Surviving The Times

Payson's economy remains steady

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While the national economy began winding down in early 2001, figures from Town Hall suggest that Payson merchants held their own in 2000.

"Sales tax revenue for the year 2000 was $4,831,639," Payson's Chief Fiscal Officer Glenn Smith said. "That's up 5.91 percent over the previous year."

While the increase doesn't signify a booming economy, it's better than the alternative, he said.

Payson's record year for sales-tax growth was 1997, Smith said. During that calendar year, Payson's sales tax increased 22.65 percent over the previous year. In 1996, sales tax figures fell 2.19 percent.

The town's sales tax collections peaked in 1997, and has since increased 6 to 8 percent a year. "The gain between the years is about on target," Smith said.

Housing trends

When it comes to gauging community growth, Community Development Director Bob Gould said one of his best tools is housing-start statistics.

"The year 2000, we had 243 housing starts, which is down just slightly from the previous year," Gould said. "But it's also a few more starts than we had in 1998, which would seem to indicate that our housing industry is steady."

The town had 281 housing starts in 1999 and 235 in 1998.

If housing starts are a lead indicator of a strong economy, then Payson peaked in 1997, when construction crews broke ground on a record 390 homes.

"Traditionally, we always stick with anywhere from 60 to 70 manufactured housing starts a year," Gould said. "Last year, it dipped to 44 units."

And when you look at apartments, condominiums and townhouses, Gould said, the numbers are all over the map.

"We had 16 in 1996; then 69 in 1997," he said. "We had none in 1998, then 12 in 1999. Last year, there were seven multi-family projects started."

The Arizona Department of Economic Security is predicting a slower economy for 2001, Gould said, but it's also projecting a slight increase for 2002.

Market forces

Nevertheless, Gould said, his colleagues around northern Arizona are reporting growth rates that are slower than Payson's.

"They don't have the number of building starts that we have," he said. Gould said he recently sat down with building officials from Sedona, Cottonwood and Clarkdale all of whom reported economies that are more sluggish than the Rim country's.

Regardless of the national economy, the one local factor that continues to keep Payson's growth in check is the town's impact fees. Gould said that of the communities he regularly keeps tabs on, Payson is the only one that charges impact fees.

Those figures show that the impact fees collected by the town haven't increased dramatically over previous years. The reason, according to Jill Morgan, president of the Central Arizona Board of Realtors, is that people who want to buy a home in Payson are shopping for existing homes. Four or five years ago, she said, the typical buyer was looking for an empty lot for either a site-built home or a manufactured home.

According to figures from the Central Arizona Board of Realtors, 113 real estate transactions for homes, businesses and land took place during the first quarter of 2000. The first quarter of 2001, there were only 90 sales.

But while there was a slight decline in first-quarter sales, Morgan said, the overall real estate market remains steady.

"Business seems to be strong, at least in our office and for myself," Morgan, an agent at Coldwell Banker Bishop Realty," said. "Personally, I thought the drop in interest rates would spark more business than it has, but we've been keeping busy."

According to town figures, impact fees added more than $1 million to town coffers. Of that, nearly $800,000 was for water development fees, more than double the amount collected the year before. The reason water impact fees doubled while the other fees remined level, said Public Works Director Buzz Walker, is that commercial development is exempt from paying fees for parks and streets.

Payson's impact fees also may explain why more and more customers are looking farther east for property.

"I'm getting several people who want to see properties in the Heber/Overgaard area," Morgan said. "You definitely get more for your buck up there, and people don't seem to mind driving an extra 50 minutes to get home. All in all, though, I think the Payson market is doing well."

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