I haven’t a clue as to what possessed John Ellenberger to write the article in the June 26, 2015 edition of
titled “The Data Scientist: Does Lost Lake Pay 40 percent more in taxes?” Not only is his database off base but his “scientific” approach has no basis in reality.
What Mr. Ellenberger apparently fails to understand is that in 2008, the Town increased the assessed value of waterfront land on Lost lake and Knops Pond by 40 percent as a result of market data that indicated that that about six waterfront properties had sold at prices higher than their assessed value. The assessed value of buildings on waterfront land was not increased, nor was the assessed value of land that is across the street from Lost Lake or Knops Pond increased. The result was that a piece of waterfront land on the lake that had been assessed for example at $100,000 in 2007 was reassessed in 2008 at $140,000 while a similar piece of land across the street from the lake, but not on the waterfront, that had been assessed at $100,000 was still assessed at $100,000. Thus the assessed value, and resulting taxes, for waterfront land on Lost Lake & Knops Pond were increased by 40 percent. These changes created major concerns for waterfront land owners that were covered extensively in 2008 by the Lowell Sun, the Groton Landmark, The Boston Globe and Talk About Groton. As reported in the Lowell Sun in January of 2008 (http://www.lowellsun.com/front/ci_7932720), the assessment on a lake front house on Highland Road on Lost Lake increased by 53 percent virtually overnight, and the resulting tax bill went from $3,600 in 2007 to $5,400 in 2008. This house has been owned by the same family for over 80 years.
Now let’s look at three waterfront houses on Knops Pond that are side by side. The first house is 2,087 square foot house is assessed at $320,900 and the 0.28 acre (12,000 square feet) waterfront lot is assessed at $194,700 for a total of $515,600. The Town of Groton, using an algorithm that is called a “land curve”, assesses this waterfront land at $16.23 per square foot. The second house is a 600 square foot year-round house next door to the South of the first house, is assessed at $46,300 and the 0.34 acre (14,600 square feet) waterfront lot is assessed at $206,700 for a total of $253,000. The Town of Groton, again using a “land curve”, assesses this waterfront land at $14.16 per square foot. The third house is a 648 square foot non-winterized unheated summer camp next door to the North of the first house, is assessed at $19,900 and the 0.30 acre (12,800 square feet) lot is assessed at $200,000 for a total of $219,900. The Town of Groton, again using a “land curve”, assesses this waterfront land at $15.62 per square foot. However, the house across the street from these three houses, which is not on the waterfront, is on 0.48 acres (i.e., 20,909 square feet) of non-waterfront land that is assessed at only $150,300 or $7.19 per square foot as compared to the “summer camp’s” 0.30 acres of waterfront land that is assessed at $200,000 or $15.62 per square foot. In this case, the waterfront land is assessed on a square foot basis and more than twice that of the non-waterfront land across the street. These differences in land assessments for waterfront land verses non-waterfront land are true all around Lost Lake and Knops Pond.
Mr. Ellenberger uses Nashua Road in his analysis. Since he happens to live on Nashua Road, let’s compare the assessments on Lost Lake and Knops Pond to the assessments for Mr. Ellenberger’s own house and land. His 1,894 square foot house is assessed at $136,100 and his 3.05 acre (132,422 square feet) lot is assessed at $177,600 for a total of $313,700. The Town of Groton, again using a “land curve”, assesses his non-waterfront land at $2.10 per square foot for the first 80,000 square feet and $0.18 per square foot for the remaining 53,422 square feet for an average assessment of $1.34 per square foot of land while the three houses on Knops Pond are assessed at an average of $15.06 per square foot of waterfront land. In short, Mr. Ellenberger’s large non-waterfront land is assessed at less than 9 percent, on a square foot basis, of the small waterfront lots around Lost Lake and Knops Pond!
I must question Mr. Ellenberger’s choice of Birchwood Avenue and Pine Trial for providing representative data for his analysis of Lost Lake. There are eighteen properties on Birchwood Avenue, eleven of which have homes on them. There are only a five homes on Birchwood Avenue that are on the waterfront and there are no houses on Pine Trail that are on the waterfront. And if you compare the land assessments for the houses on the waterfront on Birchwood Avenue versus those that are not on the water, you will see the same results that I described above: waterfront owners are assessed more and pay significantly more in taxes for their land. In addition, his analysis leaves out the approximately 150 houses on the waterfront of Lost Lake and Knops Pond. I would suggest that Mr. Ellenberger use the homes on both sides of Whiley Road in his comparison since these are also in what he refers to as “in Lost Lake”, whatever that means since there is no official neighborhood called Lost Lake — there is only a lake and its waterfront residents. If he were to include Whiley Road in his data he will find a combination of million dollar homes on large lots and smaller homes on tiny lots and the land on the waterfront are assessed significantly higher than the land that is not. His average value would be in excess of any of the other areas they he covered in Groton.
Thus, based on facts and data, it is painfully obvious that those of us who live on the waterfront of Lost Lake and Knops Pond pay much more than an additional 40 percent in taxes for their properties as compared to those with similar sized homes on large lots who don’t live on the waterfront. And this is driven by the fact that waterfront land is assessed far above non-waterfront land.
So the answer to the question that he poses in the title of his article is yes, Lost Lake does pay 40 percent more in taxes for similar sized homes in other areas of Groton! In fact, the assessed value of waterfront land around Lost Lake and Knops Pond are no longer marked up by 40 percent, they are now marked up by 45 percent!
As a final note, in 2012, I did an extensive analysis on a lot by lot basis on what the incremental tax revenue was based on the 40 percent increase in assessments of waterfront property on Lost Lake and Knops Pond. The answer was that as of 2102, the land owners of the waterfront property on Lost Lake and Knops Pond were paying an additional ~$170,000 per year in increased taxes. This equates to additional tax revenue to the Town of Groton since 2008 of more than $1.4 million.