docEconomic Profile and Market Trend Analysis
IntroductionThis chapter provides an assessment of changing economic conditions within the Clarke County region that have the potential to influence reuse alternatives for the Navy Supply Corp School (NSCS) facility. The primary study area examined is Clarke County; however, consideration and comparison is also given to the adjoining counties in the region, as well as the State of Georgia.
The analysis presented in this chapter is generally organized into four main components. The first provides a summary of major findings and conclusions that have been gleaned from all the data examined. The second is an overview of some key demographic characteristics of the region that present recent and historical trends related to population and household growth, migration patterns, and income levels. The third segment of the analysis reviews changes in the residential and commercial real estate markets over the last decade. Within the residential market conditions related to such factors as construction rates, changes in sales volume and pricing levels were evaluated. In the commercial real estate market, particular focus was given to the office, medical, and retail segments with regard to building absorption levels as well as sale prices and lease rates. The fourth section of the chapter presents a detailed assessment of the area’s economic base as it relates to employment and industry trends, wage rates, and labor force characteristics.
The chapter concludes with a section on reuse implications that presents a number of factors, based on economic and market conditions, that could be used to evaluate potential alternative scenarios for reuse or redevelopment of the Navy School property.
Summary of Major Findings and Conclusions Clarke County’s current (2005) population is estimated to range between 104,000 and 109,000. Population growth in the county occurred at a steady pace between 1980 and 2000 when over 26,000 residents were added. However, more accelerated growth rates were observed in surrounding counties within the region during this period. In particular, Jackson and Oconee Counties experienced some of the highest growth rates in the region, a trend that is largely attributable to their proximity between the Athens and Atlanta metro areas. Regional growth rates are projected to slow somewhat during the current decade (2000-10) in comparison to historical rates. However, areas within the region outside of Clarke County are expected to continue growing at a faster rate than the county through 2015. In fact, Jackson County’s rate of growth is expected to increase by approximately 18,200 residents during this decade, which will exceed the projected increase for Clarke County (14,000). The age structure of Clarke County’s population is dominated by the 18-24 age group due to the presence of students at the University of Georgia. This age group accounted for almost 50% (6,414) of total population growth between 1990 and 2000. Other age groups with larger population increases included 45-54 (3,158) and 25-34 (1,752). Relatively little growth was observed in the school age cohorts under the age of 17 (an increase of only 550), which when compared to other characteristics of the population, suggest that the county is not attracting or retaining younger households that are in the formative family stages. Population migration data for the last several years suggests that Clarke County is experiencing a net loss of population to other counties in Georgia. This data also indicates that residents moving into the county tend to have lower incomes than those moving out of the county. The median household income levels in Clarke County tend to be lower than those in other portions of the region, as well as the state as a whole. In 2000, the county’s median household income was $28,400, which was only 67% of the statewide median. However, the disparity in household income levels between the county and other areas was greater for younger households under the age of 45 suggesting that the presence of college student households is being reflected in overall income levels for the county. Incomes levels of older households illustrated more parity with the region and the state. Another factor contributing to lower household incomes in the county are average wage rates that tend to be lower than the state’s. In 2005, the average wage for the county was $33,523, which was only 85% of the statewide average. The amount of housing construction in Clarke County over the previous decade was substantial with approximately 6,155 units built between 1990 and 2000. As of 2000, the county had a total of approximately 42,120 housing units. However, the rate of growth in the county (17%) during that time lagged behind regional housing construction rates that ranged between 25% and 45% in adjoining counties. As of 2000, the county had approximately 39,700 occupied housing units. Of that total, over 23,000 (58%) were renter-occupied with the remaining 42% being owner-occupied. The demand for rental housing at that time exceeded the number of available multi-family units, which indicates that a significant number of single-family homes and condominiums were being used to fill the gap for rental housing. Since 2000, Clarke County has issued building permits for an additional 8,190 housing units, or 1,260 annually, through mid-2006. This annual rate of increase is more than double the number of units (616) constructed each year during the previous decade. However, permits issued through June 2006, suggest that construction rates may be down between 20%-30% from previous years. The largest amount of units permitted were single-family homes with 4,334 added since 2000, although apartments and condominiums also saw significant increases of 1,664 and 1,860 units, respectively. The rate of housing construction since 2000 indicates that the market reacted vigorously to pent-up demand that emerged over the previous decade. A large percentage of that demand was created by UGA students requiring off-campus housing since only approximately 7,300 of the University’s 32,000 enrollees are housed on campus. The strong growth in single-family and condominium housing since 2000 suggests that these units are still supporting the rental housing market. A review of tax digest ownership records for these types of dwellings (non-apartment units) revealed that approximately 15% were owned by entities residing outside the county. This suggests that some units are being purchased for investment and/or revenue generating purposes, as opposed to personal occupancy. Residential home sales and housing prices have risen steadily over the past decade. The average number of home sales more than doubled, from 1,125 to 2,457, between 1995 and 2004. However, as of 2005, sales had declined to 1,200, a fact that is representative of the general softening of the real estate market that is evident in many parts of the country. As of 2005, the average sale price for a single-family home was $180,200, an increase of over $84,000, or 88% since 1995. Condominium prices increased at a faster rate of 114% during that time with a 2005 average sale price of $137,000. In fact, the average sale price for newer condominiums (built since 2000) was $185,800 in 2005 while new single-family homes had an average sale price of $187,150. This indicates that condominiums have become an increasingly popular alternative for homeownership and the construction value for these units has also escalated significantly Based on data in the County Assessor’s records, Clarke County has approximately 25.6 million square feet of non-residential buildings, excluding governmental and other tax-exempt properties. Of that total, approximately 5.8 million square feet (23%) is devoted to retail uses with 3.6 million square feet (14%) used for office space. Within the office category, approximately 871,000 sq. ft. is classified as medical office with the remaining 2.7 million square feet used as professional and general office space. Between 2000 and 2005, approximately 217,800 sq. ft. of medical office space was absorbed within Clarke County, about 25% of the total inventory. For general office space, approximately 360,000 sq. ft. was absorbed during that time, or 13% of the existing inventory. Annually, 36,000 sq. ft. of medical space and 60,000 sq. ft. of general office space has been absorbed in Clarke County since 2000. Office buildings in Clarke County tend to be oriented toward smaller users with average square footage of approximately 5,200 sq. ft. per office unit. These offices are often configured as attached condominium units or as multi-tenant buildings in executive office parks. However, some new Class A office buildings capable of supporting large, single users, are being constructed in Oconee County (at Route 316 and Daniels Bridge Road), and on Epps Bridge Road in Clarke County, containing 35,000 sq. ft. to 70,000 sq. ft. per building. Medical office space sold within the average sale price range of $93-$188 sq. ft. between 2000 and 2005 with the high end reaching $200-$225 sq. ft. General office space had an average sale price ranging between $91-$130 sq. ft. with newer space in the $100-$140 sq. ft. range. Lease rates for office space in the market generally ranged between $15-$20 sq. ft. with higher values being achieved at sites in the downtown, as well as in new construction on Epps Bridge Road and in Oconee County. Although absorption data for office space does not indicate a slowdown in the market as of 2005, there is some indication from local developers that levels may have reached a temporary saturation point given all the space under construction or new to the market. It is very possible, and there is already anecdotal evidence to support the contention, that some existing office tenants in Clarke County may relocate from their current facilities to this newer and higher quality product. This may result in a larger inventory of vacant, older office space that could contribute to a lowering of lease rates for such properties, at least in the short-term. Retail absorption over the last five years has averaged 117,355 sq. ft. annually with a total of 704,000 sq. ft. constructed since 2000. However, this rate has decreased somewhat from the previous decade of the 1990s when 129,000 sq. ft. was absorbed annually. The higher end of lease rates for retail space tends to range between $13-$18 sq. ft. Commercial and industrial land sales between 2000 and 2005 averaged about 30 per year. The highest values were found in the downtown area with an average of $790,000 per acre; however, this value is based on only seven fair market sales. In the area around the Navy School property, average values ranged between $105,000 and $435,000 per acre depending on location and zoning. Retail land sales achieved their highest levels on the Atlanta Highway with an average value of $250,000-$450,000 per acre. Total employment in Clarke County increased by approximately 13,480 between 1990 and 2000, a 21% rate of increase. In comparison, employment in the Athens Metropolitan Statistical Area (MSA) increased by 28% while overall employment within the state grew by over 33% during that time. From an employment perspective, the four largest sectors of the county’s economy in 2000 were Services (20,663 jobs), Government (18,716 jobs), Retail Trade (14,349 jobs), and Manufacturing (10,273 jobs). Total manufacturing jobs shrank by 4.6% during the decade, which was in contrast to the 5% statewide growth experienced in this sector. The other growth sector for the state that was not reflected in the local economy was Wholesale Trade where statewide employment increased by 20.3% while Clarke County’s sector declined by 13%. As of 2005, Clarke County had an employment base of 63,330 jobs, 44,550 of which were private sector, and 18,780 were in the public sector. The fact that approximately 30% of the total employment base is comprised of public sector jobs indicates that the area is less susceptible to broader economic fluctuations. Chemical manufacturing was the only Manufacturing subsector that grew during this time with the addition of 288 jobs representing almost a 39% increase. Several pharmaceutical and related product manufacturers in the county form the basis of the bio-pharmaceutical industry cluster that is anticipated to be a strong growth area in the future. This sector has been slow to expand in the Clarke County region and it is anticipated that workforce training is likely to be a critical factor in the future success of the area’s biotechnology sector. Clarke County experienced a net increase of 2,180 jobs within its economy between 2001 and 2005, an increase of 3.6%. This was more than double the statewide increase of 1.7% during this period. This net increase is a reflection of 3,577 jobs added in the Service Producing sectors, which were offset by a loss of 1,396 jobs in the Goods Producing sectors such as Manufacturing. A further examination of the job growth within the county reveals that only 535 of the net increase over the last five years occurred in private sector establishments with the remaining 1,647 jobs, or 75% of the total net increase, being added to the state and local government sectors of the economy. In fact, the largest single increase occurred within the state government sector where an estimated 1,450 jobs were added during this period. The majority of this increase is likely attributable to growth at the University of Georgia, which is the largest state-operated entity in the county. The two largest growth sectors within the county were the Health Care and Social Assistance sector and the Accommodation and Food Services sector. Health Care added over 1,300 jobs, a 17.5% increase, while the latter sector expanded by approximately 1,110 jobs for a growth rate of 20.7%. These two sectors also added 46 and 50 new establishments respectively, over the last five years. In the Health Care sector, approximately 300 jobs of the 1,300 total were in the public sector with the remaining 1,000 jobs representing private sector growth. The Trade sectors had mixed results over the last five years with minor growth in the Wholesale sector of 3.1% but significant declines in the Retail sector, which eliminated over 770 jobs, a 9.5% rate of loss. This reduction in retail jobs is a trend that has occurred throughout the state although sales have continued to remain healthy. It should also be noted that, based on the commercial absorption rates, Clarke County has continued to add a significant amount of retail building space over the last five years. The combination of these two opposing statistics is indicative of the trend toward creation of larger retail establishments that are serviced with reduced staffing levels. Industry projections for the Northeast region of the state through 2012 indicate that Clarke County’s recent employment base trends are in line with anticipated growth rates. This is particularly evident in subsectors related to educational services, food/drinking services, ambulatory health care, hospitals, administrative support services, social assistance, and state government. Where Clarke County has not reflected growth projections for the larger region is in the manufacturing sectors related to paper and fabricated metals, as well as in some of the construction trade sectors. The county’s labor force added approximately 13,300 workers between 1995 and 2000, an increase of 29%. In comparison, the state’s labor force increased by only 17.5% during that time while the MSA grew at a slightly faster rate of 31.6%.Athens-Clarke County (ACC) is a separate governmental entity within Clarke County. It represents the area operated under the auspices of the unified government of the City of Athens and Clarke County that was established in 1990. Clarke County also includes the incorporated places of Winterville and Bogart (only a portion of which is in Clarke County) that have a combined population of approximately 2,000. Although the NSCS facility is located in the ACC portion of Clarke County, the demographic and economic analysis presented in this section of the report represents data for the whole of Clarke County.
Clarke County is part of a broader metropolitan region that has experienced significant growth over the last two decades, as well as some dynamic overall changes in population distribution. Part of this dynamic is reflected by the reconfiguration of metropolitan area boundaries by the Office of Management and Budget (OMB), the federal agency responsible for defining the country’s metropolitan areas, that occurred during this period. In 1990, the Athens Metropolitan Statistical Area (MSA) was comprised of four counties including Clarke, Madison, Oconee, and Jackson. Athens is identified as the central city within the MSA. During the 1990s, Jackson County was separated from the MSA by the OMB, presumably due to changes in population levels and commuting patterns of that county’s residents, leaving the three remaining counties as the newly defined MSA. As of 2003, the boundaries of the MSA were once again revised by adding Oglethorpe County, along with a name change to Athens-Clarke County MSA, suggesting an increased economic affiliation has occurred between this fourth county and other portions of the MSA. Figure III-1 illustrates the general locational context of the NSCS property and Clarke County within the region.
Figure III-1
Historical population trends over the last two decades were examined for the Clarke County region and the State of Georgia. As illustrated in Table III-1, the county’s total population grew by approximately 12,570 between 1980 and 1990 representing an increase of 16.8% and an average annual growth rate of 1.6%. Although Clarke County experienced the largest actual gain in total population, most of the other counties in the region (with the exception of Oglethorpe), as well as the state, had higher rates of growth during this time period. Oconee County’s growth rate far exceeded the others at 41.8% during that decade (adding approximately 5,200 residents), followed by Madison, Jackson, and the State of Georgia, which all had growth rates between 18% and 19%.
Table III-1
Total Population 1980 – 2005
Clarke County Region and the State of Georgia
Between 1990 and 2000, Clarke County’s growth was relatively stable in comparison to the previous decade. The rate of growth decreased somewhat from 16.8% to 15.9% but total population added was approximately 1,320 more (12,574 vs. 13,895) than during the 1990s. Despite this continued increase in population growth, Clarke County’s rate of growth during the 1990s lagged well behind the rest of the region, as well as the state, as shown in the table. Growth rates increased between 4% (Madison County) and 20% (Jackson County) while the state experienced an approximate 8% increase from the previous decade. In fact, Jackson County added over 11,500 residents during this time period, which is on par with Clarke’s total increase although Jackson County has less than half the population.
The greater disbursement of regional population growth noted above during the last decade may be attributable to several factors. One is that while Clarke County still remains the primary employment center for the region, more people are seeking homes outside Clarke County and are willing to commute greater distances for their jobs. A second possible reason is that more employment opportunities have emerged over the last two decades in other portions of the region, outside of the Athens area, which has attracted more population to these other locations. Finally, growth in areas such as Jackson County and Oconee County has likely been influenced by the economic expansion of the Atlanta metropolitan area, which lies within commuting distance of these counties.
Table III-2
Group Quarters Population – 2000
Clarke County
It should be noted that a portion of Clarke County’s total population is enumerated in the special category of individuals residing in group quarters. This population is further segregated by those who are institutionalized in places such as correction institutions, and those residing in other group quarters such as college dormitories or military quarters, such as the Navy School. As Table III-2 illustrates, the county’s largest portion of group quarters population in 2000 was housed in college dormitories (approximately 6,600 residents) such as those affiliated with the University of Georgia (UGA). This population however, represents only a portion of UGA’s total student enrollment, which in 2000, was approximately 31,000 (undergraduate, graduate and professional). This data indicates that an approximation of Clarke County’s permanent, year-round residential population as of 2000 was in the range of 60,000 – 70,000.
Population estimates for 2005 in Table III-1 suggest a general slowing or stabilizing of the overall growth rates for the region and the state has occurred over the last five years, with the exception of Jackson County where the rate of growth has increased in comparison to the previous decade. Two population estimates are presented in the table for Clarke County. The first, and the higher estimate, was prepared by the ACC Planning Department as part of the county’s most recent comprehensive plan update<span class="Footnote-0020Reference--Char"><sup>1. The second estimate presented in the table for Clarke County, as well as the other counties and the state, was developed by the U.S. Census Bureau. The ACC estimate suggests an average annual growth of 1.5% over the last five years, which is commensurate with growth rates for the last two decades. In comparison, the Census estimate indicates that the rate of growth has been less than half that with an annual average of 0.6%. Although no detailed growth estimates were undertaken as part of this analysis, an examination of building permit data for the last five years, which is presented in a subsequent section, suggests that the higher growth rate is a more likely scenario. In fact, it is possible, based on the number of building permits issued, that the population in 2005 is even higher than the ACC estimate noted here. However, it is difficult to gauge exactly how much the demand for housing, as reflected in building permits issued, is being influenced by students at UGA and does not represent population growth of permanent, year-round residents.
Table III-3
Population Projections 2000 – 2015
Clarke County Region and the State of Georgia
Finally, Table III-3 presents regional and state population projections through 2015. These projections were developed by the state’s Office of Planning and Budget (OPB) with an alternative scenario for Clarke County prepared by the ACC Planning Department. The OPB projections suggest that Clarke County’s population will exceed 110,600 by 2010, representing a 9% growth rate for the decade with an average annual rate of just under one percent (0.9%). In comparison, the Planning Department’s projections place the county’s 2010 population at approximately 114,300, a 12.7% increase with an average annual increase of 1.2%, a rate only slightly slower than the previous decade’s 1.5% annual growth rate. All other growth rates in the region are expected to have decreased, in comparison to 1990s growth, by the end of this decade, with the exception of Jackson County where growth rates are projected to increase by approximately 5% (38.6% to 43.7%). In fact, Jackson County’s projected increase in population of 18,192 between 2000 and 2010 will exceed Clarke County’s total population increase of 12,857 (based on the ACC projection) for the first time throughout the 30-year period of analysis examined here.
For the remaining five years of the projection period, 2010 through 2015, both the OPB and ACC projections anticipate a slowing in the average annual growth rate to approximately 0.5% for Clarke County. This decline in the growth rate during that time period is expected to be consistent for all counties in the region as well as the state.
Age of the PopulationThe age structure of Clarke County’s population reflects some interesting characteristics. Due to the presence of the university, the overall age structure of the county’s population is skewed toward the younger cohorts. This is illustrated by the graph in Figure III-2 that highlights the large segment of the population in the 18-24 age group that generally encompasses both undergraduate and graduate level students. In addition, the relatively low median age of 25.4 for the county in 2000 (which remained virtually unchanged from 1990), as compared to 33.4 for the state as a whole, is another factor that attests to the influence of the university on the overall age structure in Clarke County.
Table III-4
Population by Age 1990 and 2000
Clarke County
The published census data does not allow for the determination as to exactly how much of the population may be affiliated with the university versus how many may be non-college students within the overall population. However, the census did record that approximately 29,700 residents of Clarke County were enrolled in college as of 2000, 24,700 undergraduate and 5,000 graduate and professional degree students. This represents approximately 30% of the county’s total population of school age persons (age 3 and above). In comparison, only 5% of the state’s total population was enrolled in college at that time while the remaining counties in the region had enrollment levels averaging 3%. Furthermore, as the data in Table III-4 illustrates, there was insufficient population in the 5-17 age group in 1990 to support the total population in the 18-24 age group, as well as the large increase that occurred between 1990 and 2000, through natural age progression. This data suggests that a large percentage of Clarke County’s population age 18-24 is affiliated with the university. From another perspective, growth in the college-age cohort of 18-24 accounted for 46% of the total population increase between 1990 and 2000, which was equivalent to the combined increase in the three age groups between 35 and 64. An approximation would place the non-university population in this age group between 5,000 and 6,000 residents, which would resemble a more typical population distribution found in counties without post-secondary institutions such as UGA.
Figure III-2<span class="Report-00201st-0020indent-0020body-0020text--Char">Another trend suggested by the lack of increase in children under the age of 5 indicates the county is not attracting, and/or retaining, younger households that are in the formative periods for establishing families, which is normally reflected in the 25-34 age group. Although the 25-34 age group in Clarke County comprised the second largest percentage of the total population (16.3%) in 2000, the presence of these younger households is not reflected by the addition of younger children in the population base. Generally, it appears younger households may reside in the county for some period of years but eventually relocate to another area, either before establishing a family or soon thereafter. The implication is that students who have completed their term at the university, as well as others in the general populace under the age of 24, may create a residual population increase in the 25-34 age group but they are not enticed to remain in the community over the long-term and eventually decide to relocate. One variation to this observation is the fairly significant increase in population in the 45-54 age group that added over 3,150 people over the previous decade. This increase may represent a greater number of existing residents from the 35-44 age group who have decided to remain in the county but it may also represent middle-age households that have been attracted to the area for employment reasons, some of which are likely related to UGA.
Finally, Clarke County, like much of the country, experienced an increase in the percentage of population in the seniors cohorts of ages 65 and over which grew by 8.6% over the last decade. This growth appears to be primarily supported by people living longer lives as opposed to the natural progression of the population from the preceding age group. Based on the trends observed in this data it does not appear that the county’s senior population will increase significantly over the current decade (2000-2010) unless altered by a change in migration patterns.
Migration TrendsOther data that seems to support the pattern of population movement noted above is migration data collected by the U.S. Internal Revenue Service (IRS). Based on addresses supplied on tax returns, the IRS is able to correlate changes in place of residence on an annual basis that provides a general pattern of migration from year to year. This data is not a 100% sample of the population since some households are exempt from filing tax returns while others may be missed due to data errors related to mismatched addresses. In addition, population recorded by the IRS data as “migrants” is based on the number of dependents listed on individual tax returns and can result in variations in census population totals for a number of reasons. However, this data does provide a useful perspective on localized migration patterns that is not available elsewhere.
Table III-5
Net Population Migration for Clarke County
2000 - 2004Table III-5 summarizes relatively recent net migration patterns for Clarke County between 2000 and 2004. What this data illustrates is the exchange of population between the county and other locations listed in the table. The numbers in parenthesis indicate that Clarke County experienced a net loss of population to those locations in a given year. For example, in the 2000-01 tax year, 101 more residents moved out of Clarke County and into Barrow County than the number that moved out of Barrow County and into Clarke County. Overall, the data presented for this four-year time period indicates that population growth in Clarke County due to migration has been relatively low, as shown in the first two years, to a negative outflow in years three and four. The larger out-migration flows from Clarke County have been toward Barrow, Fulton, Gwinnett, and Oconee Counties. The primary locations from which population migration has been positive for Clarke County are from other regions of the state, as well as other U.S. and foreign locations. In fact, if foreign migrants are excluded the data suggests that the county has had a net loss of population due to migration during this time period. A similar pattern of negative net migration was observed for the 1990s that was reported in an economic analysis prepared for the county by Market Street Services, Inc</span><span class="Footnote-0020Reference--Char"><sup>2. While the change in population recorded by the census between 1990 and 2000 does not indicate a net loss in total population, the IRS data suggests that there is a significant “turnover” in the population and that this is contributing to the lack of new families being established, a trend that may also have implications within the county’s labor force.
Table III-6
Total Households 1990 and 2000
Clarke County Region and the State of Georgia
Between 1990 and 2000, Clarke County added approximately 6,540 households, according to the Census Bureau, an increase of 19.7%. The number of households added during this time period occurred at a more rapid pace than the rate of population increase of 15.9%, which is reflective of the trend of decreasing household size, as illustrated in Table III-6. This scenario occurred throughout most of region and the state as a whole with the exception of Oconee County, where household size increased slightly over the previous decade. This suggests that Oconee County is attracting or retaining larger families, which may reflect some of the out-migration of younger households from Clarke County, as noted in the previous section. Similarly, Jackson County had a relatively small decrease in average household size over the last decade suggesting a similar occurrence in this area but not to the extent observed in Oconee.
Table III-6 also illustrates the change in age of householders in Clarke County over the previous decade. The largest percentage gain was recorded in householders between the ages of 45 and 54, which increased by almost 50% (1,911 households). The second largest increase was in the 15-24 age group that added over 2,700 households representing a 38.2% increase. The increase in households in both of these age cohorts is generally reflective of the growth trends discussed for the population as a whole in the previous section of this report.
The change in household income for the Clarke County region and the State of Georgia is presented in Table III-7. As shown, Clarke County’s median household income increased from approximately $20,800 in 1990 to $28,400 in 2000, a gain of almost $7,600. This increase represents a growth rate of 36.5% before inflation, well below the growth rates experienced in the rest of the region that ranged between 44% and 60% during that time period. Clarke County’s growth rate also lagged almost 10% behind the statewide increase of 46.2% for that period.
In addition to growing at a slower rate, Clarke County’s household income level was generally lower overall in 2000 when compared to other counties in the region. Clarke County’s median household income was equivalent to approximately 67% of the state’s median in 2000. In comparison, the next highest percentages were found in Oglethorpe and Madison Counties where the medians were in the vicinity of 84%-86% of the state level, percentages almost 20% higher than Clarke County’s. Oconee County has the highest household income in the region with a 2000 median of $55,211, 30% higher than the statewide median, with Jackson County’s median being the second highest and just slightly under (95%) the state. Oconee and Jackson Counties also experienced the largest growth in median income over the last decade with growth rates of 59.7% and 58.7%, respectively.
Table III-7
Median Household Income 1990 and 2000
Clarke County Region and the State of Georgia
The bottom portion of Table III-7 provides more detail regarding median household income levels in 2000 based on the age of the householder, which are also presented as a percentage of the statewide median. This data illustrates that Clarke County’s median income levels tend to be lower than the region and the state in the younger and middle-aged households, but this characteristic begins to reverse itself in the older age brackets of 45 and above. The median income in the 25 and under age group is especially low, equivalent to only 49% of the state’s median. This is assumed to be largely a factor of the college students who are being enumerated as part of the total population as evidenced by the population characteristics discussed in the preceding section. In comparison, all other counties in the region exceed the statewide median in this age group. Although still below the statewide median, Clarke County’s household income begins to achieve some level of parity with other counties in the region in the 45-54 age group where its median represents 82% of the state’s. This is the same age group that experienced a surprisingly large increase in population growth between 1990 and 2000, as noted previously. In the remaining age groups of 55 and older, Clarke County’s household income exceeds the statewide median while other portions of the region, with the exception of Oconee County, drop below the state level. This data indicates that these older age brackets represent an important part of the available wealth base within the county although they represent only approximately 37% of total households as compared to 63% under the age of 45 (percentages not shown in table).
One final income characteristic of the region’s households examined was the determination of poverty level. Poverty level is only one measure of potential economic need but it does highlight those households that may have the greatest need for economic assistance. Table III-8 presents an assessment of households, by household type and age of householder, that were determined to be below the poverty level in 2000 by the Census Bureau. As the data shows, approximately 27% of Clarke County’s households for whom poverty status was determined were living below the poverty level. This was approximately twice the level of households below the poverty threshold in the adjoining counties and the state as a whole. Further examination of this data, based on household type and age, reveals some important distinctions within these total percentages. For example, the percentage of family households below poverty in Clarke County was 7.4% which is generally equivalent to the state’s and the region’s percentages in this category. However, in the “other family” category representing households headed by a single person with no spouse present, Clarke County is shown to have 5.5% below the poverty level which is consistently and notably higher than the neighboring counties and the state. Within this category, the greatest portion of those families, 4.9%, are households headed by females who are under the age of 44, indicating the presence of children in poverty.
Table III-8
Households Below the Poverty Level by Household Type – 2000
Clarke County Region and the State of Georgia
The non-family households category shown in Table III-8 is, however, where the biggest discrepancy is found between Clarke County’s poverty rate and that of the region and state. As shown, approximately 20% of total households below poverty in Clarke County are categorized as non-families while the remaining counties and the state have less than 7% within this group. Further, approximately 14% of the 20% are households under the age of 25. The fact that such a large portion of the non-family households are under age 25 suggests that the data is being strongly influenced by the reporting of college students as part of the county’s poverty status assessment. It is likely that some portion of these younger households are non-college related and represents general households in need. However, this determination cannot readily be made based on the available data and is beyond the scope of this analysis. If, however, the majority of this age group were assumed to be college related and removed from the total number of households, the percentage of households below the poverty level (estimated at 13%-15%) would be generally equivalent to the regional and statewide percentages. In comparison, an analysis conducted by Partners for Prosperous Athens, an affiliate of the UGA’s Fanning Institute, concluded that the poverty rate in 2000 was 23.5%, based on an analysis of data at the census tract level that attempted to exclude the influence of college households.
Housing TrendsA breakdown of the change in housing units by type, between 1990 and 2000, in Clarke County is presented in Table III-9. According to the Census data presented in this table the county’s total housing supply increased by 6,155, or approximately 17%. The increase in the number of single- and multi-family units was almost equivalent with 3,233 and 3,169 units added, respectively. This represents an average annual increase of approximately 320 units for each housing type. As of 2000, single-family homes, which include condominium units, accounted for about 50% of the housing stock and multi-family units represent 44%. Mobile homes increased only marginally with 33 units added throughout the ten-year period.
Table III-9
Total Housing Supply, Tenure and Vacancy 1990 – 2000
Clarke County
Regional housing trends for the previous decade, which are illustrated in Table III-10, indicate that although Clarke County absorbed a significant amount of the area’s demand for new housing, the housing supply in adjoining counties increased at overall faster rates. As noted above, Clarke County’s total housing stock increased by 17.1% between 1990 and 2000. Growth rates for other counties in the region ranged between 24% in Madison County and 45% in Oconee County. Total housing growth within the region was approximately 17,000 units, of which, Clarke County absorbed 36% with the four remaining counties
Table III-10
Total Housing Supply 1990 and 2000
Clarke County Region and the State of Georgia<span class="Report-0020Body-0020Text--Char">absorbing 74%, or approximately 11,500 units. Most notable of these outlying counties, was the
absorption of over 4,400 units in Jackson County, a total that approached the 6,155 units added in Clarke County, but in a considerably smaller housing market of approximately 16,230 total units, as compared to 42,126 in Clarke County.
The number of units occupied by owners versus renters reveals an interesting characteristic of Clarke County’s housing market. Renter-occupied units, which totaled 23,025 in 2000, well exceeded the 18,373 multi-family units that would typically represent the rental housing supply (see Table III-9). This means that over 4,600 single-family dwellings, either which may have been detached or attached units, were being used to support the rental housing market indicating that construction of apartment-style units was inadequate to meet demand during this time period. As of 2000, only 1,800 of the county’s 20,942 single-family homes were attached units. Presumably, the strong demand for rental units is being driven by the need to house college students in the area since the University of Georgia (UGA) has housing availability for only approximately 7,300 students on campus with a total student body that exceeds 32,000.
Vacancy rates in Clarke County decreased throughout the previous decade to 3.4% as of 2000 (see Table III-9). The for-sale inventory of only 267 available units in 2000 indicates an exceptionally tight homeownership market. The supply of rental units available (1,175 units) is considerably higher and represents a more moderate vacancy rate of approximately 6% when compared to the total number of multi-family units (18,373). This is actually a surprisingly high vacancy rate for rental units in light of the fact, as noted above, a portion of the single-family housing inventory was being used to satisfy rental demand as of 2000. It may be an indication that this portion of the rental stock is deficient in some way or otherwise not well received within the marketplace.
Property ValuesTable III-11 provides an overview of changes in the property tax base over the last decade. This data was obtained from the State Department of Revenue and is based on information maintained in the tax digest by the Clarke County Assessor’s Office. Property values presented in the table have been aggregated into eight major categories of general uses and ownership. It should be noted that the values presented in the table represent 40% of the fair market value, which is the assessment ratio mandated by state law for property taxation purposes. As illustrated, Clarke County’s total property tax base increased from approximately $2.3 billion to $4.6 billion dollars between 1997 and 2005, an overall growth rate of 97% and an average annual change of 8.9%. Historical and Conservation Use properties had the largest percentage growth rates during this time period. However, the most significant real growth in taxable property occurred in the Residential and Commercial use categories. Residential properties increased in value by approximately $930 million, or 124%, while Commercial property values increased by $324 million, or 54%. Also experiencing significant growth were properties classified as Exempt, which includes uses such as schools, churches, and government facilities, that are not subject to property tax levies. The value of these properties increases by approximately $949 million, or 130% over the last eight years. As of 2005, Exempt properties represented an equivalent percentage of the total tax base to Residential properties, which was 36.3%. Commercial properties represented about 20% of the tax base, Industrial properties accounted for 5%, with the remaining categories at less than 2% each.
Table III-11 also illustrates the change in millage, or tax rates, a rate that is used to calculate property tax bills based on assessed value, during the time period examined,. The county’s millage rate has remained fairly stable, and actually decreased overall during the last eight years, although individual components such as the school tax, have increased somewhat. This is an indication that growth in the county’s tax base, which is due to both new construction and inflationary increases in property values, largely negated the need to increase tax rates during that time period. It may also be representative of the fact that county expenditures were moderated in order to minimize impacts on the tax rate; however, annual budgets were not examined as part of this analysis.
Table III-11
Summary of Clarke County Tax Digest 1997-2005*
(40% of Fair Market Valuation)
Table III-12
Residential Building Permits 2000 – 2006*
Clarke County
The population trends and housing market conditions discussed in the preceding section indicate that a pent up demand for more housing in Clarke County, as well as the region as a whole, was materializing throughout the course of the 1990s. This demand, combined with revisions to the land use regulations that evolved from the 1999 comprehensive plan update for Clarke County, has resulted in a dramatic increase in housing construction over the last six or seven years. Building permit data monitored by the county indicates that over 8,190 housing units have been permitted between 2000 and June of 2006, as shown in Table III-12. This represents an average annual increase of approximately 1,260 units per year which was more than twice the rate of housing construction during the preceding 10-year time period (616 units per year). Furthermore, 2,035 more units have already been constructed in the first 7 ½ years of this decade in comparison to the prior ten years (note: a portion of the building permits shown in year 2000 may also have been recorded in the total census count that occurred that same year).
Single-family homes experienced the largest increase between 2000-07, approximately 4,330 units, representing almost 53% of total units permitted. Apartment permitting occurred at a considerably lower rate than single-family homes, 256 versus 667 annually, with construction peaking in year 2002. Slightly more condominium permits were issued annually at 286, with the largest increases posted between 2003-05, at a time when apartment construction was being curtailed. This lower rate of apartment construction is somewhat surprising given the apparent demand for rental housing discussed in the previous section and indicates that single-family and condominium units continue to support this segment of the market. Discussions with real estate representatives in the area indicate that these types of units, and condominium units in particular, are purchased as an investment by parents of college students for use during their school terms, which can then be resold at a profit. A review of ownership records in the real estate property digest revealed that 15% of housing structures (4,742 properties) listed in the database (excluding multi-family structures) were owned by absentee owners who have addresses outside Clarke County. Of that total, 12.6% (3,869) lived in other locations in Georgia while 2.9% (873) had out-of-state addresses. Although a number of these properties may still be under ownership of the original developer of the property and have yet to be sold, this level of absentee ownership does suggest an interest by outside investors to participate in Clarke County’s real estate market.
When building permit activity is compared to estimated population growth through the first half of this decade (2000-05) it becomes readily apparent that the housing supply would be considered extremely overbuilt to support the permanent population of the county; an observation that was noted in the draft housing assessment of the county’s current comprehensive plan update<span class="Footnote-0020Reference--Char"><sup>3. Based on population estimates prepared by the ACC Planning Department for 2005 of 7,598 additional residents between 2000-05 it would result in the need for approximately 3,233 housing units, based on an average household size of 2.35. In comparison, there were 7,753 housing units permitted during this same time period indicating an excess supply of 4,520 units. This estimate does not even consider the approximately 1,430 existing vacant units that were available in the market in 2000. It is assumed that demand for excess units is being driven primarily by the need to house college students in the area. There is, however, some indication that the market is reaching saturation based on the apparent slowdown in permits that seems to have occurred in 2006 with only 439 permits having been issued through June.
Residential SalesA more detailed analysis of the county’s housing market was conducted by examining residential sales data contained in the County Digest maintained by the Clarke County Tax Assessor’s Office. Sales records for arms-length, or fair market transactions, between 1995 and 2005 were selected from this database and aggregated by housing type as presented in Table III-13 and Figure III-3. Overall, there were approximately 17,900 sales of residential properties recorded in the county during this period, which increased by 9% annually through 2004 before beginning to drop off considerably in 2005. In fact, the number of sales in 2005 (1,199) was less than half the total 2,457 sales recorded in the previous year indicating an adjustment is underway in the housing market, a trend that is being observed in many locations throughout the country. On average during this time period, 1,628 units were sold annually within the county’s real estate market.
Figure III-3<span class="Report-00201st-0020indent-0020body-0020text--Char">Single-family, condominium, and duplex units accounted for the bulk of total sales although single-family sales of 13,671 far exceeded all of the others. However, from a pricing perspective, average annual increases of 7.9% in condominium sales prices exceeded the 6.5% growth rate for single-family homes. Condominium sales also increased from 11% of total sales in 1995 to 20% in 2004 (data not shown) indicating that this type of unit gained increasing acceptance in the market place throughout this time period as an alternative for homeownership, but was also an apparent response to the demand for college-related housing. The largest increase in average sale prices for condominiums occurred in 2003 as more high-end units began to reach the market. However, these price levels were being presented as the market began to cool resulting in a flattening of prices by 2005.
Table III-13
Residential Home Sales 1995 – 2005
Clarke County
The average sale price of a single-family home in 2005 was approximately $180,200, an increase of $84,000 in ten years representing an 87.9% rate of growth. Duplexes experienced a comparable rate of increase (88.1%) with the fastest growth in price occurring before 2000. Condominium sales increased by $73,000 during this time period, which represented the largest increase growth rate in average sale prices of 114.2%. The sale price of condominiums and single-family homes increased more rapidly after 2000, as illustrated by the average annual growth rates presented in Table III-13.
A second comparison of the price structure in the residential market was made between the sales of older versus newer single-family homes and condominiums, with the demarcation point being units constructed before and after 2000. For single-family homes, the data in Table III-14 indicates that the average sale prices for older and newer homes have been fairly comparable over the last five years. This fact is reflected in the “% Difference” portion of the table that shows a variation in price structure of no more than 7% in a given year. This suggests that older homes in the market have tended to retain their value and that the pricing of newer homes, on average, has tended to remain at levels that are more moderate. Condominiums, on the other hand, have experienced much more dramatic increases in the pricing of newer units being brought to market. As illustrated by the difference in percentage of average sale prices, newer condominium units sold for 60% to 101% more than older units over the last five years. This indicates a substantial increase in the value of more recently constructed units that has actually
Table III-14
Comparison of Average Sale Prices for Older vs. Newer
Single-family and Condominiums in Clarke County<span class="Report-00201st-0020indent-0020body-0020text--Char">placed them on a par with the average sale price of single-family homes.
Commercial Real EstateRecent trends in the commercial real estate market of the Clarke County area were examined to identify existing inventories of building space, values, lease rates, and absorption of new space over recent years. The primary source of the inventory and sales data was the county digest commercial database but additional information was also gathered from area real estate brokers and property listing services. While the main focus of this analysis is Clarke County, some secondary information has also been gathered for commercial trends, particularly office and retail development, in Oconee County. Commercial development in this county, especially its northern extent, has largely evolved as an extension of the greater Athens-Clarke County urbanized area that extends out along the Perimeter Highway and Epps Bridge Road. Indications are that this portion of Oconee County has evolved as a viable location for new commercial development in the marketplace that offers good highway access to the greater Athens area as well as the Atlanta metro area.
Table III-15
Non-Residential Building Space – 2005
Clarke County
Table III-15 presents an overview of total building space for commercial, industrial, and other non-residential structures in Clarke County as of 2005. This inventory does not include any tax-exempt properties such as hospitals, educational facilities, or government buildings. As shown, there was approximately 25.6 million square feet of existing space in the county. Of that total, approximately 11.5 million, or 45% was contained in manufacturing and warehouse space. The second largest portion of the inventory was retail space (23%) which accounted for 5.8 million square feet, followed by office and professional space of 3.8 million square feet, representing 15% of the inventory. The office category includes approximately 900 buildings or building units of which, 735 are general office and 167 are medical related facilities. Medical offices accounted for roughly 25% of existing space, a total of approximately 872,000 square feet, with 2.7 million square feet of non-medical space. The non-medical space includes all types of office buildings ranging from professional office parks to individual office buildings that may be part of a multi-use property. The data in Table III-15 indicates that the average size of a medical office (which may be a single condominium in a multi-tenant building) is approximately 5,220 square feet while a general office building contained only 3,736 square feet, on average. There is likely to be some additional medical office space owned by the two hospitals in Clarke County (Athens Regional Hospital and St. Mary’s) that is not reflected in this total since these facilities are tax-exempt and therefore, not tracked by the County Assessor’s Office.
An estimate of absorption rates for office and retail commercial building space was obtained from the county digest based on year built of the structure<span class="Footnote-0020Reference--Char"><sup>4. Overall, the amount of construction in the office sectors has been relatively strong in recent years in comparison to the amount built during the 1990s. Table III-16 illustrates that approximately half of the county’s medical office space was built after 1990 with one quarter of the space, approximately 217,800 square feet, constructed within the last five years. On average, the county has absorbed just over 36,000 square feet of medical space each year since 2000, which is about twice the rate of construction that occurred between 1990 and 1999.
Table III-16
Absorption Rates of Office and Retail Building Space
Clarke County
Absorption rates in Clarke County for general office space have been about 40% higher than those found in the medical office sector. Since 2000, approximately 360,000 square feet of new office space has been added to the market for an average of 60,000 square feet annually. This rate of absorption was also approximately 40% higher than the rate of construction in this segment of the market during the 1990s. Some of this newer space is found in locations off the Atlanta Highway such as the Coggins Business Park, as well as on Epps Bridge Road and Jennings Mill Road, but is also occurring in converted commercial and industrial buildings located in and around the downtown area. There have been a number of infill and retrofit projects of this type over the last several years that have been made possible by changes in the zoning code as well as the availability of tax incentives for the reuse of historic structures.
Finally, absorption rates of new building space in the retail sector were considerably higher than in the office sector, but have remained relatively flat since 1990. Within the last five years approximately 704,000 square feet has been added to the inventory, which represents an annual increase of 117,355 square feet. This rate, however, shows a slight decrease in comparison to annual absorption occurring during the 1990s when approximately 129,000 square feet of space was constructed each year on average.
Despite these recent absorption rates, there are some indications that the market for new office space in the Athens area may be softening somewhat, based on discussions with area developers and real estate brokers. One such developer indicated that an approved medical office project planned for Sunset Drive, on the VFW property near the NSCS facility, would be put on hold due to this perceived market shift. A major factor that has begun to affect Clarke County’s office market is the significant amount of office space being constructed to the south in Oconee County, a trend that may temper demand over the short-term. The total amount of existing office and retail square footage in Oconee County is not tracked by any of the county’s departments on a systematic basis and therefore, an actual figure could not be determined as part of this analysis. However, a conservative estimate, based on discussions with local officials and a review of available data, would place office space between 0.75 and 1.0 million square feet with retail development in excess of 1.0 million square feet (note: these estimates include buildings currently under construction as of 2006). Discussions with area officials and developers indicate that the vast majority of the county’s office and retail space has been constructed within the last five years, which means the condition and quality will be higher than a large portion of Clarke County’s inventory, which was built prior to 2000.
To a large extent, office construction trends in Oconee County, similar to Clarke County, have been geared primarily toward tenants/owners who require smaller spaces in the range of 5,000 square feet that are typically configured in executive-style office parks comprised of attached condominium units or groups of small, multi-tenant buildings. The exception to this are two new office building complexes nearing completion on Daniels Bridge Road at the intersection of Route 316. One project, University Parkway & Technology Park, contains two Class A office buildings each with approximately 70,000 sq. ft. of space. One of these structures is entirely occupied by the University System of Georgia while the second is expected to be leased to a more traditional mix of professional office tenants. The second adjoining office development, The Exchange, includes three, 36,000 square foot buildings, one of which is entirely leased by St. Mary’s Hospital with the two remaining buildings expected to contain a broader tenant mix. These properties, as well as a few other recently constructed buildings of similar quality on Epps Bridge Road in Clarke County, represent a new product within the office market that has only been introduced within the last few years. They are bigger buildings that have the capacity to attract a single, large office user or they can be customized to accommodate smaller users, if warranted. It is very possible, and there is already anecdotal evidence to support the contention, that some existing office tenants in Clarke County may relocate from their current facilities to this newer and higher quality product. This may result in a larger inventory of vacant, older office space that could contribute to a lowering of lease rates for such properties, at least in the short-term.
Commercial Office and Land SalesTable III-17
Sales of Office Buildings 2000 – 2005
Clarke County
An examination was conducted of fair market sales over the last five years for medical and general office space in Clarke County. As summarized in Table III-17, there was very limited activity in the medical office sector with only 24 total sales in six years. This finding correlates with the relatively modest absorption of new construction discussed in the preceding section. It may also suggest that the market is oriented more toward leasing than ownership but may also be attributable to a lack of new product being constructed. Overall, the sale price for medical office space ranged between $93 - $188 per square foot for all sizes and ages of buildings. However, the upper end of the market was found to be in the $200-$220 sq. ft. range for new construction on Oglethorpe Avenue at the Perimeter Highway and for an office park located just outside the Perimeter on Jefferson Road (Prince Avenue). A medical office sale on Prince Avenue in 2002, located across from the Navy School, recorded a price of $1.38 million at $166 per square foot. Another sale that year in the vicinity off Hawthorne Road, sold for somewhat less at $131 sq. ft., while a condo unit in the medical office park on Sunset Drive (adjacent to the Navy School) sold for $125 sq. ft. in 2005.
Sales activity in the general office market was higher over the last five years with a total of 114 sales, or an annual average of 19 sales. Sale prices for general office space were found to be the highest in and around the downtown area, as well as at locations out on the Atlanta Highway with overall prices ranging between $91 - $130 sq. ft. Office space created from converted commercial/industrial buildings in the downtown area were observed to be selling for rates ranging between $125 and $220 per square foot with the majority of these sold in 2005. On Prince Avenue, one sale was noted at $154 per square foot while a property situated at the corner of College and Dougherty sold in the vicinity of $150 sq. ft. On average, newer office construction, built after 2000, was found to be selling for $100-$140 sq. ft.
A review of recent office sales prices in Oconee County indicates that prices are generally comparable to those reported for Clarke County. The primary difference between the two submarket areas is that Oconee has a smaller supply of older building space and therefore, has fewer sale prices in the very low end of the sales pricing spectrum. Based on a review of sales data from the County Assessor’s on-line records, office sales in Oconee County between 2003-2005 had an average sale price of approximately $140 sq. ft. with prices typically in the range of $115-$165, for both medical and general office facilities.
The number of sales of commercial and industrial land in Clarke County was relatively modest over the last five years with a total of 189 fair market transactions recorded between 2000 and 2005, averaging about 30 per year. Like the sales of improved property noted above, the value of land varies significantly within the county depending on location, size of parcel, access, and development potential based on zoning regulations.
Sales of land in the downtown area of Athens (the Commercial Downtown (C-D) zoning district), of which there were only seven arms-length transactions over the last five years, achieved the highest values averaging approximately $790,000 per acre. In the zoning districts that branch out from the downtown and encompass lower density commercial corridors such as Prince, Cedar Shoals, and Gaines School, the values drop to an average of $181,900 per acre in the Commercial Neighborhood (C-N) district and $77,600 per acre in the Commercial Office (C-O) district. Two sales on Prince Avenue during this time period had values per acre of $104,478 in the C-O district and $434,783 in the C-N district. A third sale, with a price of over $5.1 million per acre, was also found but this parcel was purchased by the Athens Regional Hospital and the price is believed to be artificially high due to its relationship to an on-going development project on the corridor.
Along the major commercial corridors of Broad Street and the Atlanta Highway, which are zoned Commercial General (C-G), land sales average $572,800 per acre with some sales in excess of one and two million dollars per acre, depending on frontage, access and visibility conditions. Excluding these higher priced sales brings the average price per acre along this corridor in the range of $250,000 - $450,000. In other commercial corridors with the same C-G zoning designation, but smaller concentrations of development, such as Lexington, Hawthorne, Jefferson, and Commerce, land sales averaged only $165,000 per acre.
Finally, land located in the county’s older industrial parks, with zoning designations such as Employment Office (E-O), Employment Industrial (E-I), and Industrial (I), had land sale values at the lower end of the commercial spectrum, which is typical in most markets. The Coggins Industrial Park area off the Atlanta Highway had average sale values of $61,700 per acre, while land sales in other parks such as Athens Commerce, Paradise Valley and Athena had values ranging from $35,000 - $45,000 per acre. The exception to this was found at the E-I district on Jefferson Road that has been developed with medical offices and had average land sale values of $775,000 per acre for seven sales, most of which were in 2001.
Commercial Lease RatesA review of commercial lease rates for office and retail properties within the Clarke County market was compiled based on listings obtained from several commercial listing services, as well as discussions with area brokers and developers. There is, of course, wide variation in the lease rates of available properties, which is based on the age, quality, size, and location of the property. However, the overall range that was generally observed for better quality office properties in the market was between $15-$20 square foot. These rates have reportedly remained stable or increased slightly over the last few years.
There were very few listed properties in the vicinity of the NSCS facility and those that were identified on Oglethorpe Avenue tended to be older structures leasing in the $11-$13 sq. ft. range. Space at the renovated Coca Cola Bottle Works is being offered at approximately $15 sq. ft. (two spaces totaling 4,274 sq. ft.) while 6,500 sq. ft. in the downtown’s Fred Building is available for $16 sq. ft. Properties fronting along the Atlanta Highway are leasing in the $10-$12 sq. ft. range with office/flex space in the Coggins Business Park available for under $10 sq. ft.
The higher end of the office leasing market observed in current listings is $18.50 sq. ft. for the new Class A office buildings on Daniels Bridge Road in Oconee County and Epps Bridge and Timothy Roads in Clarke County. Space in some of these buildings may also involve extra costs for “fit up” of shell space that could result in higher effective lease rates if the tenant exceeds the developer’s allowance for such costs.
Retail lease rates in and around Athens and the Clarke County area tend to range generally between $13-$18 sq. ft., based on recent property listings. The higher end of the range is found in new construction along the Atlanta Highway/Epps Bridge Road corridors, as well as in renovated space in existing structures located in downtown Athens. One new construction listing on Epps Bridge Road had an asking range of $16-$25 sq. ft. suggesting that rates in this location may be on the rise. In the downtown area, 1,100 sq. ft. of first floor retail space in a mixed-use building (with office condos in the upper floors) was leasing for $13 sq. ft. while 4,200 sq. ft. of restaurant space in a mixed use structure was listed at $18 sq. ft. As noted above with regard to office lease rates, age and location of the structures also affects the potential rates for retail space in the market. As such, available retail space on commercial corridors or side streets outside the high rent areas ranged anywhere between $8-$13 sq. ft.
Employment and Labor Force Trends Historic Employment TrendsChanges in employment levels within Clarke County, the Athens Metropolitan Statistical Area (MSA)5, and the State of Georgia were examined for the ten-year period between 1990 and 2000. This data, which is presented for total employment as well as by major industry sector, provides a historical perspective regarding some of the differences within the regional economy and in comparison to the state as a whole.
Table III-18 presents changes in total non-farm employment from several different perspectives. These include changes in total employment, as well as wage and salary employment versus proprietor employment. It also presents the changes in employment for the whole decade, as well as the two five year increments that comprised the decade, and an overall average annual change for the ten-year period.
Total employment in Clarke County as of 2000 was approximately 75,970, with 93,990 in the MSA indicating that 18,000 jobs, or 19% of the metro area employment was located outside the central county. This was up 4% from a total of 15% in 1990. Overall, Clarke County’s total employment increased by 21.6% between 1990 and 2000 in comparison to 28.2% for the MSA indicating that the portions of the region outside the county enjoyed stronger job growth during that time. However, the region lagged behind the state as a whole with total employment in Georgia increasing by over 33% throughout the decade. The average annual rates of employment growth over this ten-year period for the County, MSA, and state were 2%, 2.5%, and 2.9%, respectively.
From an employment perspective, the four largest sectors of the county’s economy in 2000 were Services (20,663 jobs), Government (18,716 jobs), Retail Trade (14,349 jobs), and Manufacturing (10,273 jobs). Total manufacturing jobs shrank by 4.6% during the decade, which was in contrast to the 5% statewide growth experienced in this sector during that time. The other growth sector for the state that was not reflected in the local economy was Wholesale Trade where statewide employment increased by 20.3% while Clarke County’s sector declined by 13%.
The amount of Proprietor employment, which is generally comprised of single person firms, accounted for approximately 11% (8,642 employees) of the county’s total employment in 2000. Although the state’s total proprietor employment was approximately 15% at that time, the county’s rate of increase in this segment of the economy, 53.4%, outdistanced the state’s growth rate of 49.6% throughout the course of the decade. This suggests there is a positive business climate within the county for small or start-up businesses.
Table III-18
Historic Employment Trends 1990 – 2000
Clarke County, Athens MSA and the State of Georgia
The rate of employment growth in Clarke County, as well as the MSA, slowed in the second half of the decade, as illustrated in Table III-18. Between 1990 and 1995, the county’s total employment increased by 11.2%, but in the subsequent five years (1995-2000) the rate of increase dropped to 9.4%. A similar scenario was evident for the region as a whole although the rates were somewhat higher (14% and 12.4%). In comparison, Georgia’s total employment growth went up at an increased rate from 14.7% to 16.4% respectively, during those two periods. This data indicates that the state’s economy rebounded more strongly, and for a more extended number of years, in the post-recessionary period after 1995 when the region’s employment growth had already started to slow. This is also an indication that growth sectors within the state’s economy were not as well represented in the Clarke County region during that period.
The strongest growth sector during the decade for the county and the MSA was the Services sector where Clarke County added over 7,100 jobs with a total of approximately 8,900 added throughout the region. Following this sector were the Retail, Government, and FIRE (Finance, Insurance, and Real Estate) sectors where a total of just over 6,000 jobs were added in the county and approximately 9,200 throughout the region.
The Transportation and Public Utilities sector of the county’s economy had a strong percentage growth (37%) in employment throughout the decade, but represents a relatively small portion of total job growth (562 jobs). In fact, the growth rate in this sector slowed during the second half of the decade while the state’s growth rate continued to increase. Lastly, the Construction sector also added only a modest amount of jobs during the decade (449) but grew at a faster rate during the latter part of the decade as the pace of housing and other construction expanded.
Recent Employment TrendsA more detailed examination of recent changes within Clarke County’s employment base was conducted for the period of 2001 to 2005. This data, which was obtained from the Georgia Department of Labor, is gathered as part of the Quarterly Census of Employment and Wages Program (QCEW) and represents all covered employees within the county who were working and covered by the state unemployment insurance law. Therefore, it does not include self-employed, proprietor employment (and military personnel) totals noted in the previous section, which was obtained from a different data source. In addition, the QCEW data is categorized according to the North American Industry Classification System (NAICS), established in 1998, whereas the historical data in the preceding section was organized under the previously used Standard Industry Classification (SIC) codes and therefore, is not directly comparable to the information presented in this section.
The data in Table III-19 shows that Clarke County had an employment base of approximately 63,330 jobs as of 2005. Of that total, 44,550 were private sector jobs while 18,780 were in the public sector. The fact that approximately 30% of the total employment base is comprised of public sector jobs means that the area should be less susceptible to fluctuations affecting the broader economy. The data also indicates that Clarke County experienced a net increase of 2,180 jobs within its economy between 2001 and 2005, an increase of 3.6%, which was more than double the statewide increase of 1.7% during this period. This net increase in the county’s total employment is a reflection of 3,577 jobs added in the Service Producing sectors that were offset by a loss of 1,396 jobs in the Goods Producing sectors. A further examination of the job growth within the county reveals that only 535 of the net increase occurred in private sector establishments with the remaining 1,647 jobs, or 75% of the total net increase, being added to the state and local government sectors of the economy. In fact, the largest single increase occurred within the state government sector where an estimated 1,450 jobs were added during this period. The majority of this increase is likely attributable to growth at the University of Georgia, which is the largest state-operated entity in the county.
Table III-19
Total Employment and Establishments 2001 - 2005
Clarke County
Table 19 (continued)
Total Employment and Establishments 2001 - 2005
Clarke County
The number of establishments increased at a faster rate than total employment with a 7.4% rate of growth during this five-year period. Overall, 212 new establishments were added to the economy with the vast majority (201) being private sector firms. This fact, in conjunction with the relatively small increase in private sector employment, indicates that the primary growth in new private sector employment over the last five years has been attributable to the creation of small, start-up or spin-off businesses.
Changes within the major industry sectors revealed several notable trends in the county. Employment in the Manufacturing sector continued the decline observed in the previous decade although at a higher rate. Approximately 1,300 jobs were lost over the five-year period, a decrease of 14%. Clarke County’s manufacturing base is anchored in some of the more traditional industries such as poultry and other food manufacturing subsectors. However, there are also a number of small to mid-sized firms producing more technologically advanced products related to synthetic fabrics, fiberglass, finely machine parts, and engine superchargers.
Although most Manufacturing subsectors in Clarke County experienced a decline during this period, chemical manufacturing was the exception with the addition of 288 jobs representing almost a 39% increase. The county has five firms involved in chemical manufacturing, two related to agricultural products and three in pharmaceutical production, which is where this job growth is likely to have occurred. Firms such as Merial, a rabies vaccine manufacturer and Noramco, a manufacturer of pharmaceuticals, are part of the bio-pharmaceutical sector that is anticipated to be a strong growth industry in the future. A recent report from the Selig Center for Economic Growth at UGA indicated that favorable conditions would continue for this industry in the short-term but uncertainty regarding fuel costs could diminish future growth.6 The Selig report identified the Atlanta-Athens-Augusta triangle as the prominent center of Georgia’s bio-pharmaceutical industry with its foundation in the area’s major research universities, hospitals, medical schools, and the Centers for Disease Control. The Route 316 corridor between Athens and Atlanta has been promoted as a future biotechnology corridor, but has yet to attract any notable growth. In fact, a recent attempt to attract a major flu vaccine manufacturer to this area was not successful with the company selecting another state due to the greater availability of existing work training programs for biotech workers and a site located in an existing industrial park. This is an indication that workforce training is likely to be a critical factor in the future success of the area’s biotechnology sector.
The two largest growth sectors within the county were the Health Care and Social Assistance sector and the Accommodation and Food Services sector. Health Care added over 1,300 jobs, a 17.5% increase, while the latter sector expanded by approximately 1,110 jobs for a growth rate of 20.7%. These two sectors also added 46 and 50 new establishments respectively, over the last five years. The third largest increase in total employment occurred in the Educational Services sector, which added approximately 965 jobs representing a 7.5% rate of growth. Much of the growth in this sector is likely attributable to expansion of the UGA services during that time.
In the Health Care sector, approximately 300 jobs of the 1,300 total were added in the public sector with the remaining 1,000 jobs representing private sector growth (data not shown in table). With the exception of nursing homes, all subsectors in Health Care had strong growth, especially ambulatory care services which added over 800 jobs. Local area hospitals such as Athens Regional Medical Center (ARMC) and St. Mary’s Hospital added 114 additional staff, a fact that is reflective of recent and anticipated expansion plans, as well as the anticipated efforts to add more community outreach facilities throughout the region in the future. These hospitals are two of the five largest employers in Clarke County, according to the State of Georgia Department of Labor.
The Trade sectors had mixed results over the last five years with minor growth in Wholesale sector of 3.1%, but significant declines in the Retail sector that eliminated over 770 jobs representing a 9.5% rate of loss. This reduction in retail jobs is a trend that has occurred throughout the state although sales have continued to remain healthy, according to the Selig Center report. It should also be noted that, based on the commercial absorption rates discussed previously in this report, Clarke County has continued to add a significant amount of retail building space over the last five years. The combination of these two opposing statistics is indicative of the trend toward creation of larger retail establishments that are serviced with reduced staffing levels. The biggest decline in this sector, as well as throughout the state, was in the food and beverage subsector, which lost 371 jobs, although non-store retail businesses (e.g. electronic shopping, mail order catalogues) experienced a similar loss of 358 jobs, which is contrary to the overall success of this subsector in general. The only subsector to experience a net increase during this period was electronics and appliance stores where 245 jobs were added.
Table III-20
Top Employment Shift Trends 2001 – 2005
Clarke County<span class="Report-00201st-0020indent-0020body-0020text--Char">The area’s Information Technology sector recorded a loss of 281 employees, or 20.7%, a trend that has been echoed across the state over the last five years. Primary losses were in the Telecommunications subsector. However, the 2006 Selig report concluded that losses in the sector are expected to stabilize by the end of 2006 with “brisk” growth throughout the remainder of this decade that may erase losses that
occurred over the previous five years.
Table III-20 presents the top ten subsectors that experienced the largest gains and losses in employment over the last five years. These changes are ranked from both an absolute and percentage change standpoint. This table illustrates in more of a summary fashion the trends that have been discussed above.
More detailed industry-level employment trends were examined for several of the key growth industries identified in Table III-20 as the highest net increase in total employment. Further examination of growth in the sectors related to retail (443) and real estate sales (531), as well as the construction industry (236), yields no more useful insights than those provided by the three-digit subsector data. In the subsectors related to wholesalers (424) and chemical manufacturing (325) more detailed employment information is suppressed because of confidentiality reasons due to the limited number of businesses included in these areas. However, in the Ambulatory Health Care (621), Social Assistance (624), and Administrative and Support Services (561) subsectors, more detailed industry data was available and is presented in Table III-21. Within Ambulatory Care, doctor’s offices and other outpatient care centers were two of the largest growth areas along with home health care services adding 348 and 117 employees, respectively, over the last four years. These industries also added 32 new establishments between them. Home health care services added 244 employees but no new establishments.
In the Social Assistance subsector, the majority of employment growth occurred in the individual and family services area, which added 411 employees and 8 establishments. The majority of this growth was in private sector businesses although they are likely to be non-profit or not-for-profit concerns. A lesser amount of growth was also recorded in the areas of childcare and emergency services.
Table III-21
Detailed Trends for Employment Growth Sectors 2001 – 2005
Clarke County
Finally, the Administration and Support subsector had several industries with significant growth over the last several years. The largest increase was in the business support services, which added 479 employees and may represent a response to growth in the health care industry requiring more record keeping and related types of administrative assistance. This may also pertain to the increase in office administrative services that added 213 employees and 10 establishments. The remaining major growth area was employment services, which added 282 employees, and includes establishments that provide temporary staffing for area businesses.
WagesAn overview of recent wage rates for Clarke County is presented in Table III-22. The data illustrates total wages by major industry sector as well as a comparison of average annual wages of the county to those of the MSA and the state. Total wages paid in 2005 were approximately $2.12 billion, which represents a combination of both private and public sector payrolls. From an overall perspective, annual wages in Clarke County are very competitive with those paid throughout the remainder of the MSA with the county generally equaling or exceeding the MSA in most sectors. However, in comparison to the state as a whole, average wages paid in Clarke County are not competitive, with the exception of several of the county’s strongest sectors. For all industries, the average annual wage of $33,523 represented 103% of the MSA average but only 85.8% of the statewide average. This discrepancy has remained unchanged over the past ten years when, in 1996, the average wage in the county represented 87% of the average wage paid throughout the state.7
Table III-22
Wages by Major Industry Sector 2005
Clarke County, the MSA and the State of Georgia<span class="Report-00201st-0020indent-0020body-0020text--Char">The largest sector within the county’s employment base, in terms of total wages, is Educational Services, which accounted for over $530 million in wages representing approximately 25% of all wages paid in 2005. This was followed by Health Care at $361 million and Manufacturing with $348 million in total wages, with each of these sectors accounting for approximately 17% of total wages paid in the county. Correspondingly, these three sectors also have average annual wages that exceeded the averages paid throughout the state. Also of note is the Public Administration sector that provides wages that are competitive with wage levels of government jobs across the state although total earnings in this area represent only 7% of the county’s total.
Aside from the four noted above, all other sectors of the county’s employment base offered wages that were less, and in some instances considerably less, than the state averages. The biggest discrepancy was in the Information Technology sector where wages were only 47.5% of the state average in 2005. This sector also lost roughly 20% of its jobs over the last five years within the county, a trend that was likely affected by area wage rates. Sectors such as Retail and Accommodations and Food Services may be able to offer lower wages than other parts of the state but still retain an adequate labor supply due to the availability of a large potential labor pool represented by students from the university since such jobs only represent temporary employment for these individuals. However, the lack of competitive wages in other more professionally oriented and specialty service sectors places the county at a distinct disadvantage to other parts of the state and is one fact that may explain the consistent net out-migration of the population that was discussed previously in this analysis.
Table III-23
Employment Projections for Fastest Growing Industries
2002 – 2012 in Clarke County<span class="Heading-00203-002cReport-0020Heading-00203--Char">Industry Projections
Long-term industry employment and occupation projections are prepared periodically by the Georgia Department of Labor (DOL) for established analysis regions throughout the state. Clarke County is part of the northeast region Workforce Information & Analysis (WIA) Area 9 that includes a total of 12 counties</span><span class="Footnote-0020Reference--Char"><sup>8. The most recent DOL projections were prepared for the period of 2002 through 2012, which means that the historical employment trends presented in the preceding sections are already reflected within these projections.
The data in Table III-23 and Figure III-4 present employment projections for the 15 industry subsectors projected to have the largest total growth between 2002 and 2012 in WIA 9. Within a number of industry areas, these projections portray a representative perspective on changes that have occurred within Clarke County’s non-manufacturing employment base over the last five years. This is particularly evident in subsectors related to educational services, food/ drinking services, ambulatory health care, hospitals, administrative support services, social assistance, and state government, as portrayed in Figure III-4.
Figure III-4<span class="Report-00201st-0020indent-0020body-0020text--Char">Where Clarke County has diverged from the WIA projections is in the manufacturing and construction related sectors. Apparently, other portions of the region have been able to sustain growth in the paper and fabricated metals that are either not present, or are declining within Clarke County. Similarly, other locales are expected to see continuing growth in the construction sector throughout the decade, especially for specialty trade contractors, while Clarke County has lost over 300 jobs recently in this subsector.
Labor Force, Unemployment Rates and Commuting PatternsTable III-24
Labor Force and Unemployment Rates 1995-2005
Clarke County<span class="Report-00201st-0020indent-0020body-0020text--Char">Changes in total labor force and unemployment rates for Clarke County over the last decade are presented in Table III-24. As shown, the county’s labor force added approximately 13,300 workers between 1995 and 2000, an increase of 29%. In comparison, the state’s labor force increased by only 17.5% during that time while the MSA grew at a slightly faster rate of 31.6% (data not shown in table). As of 2005, Clarke County had a total labor force of approximately 59,000 while the MSA’s labor force was close to 99,000 in total.
Table III-25
Active Job Applicants – 2006
Clarke County<span class="Report-00201st-0020indent-0020body-0020text--Char">Table III-25 provides a summary of unemployed workers in the Clarke County labor market who where actively seeking jobs as of August, 2006. These applicants are grouped into six general occupational areas as well as a miscellaneous category. Approximately 15% (347) of the available labor force can be broadly categorized as high skilled, white collar professional applicants who seeking employment in professional, technical, or managerial positions. However, the largest amount of available labor was in the semi- or low-skilled service and clerical positions that accounted for almost 45% (1,033) of the active job seekers. In blue-collar positions, approximately 10% (225) of total job applicants would be generally classified as more highly skilled-skilled laborers in the machine trades. Other blue-collar positions in the construction, materials processing and agricultural/forestry trades accounted for roughly 14% of the available labor force. The remaining 17% of applicants were undefined by the Department of Labor as working in miscellaneous occupations.
The rate of unemployment in the county during this time period remained fairly constant fluctuating between 3% and 4% with one isolated drop to 2.5% in 1999. As illustrated in Figure III-5, Clarke County, as well as the MSA, has experienced a lower unemployment rate than the state for most of the past decade. However, since 2003, there has been a steady rise in the county’s unemployment rate that has brought it to the highest level in a decade. This increase is likely related to continued job loss in the manufacturing sector combined with cuts in the retail sector over the last five years, as discussed previously in this report.
Figure III-5<span class="Report-00201st-0020indent-0020body-0020text--Char">Also evident in the figure is the fact that changes in the county’s unemployment rate have been more moderate than the state’s, which had more extreme fluctuations due to changing economic conditions. This indicates that Clarke County’s economy is less susceptible to cyclical economic variations, a condition that is largely attributable to the high percentage of government jobs that bolster the region’s job base.
Finally, a comparison of the county’s 2005 labor force of approximately 59,000 to the total 63,330 people employed in the county would suggest that only a small percentage of total workers at area businesses are imported from other parts of the region and the state. However, a review of commuting patterns from the 2000 Census indicates otherwise. As illustrated in Table III-26, approximately 47,000 residents of Clarke County identified themselves as working commuters but only 39,000 worked in the county indicating that 8,000 commuted to other locations. More revealing, however, is that of the 66,160 workers who commuted to Clarke County for work, over 27,000, or 40% came from outside the county.
Table III-26
Journey-to-Work Commuting Patterns
in 2000 - Clarke County
This data suggests several trends within the regional labor force.
One is that a considerable amount, about 18%, of the county’s resident
labor force (as defined by total commuters) is being drawn away from,
or cannot find employment within the local job market. Second
is that Clarke County’s economy is very dependent on the broader regional
labor pool. This fact could make area businesses more susceptible
to a siphoning-off of workers as the regional job base continues to
grow throughout the metropolitan area. Finally, this data also
indicates that a considerable amount of the regional labor force is
traveling, in some instances considerable distances, to Clarke County
for what may be relatively low average wages.
This chapter has presented an analysis of a wide array of demographic and economic conditions that characterize the area encompassing the Navy School property within the Clarke County region. The primary purpose of this analysis is to provide a context for evaluating potential reuse alternatives for the NSCS site from a socio-economic perspective. However, it should also be noted that this analysis raises a number of larger issues and conditions that exist within the region that will require a broader community planning and economic development strategy to address fully. The redevelopment of the Navy School property should be viewed as one component of this strategy with the recognition that this process cannot address all the identified needs.
The analysis in this chapter first focused on an examination of recent and historical demographic trends related to population and household growth, migration patterns, and income levels. Second, changes in the residential and commercial real estate markets over the last five to ten years were reviewed. For residential properties, this included construction rates of owner and renter-occupied housing units, as well as changes in sales volume and pricing levels. In the commercial real estate market, particular focus was given to the office, medical, and retail segments with regard to building absorption levels as well as sale prices and lease rates. Finally, an assessment of the area’s economic base, as it relates to employment and industry trends, was presented that highlighted existing and projected growth sectors within the region. Based on this analysis, as well as factors gleaned from other aspects of the reuse planning process, there are a number of conclusions that can be drawn with regard to the potential reuse of the Navy School property, which are discussed below.
A critical factor in any reuse alternative involving a fair market transfer and/or acquisition of the property that entails redevelopment of the site will be the purchase costs for land and buildings. Although an actual appraisal of the property’s value has not been conducted, recent land sales and discussions with area brokers suggest that potential purchase of the site could be significant. This cost, when combined with building demolition and infrastructure upgrade or replacement costs (which have not yet been estimated), will necessitate that a certain minimum density level of development occur on the site in order to recover said costs and, if completed by the private sector, return some level of profit as well.
Reuse of the Navy School’s existing structures in their current configuration is one potential alternative for the site; however, such a scenario has a number of limitations from a real estate market perspective. The buildings categorized as community support structures in an earlier chapter of this report (e.g. the Exchange, Commissary, gas station, clinics) would be valued very low in the private sector due to their age, location, condition, and availability of higher quality facilities that presently exist within the marketplace. The residential properties (excluding the bachelor’s quarters) could be more easily absorbed within the housing market with little, if any, anticipated negative effect on existing home sale prices (i.e. due to increased supply). However, the value of these types of dwelling units in the market would most likely be low to moderate in price and as such, would make it difficult to recover land costs involved with acquisition of the site, if required, via a fair market transfer of the property. The office and education facilities on the site could also be more readily absorbed into the marketplace, but expected values may be at the lower end of existing sale or lease rates given the age, design, and overall site limitations associated with these structures.
The property’s location within a high-density, mixed-use neighborhood comprised of residential, office and retail land uses, generally precludes a reuse alternative that involves manufacturing or other heavy industrial uses. This conclusion is also supported by the economic analysis that revealed there is low demand for such sites at this time, in conjunction with the fact that an adequate supply of industrial land is available elsewhere in the county.
A reuse alternative that combines office, residential and retail uses is considered a viable alternative for the site, based on market conditions, although several caveats apply. This type of reuse scenario, as noted above, is reflective of existing development patterns on adjoining properties and thus, would be suitable within the overall neighborhood context of the site. Although absorption rates in the office construction market may have reached a saturation level at present, it anticipated that only a temporary slump in demand, if any, is likely to occur. This is considered particularly true in the medical office market, which is likely to rebound strongly given the continued growth anticipated in the health services sector of the economy. A similar scenario is true for the residential market, which has also entered what is expected to be a temporary and relatively short-term, slowdown in construction and sales. Both single-family homes and condominium units have done well in the market, with regard to recent sales trends, and could be easily integrated into a mixed-use development alternative for the site. The retail portion of a mixed-use alternative would be expected to be a relatively small component of the site’s overall land uses. Such uses should not be designed to recreate existing retail uses presently found in abundance on the Atlanta Highway and elsewhere in the county, but should be small-scale, neighborhood-sized establishments that might offer some specialty goods or services not currently present, or under supplied, in the area.
The potential development of medical offices as a component of the reuse plan is considered reasonable due to the anticipated growth of the Health Services sector but also because of the Navy School’s proximity to the Athens Regional Medical Center, which is only a few blocks from the site on Prince Avenue. This proximity would make the location very desirable for both doctor’s offices as well as ancillary uses such as medical laboratories and diagnostic centers. There are a number of existing medical office and related uses that presently exist in the immediate area, as well as a planned office park on Sunset Drive, which indicates the desirability and potential value of the site for such uses.
The potential use of the site for education and training purposes is also considered a viable alternative, based on several factors; one of which is the property’s current role as a training facility. Although not the only option with regard to education and training, medical services and related industries are considered a good alternative under this scenario since these fields are expected to be amongst the strongest growth sectors for future employment and business development in the region; a fact that will continue to place pressure on the need for skilled labor. In addition, biotechnology still holds promise to become a larger part of the area’s economic base, but will require investment in education and training, as well as the establishment of suitable research and development sites, in order to promote future expansion in this sector.
There are property tax implications related to potential use of the site by either the public or private sectors. Presently, the property’s use as a government facility results in a tax exempt status and thus, does not generate any local property taxes for the county or school district, as well as the state. Approximately 36% of the county’s tax base is classified as tax-exempt. However, due to relatively strong growth in total taxable property over the past decade, as well as inflationary increases in real estate values, tax rates have remained relatively stable. If the Navy School property is reused for purposes that continue its tax-exempt status (e.g. a governmental or educational use), it will result in essentially a no net change in current property tax levies, based on the direct economic impacts of reusing the site. There is, however, likely to be some negative secondary impacts associated with reuse of the site, such as increases in traffic and other demands for service that are higher than those presently generated by the Navy. It is also possible that some of these negative impacts will be offset by positive impacts that could include such factors as increased wages and spending within the economy, as well as the creation of offsite private sector jobs related to reuse of the facility. These considerations should be fully weighed and evaluated for the various reuse alternatives considered for the property.
Finally, there needs to be recognition of the fact that redevelopment of the Navy School facility could involve a potentially lengthy time schedule that will affect reuse alternatives from a market perspective. At present, the Navy is not expected to vacate the site until 2011 at which time there may an additional two years of site preparation required for infrastructure upgrading and demolition activities. This represents a potential six- to seven-year period between the completion of the reuse plan and actual implementation. Therefore, it is critical that the reuse plan’s components, site design, financing, and potential off-site improvements allow for flexibility and adjustment based on current market conditions.
