CHARLESTON, W.Va. - The City of Morgantown should expect thousands of dollars annually in taxes and fees from West Virginia University's anticipated development project in the Sunnyside neighborhood, according to a university official.
WVU has an agreement with two private holding companies to purchase 39 parcels of land in Sunnyside at a cost of roughly $14.5 million, according to a document submitted last month to the Legislature.
The document states the university is pursuing the "public-private venture" to increase student housing opportunities and amenities, which could include coffee shops, a grocery store and an automatic laundry.
Those developments could mean $1.8 million in fees and taxes for Morgantown during the first year of construction, according to a document sent to city officials by Ron Justice, WVU director of Student Organizations Services.
Justice, who also formerly served as the mayor of Morgantown, sent a "Sunnyside Tax & Fee Analysis" to city officials last week. It outlines how much money the city currently receives from fees and taxes on the property in question and projects how much it could make once construction is underway.
"One concern has been that the city not only realize new housing, but also make sure the economic impact on the city is not diminished in any way," Justice's email reads. "The information attached will show that the city will see a substantial annual increase when all revenue streams are compared."
Right now the city collects about $20,000 from real estate and business and occupation taxes, as well as fire service fees, according to the analysis. In the first year of construction, the city should receive one-time business and occupation construction tax revenues in the neighborhood of $1.67 million.
That figure is based on an estimated construction cost "of improvements on project site of $55,712,329," according to the analysis.
Morgantown should also expect more than $100,000 annually in additional tax money from rental agreements and commercial entities on the property.
The analysis estimates the city will receive $50,000 annually in commercial sales business and occupation taxes, based on the projected $5 million gross revenue of the businesses on the project site.
The analysis projects $7.6 million in gross revenues from "student and commercial tenant rentals," of which the city would receive $76,471 in taxes.
Real estate tax revenue projections showed the city receiving $7,800 annually. That figure is based on "commercial space assessed value of $3,423,380."
WVU property purchases have caused concern in the past, said Morgantown Mayor Jim Manilla. When the university buys property, the city generally no longer receives business and occupation tax for those parcels, he said.
That won't be a problem this time because of the project's public-private nature, Manilla said.