The Suburban-Style McDonald's in Downtown Durham

Whenever I am around the intersection of Rigsbee and W. Morgan, I always look at the McDonald's that sits there and wonder to myself, "Why?"

Why does this suburban-style McDonald's exist in the heart of downtown Durham? Why does the building and all that parking have to take up 1.26 acres of prime land?  Of course, the answer is that it was built at a time when we were laying out our cities for cars. It's located right on the downtown loop, which fits the car-centric model as well.

Still, when I think of downtown McDonald's, I think of something more like this:

Even the smaller, "density allergic" town of Chapel Hill managed to fit their McDonald's on 0.59 acres:

The area around the downtown Durham McDonald's should be way more walkable than it is, but combine the downtown loop with developments like this suburban-style fast food restaurant (both of which have a symbiotic relationship), and you get an area that is not meant for pedestrians. With the vegetative "buffers" around McDonald's, it isn't even easy to cut through the parking lot on foot.

Long time readers will know that I like dabbling in light number crunching (nothing too major). I wanted to compare how "productive" the McDonald's is in terms of generating tax revenue for the city to a nearby block. In this case, I chose a number of smaller parcels (more appropriate in size for a city, in my opinion) on the adjacent block:

For the comparison area, I left out the parcel on the north side of the block (directly across from McDonald's) because this is the city's new parking deck. Below are the numbers:


McDonald's Parcel: 1.26 acres
Comparison Area: 0.94 acres

I was hoping to have the acreage match more closely, but I think the numbers will still tell a compelling story. Next, I went to the county tax records and looked at the assessed value of the McDonald's parcel compared to the assessed value for all of the comparison area parcels put together.

Tax Assessed Value

McDonald's Parcel: $3,943,725
Comparison Area (sum of all parcels): $17,261,022

That is a HUGE difference, with the comparison areas value being assessed at a much higher number, even though it is on a significantly smaller piece of land. How much revenue does that translate into for the city/county via taxes? I used the Durham City/County tax ratio of $1.2439 per $100 of assessed value to find out. Now, I am not 100% sure that every owner in the comparison area pays taxes (nonprofits, governmental owners and a few others are tax exempt), but for comparison sake, I assumed all parcels paid the standard tax rate.

Annual Tax Revenue Generated

McDonald's Parcel: $49,056
Comparison Area (sum of all parcels): $214,710

and because the areas are different sizes, I looked at the per-acre tax revenue as well.

Annual Tax Revenue Generated per Acre

McDonald's Parcel: $38,933
Comparison Area (sum of all parcels): $229,391

What a difference! So, I guess we have a suburban-style fast food restaurant that hurts walkability and generates less revenue for a city that could always use more money to help pay for infrastructure, affordable housing, etc. Maybe if we fix the downtown loop to be a more pedestrian and bike friendly, two-way street, a developer would be willing to buy out the McDonald's (which must not be making as much money as a more intense development would make) and put something better suited to a downtown there. Meanwhile, the investment that the city would have to put in to fix the loop would be paid back every year in increased tax revenue.

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