, Gloucester, MA

September 11, 2013

City permit gains fueled by turbines

By Marjorie Nesin
Staff Writer

---- — A jump in Gloucester’s building permits proved a revenue source that helped the city scoop up far more than officials had projected in the fiscal year that ended June 30, records show.

But building permits for the wind turbines in Blackburn Industrial Park provided much of the juice for those revenue gains.

Because when the city formed the fiscal year 2013 budget in January 2012, the turbine owners had yet to finalize plans, so city officials excluded any predicted revenue from the project as they formed the budget, the city’s Chief Administrative Officer, Jim Duggan, said Tuesday.

“We were optimistic, but the owner of the turbines, they still had not really moved on anything in regards to solidifying their financing or moving forward with site preparation,” Duggan said Thursday. “We just could not take the chance and put that in, so we just wanted to maintain being conservative.”

Now, 18 months later, excess building permit revenue makes up a $139,000 chunk of the $3 million in unbudgeted “free cash” the city expects to see certified by the state this fall.

But about $1.1 million of that “free cash” is from actual revenues exceeding the budget, while the remainder of the free cash budgeted money that the city never spent. The turbine building permit covers between $75,000 and $90,000 of the excess. The city had budgeted for $412,000 in expected building permit revenues for the fiscal year. Though the permits exceeded that expectation, the mayor has set their building permit revenue prediction at $450,000 for fiscal year 2014. The city raked in the $551,000 in building permits, Duggan says, in part from the one-time wind turbines permit, and from home sales picking up.

“There was an influx with unanticipated building permits being taken out due to the economy recovering,” Duggan said. —Mayor Carolyn Kirk had budgeted projected revenues for building permits in fiscal year 2010 at $400,000, then dropped that number in fiscal year 2011 to $392,900. The projected revenue goal climbed to $412,000 for fiscal year 2012 and remained there in 2013.

The Warren Group, which compiles and tracks real estate sales and trends, saw an influx in home sales in the fiscal year 2013, which ran from July 1, 2012 through June 30 of this year.

Single-family home sales across the state increased in June, climbing to the highest number of sales in three years. And, as people buy homes, many also purchase building permits from the city.

“The housing market continues to boom locally, and nationally,” said Warren Group CEO Timothy M. Warren Jr. “As long as mortgage rates and home prices don’t spike too high, we’ll see a very strong recovery year for the market in 2013.”

Marjorie Nesin can be reached at 978-283-7000, x3451, or at