awarding formulas, and the resulting possible impacts on average sales price of Conservation Area Points (CAPS). Consultants also conducted interviews and focus group sessions with developers to gain insight into the monetary value of Development Intensity Bonuses. Together with Staff and the County Attorney, recommendations were developed for each remaining program design issue with an eye towards: ^ simplicity and ease of understanding, ^ fitting within the legal framework outlined by the County Attorney, ^ reflecting County policy objectives for preservation and growth, and ^ balancing the monetary value of CAPs and Development Intensity Bonuses so they were in reasonable enough proximity to each other to allow a market to function. Working Group. A second SGRC Working Group meeting was held on October 1, 2007. Staff and Consultants presented initial recommendations on Conservation Area Points and Growth Area Development Intensity Bonus methodologies. . Orange County, North Carolina