Property sales boom results in tax windfall

By Meg Olson

The highlight of the city of Blaine’s year-end financial report is evidence of a run on Blaine real estate. It started with a bang in 2003, when the city’s income from real estate excise tax doubled, and kept rolling through 2004, when city finance director Meredith Riley reported another 34 percent jump.

“It’s going up significantly,” Riley said. “There are a lot of transactions happening within the city limits. More property sales are happening right downtown now than there ever has been.”

Veteran local realtor Joyce Vanderpol says she has seen property values, especially for building lots and downtown properties, go through the roof. “You just can’t find lots anymore,” she said. “Everything has increased in value so terribly high and I don’t like it because it doesn’t present a picture of what properties are really worth.”

Like it or not, Vanderpol said a lot on one of the cul-de-sacs up H Street sold for $24,000 last year, while this year a similar property sold for $70,000. “It’s about scarcity,” she said. “Not only in Blaine but throughout the county.”

Vanderpol said prices for raw land in downtown Blaine have also close to doubled in the last year. “Developers have found Blaine and I think that’s great,” she said. The resulting scramble for land, especially waterfront along Peace Portal Drive, is driving up prices and a property that listed in 2003 for $154,000 sold for $225,000 in 2004.
Vanderpol thinks Blaine doesn’t have enough raw land left to sustain the boom for long. “It’s going to simmer down as we run out of lots,” she said.

Higher real estate excise tax may be a signal of a surge in interest in Blaine properties, but it also means more funding for projects to make Blaine look good. The city collects half a percent on real estate sales and can use the money for capital improvement projects. Currently the funds are paying off a 1994 city hall remodel and the reconstruction of Peace Portal Drive.