Here’s the view of Stephen Willson on the proposal for Crystal Lake Library improvements.
Food for thought.
Should We Build a New Library in Crystal Lake?
An open letter to the Crystal Lake City Council
- New library budget is $715 for each additional square foot of space
- Even with grant, library budget will increase by at least 36%
- Does the City Council want to raise property taxes by $115 or more per household?
- What is the tangible benefit? Will patrons borrow 36% more books? If not, what are we paying for?
- Are there cheaper alternatives, even after considering a potential loss of sales taxes?
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Proposed Addition Is Very Costly
Whether to build a new library or not is a question of value, not values.
We all support the library, we just don’t want to pay more than necessary for the services they provide.
Eight years ago, the citizens of Crystal Lake overwhelmingly voted against spending $18.8 million to build a new library.
Now the library board wants to spend $28.6 million, or 50% more than they proposed eight years ago, for an increase in usable space of 40,000 square feet.
$28.6 million divided by 40,000 square feet is $715 for each additional square foot of space!
Yes, it’s 80,000 square feet total, but the relevant number is how much additional space you get.
If you were building a 1,000 square foot addition to your home and the builder said it would cost you $715,000, would you build the addition? Luxury homes on the lake are now selling for $180 per square foot in Crystal Lake. Regular houses are selling for maybe $125 per square foot. Condos are going for $40 to $50 per square foot.
Can the City Council justify spending $715 per square foot for a new library addition?
If a $7 million grant in state tax dollars is obtained, then the City would have to finance $21.6 million.
At 4%, the annual payment on a twenty year bond would be $1.6 million.
The library’s operating budget for FY2012 is $4.4 million, of which $128,000 goes for building maintenance and a surprisingly small $500,000 is for books, videos, and subscriptions.
So a new building would increase the library’s annual budget by at least 36%, probably more because of the increased cost of maintaining a much larger building.
With 14,421 households in Crystal Lake, this is a property tax hike of $115 per family per year.
What Tangible Benefit?
Is it worth it? Is a new library worth $28.6 million? Is it worth 36% more than we’re spending now?
To answer these questions, we need to know what the library actually does.
Not what its goals are or what its mission is, but what it actually does, because if you define and count the outputs, then you can ask the logical question, “Do the increased outputs of a new library justify its cost?”
The library’s main function is to loan books and videos.
Secondarily, it offers pre-school reading programs and serves as a free Internet café.
So the first question to ask is, “For $28.6 million, will people borrow 36% more books and videos from the library?”
Will the library have 36% more books and videos to offer? Will patrons’ wait time for materials (a very small percentage of the library’s total business) be reduced 36%?
If the answer to these questions is, “No,” then a new $28.6 million library is not justified.
And has the Library actually provided any of these figures to the City Council in seeking to justify a new library? The answer to this question, sadly, is also, “No.”
Are There Cheaper Alternatives?
Now, if a new library is too expensive, there may be cheaper alternatives, and this is worth investigating – something the library board failed to do before making their proposal to the City Council.
One alternative would be to build a smaller, much cheaper one-story addition on the site and add just 50 or 60 surface parking spaces.
As it is unclear that a full 80,000 square foot library is needed, a smaller addition should be considered.
One-story commercial space runs about $80 per square foot, and parking spaces run about $2,000 each.
So a one-story 20,000 square foot addition with 50 parking spaces should cost less than $2 million, and would increase space and parking by 50%.
Is it as nice as a huge new library? No.
But would it substantially reduce the current crowded conditions? Yes.
Of course, we don’t know that even an addition of this size is justified without numbers. Doing the same amount of business with 50% more space is actually just being less efficient.
It has been suggested that the library consider buying the old Wal-Mart site or one of the other many vacant sites on Route 14. Advocates for a big new library have argued that the public wants the library to stay in its current location, but this is false because the question was never asked, “Given these two cost scenarios, would you rather have a library on Paddock or
elsewhere?” Once again, the issue is value.
There are positives to using the old Wal-Mart site. Certainly, it would be much cheaper. As noted above, finished single-story commercial space (like the Barnes & Noble, which is functionally identical to a library) costs about $80 per square foot.
At 92,000 square feet, the total budget would be about $7.4 million, with no need for an expensive parking garage and great
accessibility for the handicapped and for mom’s with strollers.
It’s also divisible space, which a new library on Paddock is not. So if, in the future, the library finds it actually needs less space, as more and more of its media become stored electronically and distributed remotely, then it could sell or lease a portion of the space on Route 14.
Can it sell excess space if it builds a one-purpose building on Paddock? No.
Lost Sales Tax
There are also downsides to relocating the library to Route 14. The City hopes someday to have a business in the old Wal-Mart space that produces sales taxes. Now, JCPenny, which owns the site, has annual sales of about $141 per square foot. So we might expect a business there to achieve annual sales of roughly $13 million. With a 1% local sales tax, the City would forego
$130,000 a year in sales taxes. The lost property and sales taxes to the City have a present value of perhaps $2.0 million.
But what about the rest of the sales tax? With a total sales tax rate of 7.75%, that’s over $1 million per year in sales taxes. Aren’t we giving up all those taxes, too? The answer is no, we’re not, because the sales that would have occurred at that site wouldn’t disappear, they’d just move elsewhere, possibly elsewhere in Crystal Lake. So the State and the County would actually lose
no sales taxes.
This all assumes, of course, that we actually lose a business by using the space for a library (an argument, by the way, that can be made for any space the library occupies, including the current location on Paddock). The old Wal-Mart has been vacant for five years now and doesn’t appear to have great prospects. A new library on that site might well jumpstart the area. So $1 million to $2 million in probable foregone taxes should be added to the cost of locating a new library on Route 14.
The Mayor expressed concern about all the children who currently bicycle to the library and how difficult it would be for them to ride a bike down Route 14. Actually, fewer than a dozen people, adults and children, ride a bicycle to the library on a daily basis during the good weather, and zero in winter. While I appreciate the Mayor’s concern, this argument is specious.
Another downside is what to do with the old library. There was some talk of the County wanting a courthouse annex in Crystal Lake, but this appears to be dead. If the space can be put to good use by another local government or a nonprofit, then the value can be subtracted from the cost of using the Wal-Mart or other vacant space on Route 14 for a new library. If not, then eventually the old library would probably be razed and the land sold for residential development, and demolition would probably exceed sale proceeds.
In conclusion, the issue of whether to build a new library and, if so, where, is a question of value to the taxpayers. While the current library is cramped, unless taxpayers obtain tangible value for the higher property taxes that would be required, then a new library is not justified from a public policy perspective. The City Council should consider all alternatives, including no addition, a cheaper one-story addition, and moving to a new location, and weigh the costs versus the tangible benefits before making a decision.