There is no one best way to shutter and redevelop a coal plant. However, some ways are better than others. This chart shows the sweet spot for redevelopment – where private sector interests coincide with community desires. That is where sustainable development can happen.
Highest and Best Use
WHAT DOES “HIGHEST AND BEST USE” MEAN
Highest and best use is a concept used in appraising properties for value. The Appraisal Institute defines highest and best use as follows:
“The reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, financially feasible, and that results in the highest value.”
HIGHEST AND BEST USE FOR YOUR COMMUNITY
There are four key tests for determining highest and best use, which is the basis for a property appraisal. A developer must, at the minimum, determine, if the proposed the use is:
- Physically possible,
- Legally permissible,
- Financially feasible, and
- Maximally productive.
While all proposed uses must be physically possible, legally permissible, and financially feasible, there can be differences of opinion on “maximally productive.” Maximal productive use for a business may not be the same as for a community for reasons of job quality, stability, environment, or other concerns.
A community may value manufacturing or warehousing use, which creates stable jobs with living wages. An artificial intelligence use, on the other hand, may provide higher remuneration to the owner (in other words, the buyer may be willing to pay more because of valuable electric connections) but create far fewer jobs than other uses. A community can express its version of the highest and best use in a community plan derived via a bottom-up community visioning process (See our ReImagine Your Community Visioning Process). Many federal incentives require community support. To get a federal grant, the federal government should require applicants to demonstrate their proposed project helps to implement what the community has already indicated it desires, as stated in its community visioning plan.
FACTORS TO CONSIDER
Factors to be considered in visioning what a community wants and needs – and/or does not want – may include:
- Will the use be sustainable (or, will it depend on resource extraction, which, like coal, ends when the resource is exhausted)?
- Will the use be a factory whose headquarters could quickly move production to a different location or nation?
- Will the use create good union jobs equivalent to those lost at the coal power plant?
- Will the use rely on materials and production inputs that are sustainable over time and appropriate for the region in that they are not likely to run out? Are materials suitable for circular manufacturing?
- Is the use climate-friendly and likely to contribute to the new clean economy?
- Will the use receive substantial federal support?
- Is the use likely to serve local businesses or purchase products and services from them?
- Are there safety concerns with the proposed use?