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Pequot Lakes Downtown Plan <br /> I.Executive Summary <br /> Like nearly every community in the United States today,Pequot Lakes is struggling to figure out how <br /> to transition to a set of new economic realities.The hyper-growth of the recent past covered up a lot of <br /> the financial imbalances created by the City's development pattern This pattern—typified by horizontal <br /> decentralized growth with a strong auto-orientation—created a lot of long-term liabilities for <br /> infrastructure maintenance that the City will now struggle to meet in a more austere age. <br /> As the City is positioned today,the places where it has the greatest level of public investment—the <br /> downtown and its surrounding neighborhoods—are also the places where private-sector investment has <br /> lagged the most Unless there is a dramatic shift in this imbalance,large amounts of public infrastructure <br /> will need to be abandoned and/or large subsidies from other property owners(predominantly higher- <br /> value lake property owners)will be necessary to meet the City's maintenance obligations. <br /> These are not easy challenges particularly since they call into question the prosperity and growth <br /> the City has experienced over the past two decades.The greatest level of prosperity Pequot Lakes has <br /> experienced came in the years prior to the housing collapse a market correction that began nationwide <br /> in 2008 It is difficult to confront the realization that our local prosperity was not"real"financially.It <br /> would be comforting to believe that the growth and success experienced locally was the result of wise <br /> local decision-making instead of factors beyond the City's control.And it is difficult to acknowledge <br /> today that there is no mix of incentives or local programs that can bring back the conditions of 2005. <br /> In short Pequot Lakes is in a new,evolving reality.It is unclear precisely what the future will bring, <br /> but it is becoming apparent that the City will need to adapt to a new set of local economic realities, <br /> including: <br /> ➢ lower property values We're in the midst of a maior correction in property values that Formatted:Font:Calibri,Bold <br /> appears to be continuing an aggressive downward trend.Since the City's primary revenue Formatted:Left,Bulleted+Level:1 <br /> source is a tax on property values declining values is distressing on many levels. +Aligned at: 0.5"+Tab after: 0"+ <br /> Indent at: 0.75" <br /> ➢ Reduced state and federal support As with most small towns Pequot Lakes has relied on Formatted:Font:calibri,Bold <br /> the state and federal governments to fund and finance maior infrastructure improvements. Formatt=Left, ulleted+Level:1 Of course the state and federal governments have long-term structural financial problems +Aligned +Tab after: o"+that make them unreliable sources of future funding. Maintaining the City's sewer and Indent at <br /> water infrastructure—let alone local roads and streets--without maior state and federal <br /> assistance is currently unthinkable but it is likely to be a reality we have to face. <br /> ➢ private sector indebtedness In recent decades the City has grown used to the private Formatted:Font:calibri,Bold <br /> sector investing large amounts of leveraged funds to develop and subsequently purchase, n1l+ndel'nnt atted:Left,Bulleted+Level:1 <br /> both commercial and residential properties The emerging economic realities of our time ned at: 0.5" +-Tab after: o"+ <br /> at: 0.75" <br /> Pequot Lakes Downtown Plan—Updated June 2011 1 <br /> L <br />