An Assessment of Urban Values and Residential Properties Utilizing GIS in Rochester, Minnesota

Aaron J. Buffington1,2 1Resource Analysis Department, Saint Mary’s University, Winona, MN 55987 2Rochester/Olmsted Planning Department, Rochester, MN 55904

Keywords: urban , residential property, property value, geographic information systems, and spatial correlation

Abstract

Urban parks and open space have always been a valuable asset to human communities. They are multi-faceted in the kind of value that they have provided to local communities. For this reason, parks and open space have been given much attention during the planning processes in the urban environment. Urban parks have not only provided recreation benefits to communities, but have provided much economic wealth to local communities. Community residents have noted the benefits of urban parks. In many urban environments, residential property values have increased near parks as a direct result. The of Rochester, Minnesota has been acknowledged as having a very strong urban park system. The city’s several ravines, rivers and woodland areas have provided natural corridors for the development of its park system. A strong economy in Rochester has resulted in continuous urban growth. Along with the city’s growth, the downtown and residential areas are now becoming more urbanized. Rochester has also been noted for its stable property and housing prices. City property is in demand, and will continue to be in great demand for years to come. As Rochester expands, its parks system needs to be considered during the urban planning processes to protect the high sense of residential value that Rochester is known for today. This study takes a look at the values that Rochester’s urban parks are given by the local communities, and more specifically, the correlation between the urban parks and residential property value. A Geographic Information System (GIS) was implemented to show direct patterns and correlations between the city park system and residential property values.

Introduction this era believed that the quality of the physical and visual environment had a Parks have been important in the urban profound impact on the morals, lifestyles planning processes throughout the and views of the urban communities nineteenth and twentieth centuries. In (Whyte, 1970). This view within urban our history, humans placed values on planning expanded in popularity favored possessions. In the nineteenth throughout the start of the early century, aesthetic values relating to the twentieth century. This aesthetic visual properties greatly influenced movement is sometimes referred to as urban planning decisions. Planners of the City Beautiful movement (Whyte,

- 1 - 1970). This movement is responsible for include Essex, Silver Lake, Elton Hills producing many of the parks in urban and Foster Arend. Other parks within areas today. Examples of the City Rochester provide unique amenities, Beautiful movement can especially be including the Quarry Hill Nature Center, seen in most of the older on the Olin Bird Sanctuary and the Plummer East Coast of the . New . Rochester’s parks provide a York City is a prime example. The City wide array of activities for many levels Beautiful movement can also be seen in and types of users. For the size of the other areas of the United States, city, Rochester provides an excellent including Minnesota. Minneapolis has park system. been noted for their prime parks Placing value on land and space surrounding the lakes of the southern within a city is an essential part of urban regions of the city. These parks have planning. Placing values is important in great value and are well appreciated by urban planning because it shows thousands of users every year. Activities community support (Johnson, 1989). An are abundant throughout the year in example, if a community places high these parks. Residential properties value on increasing its economy, the surrounding these parks are extremely community may promote and support desired. Housing surrounding these industrial and/or other business growth parks is often quite extravagant and within the community. Community expensive. Other cities in Minnesota residents can show support for urban have seen similar residential parks in the same fashion. Those appreciation given towards parks communities that place high value on surrounding their urban park . their park systems will often display and The appreciation of the public is promote their parks with economic often referred to as “social value”. Eight support (Nat. Park Service, 1995). For key factors are deemed to be important this reason, parks and the general for social value (Whyte, 1970). These welfare of a city can often be related. If key factors include , a community is growing economically, residential quality, historic value, then that community may provide a fine agricultural value, recreation value, park system. wildlife value, water value, and soil Parks in an urbanized resistance to erosion (Whyte, 1970). environment also provide people with a Local planners have cited Rochester’s feeling of place and identity. Parks parks and communities as possessing provide space for the public because the most of these key factors that provide government owns them. Parks also can social values. instill pride for a community or city, and Rochester’s city parks are quite often give a city an identity (Nat. Park diverse. The city provides regional, Service, 1995). in New community and residential parks alike. York City is well recognized, and gives Some of Rochester’s parks provide the city a unique character. Rochester is many of the typical amenities that are also known for its beautiful downtown found in city parks. These amenities park system, but at a much smaller scale. include , baseball and Visitors to the area often notice the city softball fields, tennis courts and open park system immediately. In 1998, space. Parks included in this category Money Magazine ranked Rochester as

- 2 - being the number one-rated small city in Park users show the social values America, partially due to its standard of that they put on local parks, and what living (Money Magazine, 1998). Indeed, those parks bring to the standard of part of Rochester’s character and living through their support. People and standard of living can be seen through its society put high values toward parks that city park system. offer them satisfaction. They feel that a City parks can provide many jog in the park, a tennis match with a opportunities to a community. Not only friend, and a neighborhood softball game have urban parks provided a retreat from are all appreciated, and see these park the noise and bustle of traffic and amenities as factors that improve and crowds, they have also provided a stage strengthen one’s standard of living. Al for a whole range of social activities. Gore, the Vice-President of the United Parks can often contribute to the safety, States, wrote about parks and stability and vitality of the surrounding community life, stating that, “we neighborhood. However, it is important (society) care about this place, and value to note that it is the people and activities the quality of life. Parks bring balance in a park which contribute to a park’s to our post-industrial, sped-up lives” positive impact on the community. (Gore, 1998). Urban parks often provide Parks have had an effect on excellent areas for the public to residential neighborhoods due to the socialize. They often provide a place for many opportunities that they provide. enjoyment, recreation, relaxation, family Past studies have shown in fact that affairs, socialization, communication parks do have a positive effect on areas, and a place for gatherings (Nat. residential property. A study of property Park Service, 1995). Urban parks also surrounding four main parks in provide aesthetic beauty and natural Worcester, Massachusetts showed that a resource protection. house located adjacent to a park sold for Urban parks offer much to $2,675 more than a similar house located everyone. Many types of people 2,000 feet away (Nat. Park Service, frequent parks, including developers, 1995). A similar study in Columbus, property owners, children, businesses, Ohio showed that homes that faced a students, government officials, park sold for between seven and twenty- homeless, the elderly and children. three percent more than homes one block However, parks must be properly away from a park (Nat. Park Service, planned and maintained in order for 1995). them to be successful. If a park is not Although many studies show the properly planned, it can often bring positive economic impacts of parks, negative factors into the area. Negative some studies have shown that parks can factors often associated with poorly have negative influences on adjacent planned urban parks include crime, noise properties as well (Lyon, 1972). Lyon and congestion. Poorly planned parks showed this in particular study (Figure can also limit certain types of people 1). from accessing the park such as the elderly or children.

- 3 - residential properties not within close proximity of parks. Although Mr. Garris believes that other factors may influence an increase in property values (such as proximity to elementary schools), he believes that a property’s proximity to urban parks is the key to resale. Other real estate experts, such as Mike Nigbur of the Public Works Department, states that only select areas of the city show a correlation between residential property values and the city’s park system. He feels that for the majority, most of the city parks often give a negative impact on communities (Nigbur, 1999). He sees Figure 1. Lyon’s Curve for Negative Property parks as being community disturbances Values. that often bring noise, traffic and foul activities closer to the residential Lyon’s upper graph shows the communities. He sites the Watson increase in property values due to the Sports Complex as an example of proximity to a park. The bottom graph negative impact. He also feels that many is the effect on property values due to a residents within the city limits of highly developed and used park. This Rochester do not value the urban parks bottom graph shows that properties as highly as residents living in other closer to parks that have negative factors cities. Nigbur feels that Rochester can depreciate in value because of their residents can easily leave the city to proximity to the park. enjoy more rural parks with little time or Local real estate professionals effort. have noted the City of Rochester’s park system as having direct effects on Methods residential properties surrounding the city’s park system. However, real estate Data Collection experts disagree about the impacts that parks have on communities in the City Data were obtained from the City of of Rochester. While they do recognize Rochester Parks and Recreation that parks effect the local communities, Department, Public Works Department they disagree on the type of impact that and the Rochester/Olmsted County parks actually have on local Planning Department. These sources communities. According to Ed Garris, a provided a comprehensive collection of Certified Residential Specialist (CRS), information pertinent to the City of parks do have a positive effect on Rochester’s urban planning issues. residential property values (Garris, Specific coveragages included a city 1999). He has seen residential parcel coverage, municipal coverage, properties that are within three blocks of street coverage and river coverage. All specific parks appreciate in value of coverages were shapefile formats for use three to five percent annually, compared in ArcView GIS 3.0a. All coverages to a one to two percent increase for

- 4 - were already projected in the State Plane Important information was also collected projection, North American Datum 27. from interviews with local and regional experts in this area of study. Interviews Creation of Coverages were conducted with a) Mike Nigbur, a real estate expert for the Public Works Several city coverages needed to be Department in Rochester, b) Jeff Morton created for this study. Specifically, the of the Parks Department of Rochester, c) Rochester parks coverage was created Jan Chezick of the Planning Department since one was not already available. of Rochester, d) Jonathon Vlaming, a This coverage was created (using recreation and parks expert from the ArcView 3.0a) by selecting the Metropolitan Council in St. Paul, MN, appropriate parcels which were listed as and e) Laurie Young of the Minnesota being park ownership from the city Department of Natural Resources, parcel coverage. Selected parcels were and Waterways Division. then merged into separate items to create an individual park using the Merge City Tour command of the Xtools Extension in ArcView 3.0a. All parks were then A visual tour was performed in the City combined into one coverage. All of Rochester as a means for schools within the City of Rochester familiarization of the current park were also included in this newly created layout. The tour provided an coverage since the Rochester Parks opportunity to develop a personal Department currently maintains school understanding of the City of Rochester’s properties. A database was also created unique park system. The tour provided for this coverage to show the specific an understanding of the natural features, names and GIS identification numbers types of parks and residential property for each individual park or school. types within the city. Also, special Boundaries were double-checked using a consideration was given to those 1994 original city parcel map that was residential properties that were for sale. obtained from the city. Knowledgeable Some properties located close to parks Park Department personnel then verified advertised their close relation to the park park boundaries. Other databases were system. then collected containing demographic With the data available for this information about individual parcels. study, it was determined that the main These were readily available from the two factors providing the most value for Rochester/Olmsted Planning this type of correlation included Department. These databases proved to value and actual property values. be essential to this study because they provided key information about each Methods for Building Value Analysis individual city parcel, including a GIS identification number, parcel type For the majority of the study, a visual (single families, multi-family, etc.), analysis displaying property value building value and land value. provided enough accurate information using ArcView 3.0a. First, building Interviews values were classified to show a ranking of their values within the city. Values

- 5 - were categorized using fifteen classes to Further conclusions visually analyzed show a gradual change in the data for property values using fifteen separate building values. classes to show more gradual changes in Next, residential parcels adjacent the data. to the park system were compared to all To gather more specific analysis other residential parcels within the city. for property value, parcels directly To compare these parcels, a 75-foot surrounding the parks were subset from buffer was created around each other parcels within the city. Again, a individual park to gather the 1,884 75-foot buffer was used to select those parcels of residential property. All parcels directly surrounding the park parcels falling within the 75-foot buffer system. A random sample of the same were then calculated to find the number of parcels (1,884) was then statistical mean for all building values. collected for parcels outside of the 75- These parcels were then compared to foot buffer to avoid any biases in other parcels that did not fall within the selecting parcels for this sample. The 75-foot buffer surrounding the parks by two samples were then compared to one comparing the statistical mean of the two another by comparing the statistical data sets. It is important to note that the mean of the two data sets. same number of parcels falling outside of the 75-foot buffer (1,884) were Additional Analysis Using Pearson compared to those parcels falling within Correlation Models the 75-foot buffer to create equal sample sizes. A random sample was used to The distance to the nearest park was collect the 1,884 parcels falling outside determined for all residential properties of the 75-foot buffer to avoid any biases in Rochester using the Nearest Feature in selecting the parcels for this sample. script (created by Timothy J. Fox) in ArcView 3.0a. Distance to the edge of Methods for Property Value Analysis all parks was collected for all residential parcels to see if any correlation actually To find property values, land property existed between the individual parcels values (minus the building value) were and the distance to the park system. divided by the area of each parcel This distance value was then statistically individually. This gave a property price correlated with property values and per square foot value for each individual building values individually with a two- residential property. The following tailed bivariate Pearson Correlation formula sums up this calculation: Model using SPSS software. With the Pearson Correlation Model, a numeric (Land values - Bldg. values) / Area of Indiv. Parcels value above zero would suggest that This value could now be used to positive correlation exists between the compare all parcels equally by two data variables; distance and building eliminating parcel size discrepancies. values or property values for this study Once this value was determined, values (Zar, 1996) A numeric number below were classified to show rankings for zero would suggest that negative property values using ArcView 3.0a. correlation exists between the two data Again original methods classified variables. property values into five classes.

- 6 - Six correlation models were was then used to select the equal number conducted in this study. Originally, two of parcels (8,434) falling outside of the Pearson Correlation Models were one-eighth mile buffer. Again, a conducted to determine if correlation Pearson Correlation Model was existed between distance and property conducted to show the correlation value and building value on all between distance and property values for residential parcels within the city. These parcels falling outside of the buffer. two correlation models were equally Conducting correlation models with the compared to one another by using the same number of parcels eliminated any same number of parcels (8,434) for each biases that could have resulted with data set. Again, a random sample was uneven data sets. used to collect equal sized data sets. Results from this model could be Results biased due to the large area being covered during this analysis. To avoid Data Discrepancies this discrepancy, a one-eighth mile buffer was created around all city parks It is important to note that the parcel to further compare building values and databases collected for this study were distance. Residential parcels falling not completely evaluated. Data were within the one-eighth mile buffer were looked at in a citywide collection to then subsetted, and a correlation model observe general spatial patterns for was then performed. A random sample property value. Therefore, results will was then used to select the equal number not provide specific statistical analysis of parcels (8,434) falling outside of the for each individual parcel within one-eighth mile buffer. Again, a Rochester. The coverages obtained for Pearson Correlation Model was this project are being used to provide conducted to show the correlation only general information for further park between distance and building values for planning purposes. Also, since this parcels falling outside of the buffer. By study was specifically directed at those conducting correlation models with the parcels that lie within the City of same number of parcels respectively, the Rochester, those parcels that fall close studies eliminated any biases that could to, but are outside of the city limits have have resulted with uneven data sets. not been used for spatial correlation A one-eighth mile buffer was analysis. also created around all city parks to further compare property values and Overview distance. Residential parcels falling within the one-eighth mile buffer were Using the digital city parcel map then subsetted, and a correlation model produced by the Planning Department, it was then performed. A random sample was determined that the city has 28,813 parcels comprising of 907,266,037.6 sq. percent of the total area within feet. Residential properties make up Rochester. 22,126 (76.8%) of the total parcels Rochester is comprised of 74 within the City of Rochester. However, parks that are spread throughout the this number is quite offsetting, since entire city (Figure 2). 1,284 residential residential properties make up only 27.3 properties fall directly adjacent to

- 7 - Rochester’s park system. Adjacent

parks to an individual parcel. Interviews with local real estate experts and planners gathered mixed results about the importance of urban parks when considering residential property values. However, most of their results pointed in the direction that parks didn’t have much residential parcels make up only importance regarding residential 25,035,883.9 sq. feet, or 10.1 percent of property values. To further the the city’s parcels (Figure 3). conclusion given by real estate experts, a Geographic Information System (GIS) Figure 3. Location of residential properties in Rochester, shown in black. was used to show that very few correlation patterns do exist between the Spatial analysis city park system and residential property values within the City of Rochester. The main question that was asked during For the majority of this study, the this study was if there was any visual analysis provided enough accurate correlation between the residential information. The visual analysis did not property values and the urban parks show significant higher building values within the City of Rochester. This near the park system. In fact, building correlation was found to be rather values were quite scattered. Although difficult because many other factors fall some high and low pockets did exist into play when determining residential within the city, these pockets showed property values. Other factors that have little correlation between the park been suggested in determining property system and building values. Parcels values have included location of schools, located directly adjacent to many parks transportation routes and the age of also showed quite sporadic values properties within a specific community. (Figure 3). This study tried to eliminate all other factors by focusing on the distance from

- 8 - falling within the buffer had a higher (statistical) mean building value compared to the building value of parcels falling outside of the buffer (Table 1). This analysis did show higher building values given for parcels lying adjacent to the park system. However, further analysis determined little correlation.

Table 1. Summary of Building Values in Rochester in Correlation to Parks.

Building Values of Residential Building Property Parcels Price Parcels within 75 feet of a park $80,994 Figure 3. Sporadic building values. Higher Parcels outside of the 75 foot buffer $69,338 building values are shown with darker colors Difference $11,656 around Northern Hills Park.

The visual analysis showed that Other analysis looked at actual townhomes had the highest building and property values. Again, a visual analysis property values. This skewed the data determined that property values were not too much during the classification consistently larger near or surrounding analysis. This result classified all other the city parks. In fact, some parks residential properties being classified actually appeared to reduce property much lower than they should. To avoid value. In some cases, parcels with high this problem, all townhomes were then and low values respectively appeared eliminated to show all other residential next to one another, regardless of the type parcels for further analysis. distance from a particular park. A visual Another visual analysis, one without analysis did show pockets where high townhomes, showed the true and low values existed. However, the classification scheme for residential relation to the parks system did not seem properties. This analysis now showed a to influence these pockets of value for more gradual change in value residential properties. In many cases, classifications. However, the visual properties directly abutting a park often analysis still gave similar results. had very mixed property value. Next, parcels adjacent to the park To gather more specific analysis system were compared to all other for property value, parcels directly parcels within the city using a 75-foot surrounding the parks were compared to buffer. Parcels falling within the 75-foot the other parcels within the city using a buffer were then calculated to find the 75-foot buffer. The statistical mean for statistical mean for all building values. the two samples were then compared to These parcels were then compared to one another. This assessment showed other parcels that did not fall within the different results than the building value 75-foot buffer surrounding the parks. analysis previously discussed. Results The results comparing the statistical found the statistical mean of those mean showed that residential properties

- 9 - parcels that were adjacent to the park eighth mile buffer and also for those system to be slightly lower than those falling outside of the one-eighth mile parcels that did not fall within the 75- buffer. In fact, a negative value of – foot buffer (Table 2). This assessment 0.044 existed for parcels falling within could suggest that a negative correlation the one-eighth mile buffer, while the exists between residential property and correlation analysis on samples falling the park system for parcels located near outside of the buffer was –0.40 (Table the park system. 3). Similar results were determined Table 2. Mean Values of Residential Properties for the correlation models comparing in Rochester. property values and distance. A negative value of –0.069 existed for Mean Values of Residential Value of Property Parcels Land/Sq. parcels falling within the one-eighth Foot mile buffer, while the same analysis of Parcels within 75 feet of a park $1.88311 samples outside of the buffer showed Parcels outside of the 75 foot buffer $1.93965 –0.124 (Table 3). Difference: $0.05654 Table 3. Pearson Correlation Models Determining Correlation factors Next, distance was statistically correlated with property values and Building Property building values individually with a two- Values Values tailed bivariate Pearson Correlation Model using the SPSS software. The All residential parcels within - 0.044 - 0.124 Pearson Correlation Models determined Rochester that correlation does not exist for either Residential property values or building values parcels within 1/8 - 0.044 - 0.069 (Table 3). Pearson Correlation Models mile buffer were first conducted for property values Residential and building values on all parcels within parcels outside of - 0.040 - 0.142 1/8 mile buffer the city. A negative correlation value of -0.044 for building values and distance Discussion indicated that individual building values and the distance to a nearest park Originally it was believed that property represents a slight negative correlation. and building values would be much Also, a negative value of -0.124 higher for parcels directly surrounding indicated that no correlation existed and adjacent to the park system, similar between property values and distance to the patterns of residential values either (Table 3). surrounding many lakes today. Next, a one-eighth mile buffer Although the parks do provide many of was created around all city parks to the key factors leading to strong social further compare building values and values, the parks in Rochester do not distance. Parcels within the buffer were give positive correlation to property or compared to those parcels falling outside building values. of the one-eighth mile buffer. The Several reasons may contribute results showed negative correlation for to the lack of correlation patterns both the parcels falling within the one- between property values and urban parks

- 10 - within the City of Rochester. First, parks. However, property values only although Rochester is the main city show importance for those residents who within the area, it does not possess any have the income to live near more suburban cities on its peripherals. desirable locations, such as being closer Therefore, the City of Rochester has not to a park. This assumption means that been in great demand of land located residents who cannot afford to buy near the center of the city. “Prime” real property in more desired locations are estate for residential growth has been not given the same attention in this shifted to the edges of the city. Growth study. A further study could possibly be patterns show that Rochester is conducted to show the percentage of a expanding outward. Less focus is given person’s income in which they pay for for redevelopment of inner-city areas. placement of their residential property A second reason that residential locations. Although people with less property is not valuable around parks in money probably do not value parks any Rochester is due to the city’s ease of less, this study does show that people are access to the rural communities willing to pay more to live in higher surrounding the city. If a resident has valued areas. access to any means of transportation, Another future study could also that person can easily escape the city include the use of a public survey. A limits quickly. Without any suburbs public survey of residents could provide surrounding Rochester, residents often an excellent backup to the findings in find extremely rural, natural areas within this study. Information gathered in a ten minute drive time of any part of the future survey could provide insight to city. Residents feel that they can escape local planners regarding the public the urban environment fairly quickly, so perception of Rochester’s park system. parks within the city limits do not Also, public input could determine provide that sense of “escape” that can residential social values, which would be seen in other urban areas. provide models for community growth. Third, residents feel that the parks do not bring much benefit to their The potential for use properties, even if their properties are located near parks. Rochester residents The GIS model was effective for this often see the negative attributes of local study. It is important to note that parks. They see the crowds and late although few patterns were discovered night activities as being a nuisance, and near parks using a GIS, it is the “non- do not want their personal properties to pattern” discovery by the GIS that be located near these activities. provided the beneficial information. Placing value on public land is This study’s original hypothesis was to very subjective. This procedure can be prove that a specific correlation existed extremely biased if the researcher and between urban parks and residential the public alike have personal opinions property values in the City of Rochester. regarding public open space. This study A GIS proved this hypothesis wrong. was intended to be neutral; however, it This study does show that although the was biased because it assumed that City of Rochester has an impressive residential property directly influences urban park system, local residents do not all of the public’s social values towards

- 11 - place significant values towards parks in appreciation goes to the Resource locating their own properties. Analysis Program at Saint Mary’s This information can be used in University of Minnesota for lab usage. several ways. First, city and park planners can realize parks may need to References be improved to provide more adequate satisfaction of local residents. Specific Berry, Joseph K. Dec., 1998. “How Do activities could also be changed to You Measure Spatial Dependency?”. strengthen the residential satisfaction of GeoWorld. Vol. 11 No. 12, pp. 106. the local park system. Planners can also Chezick, Jan. Interview. 25 Jan 1999. use this information in a local recreation Garris, Ed. Interview. 20 Jan 1999. plan, in hopes to improve the Gore, Al. 2 Sept., 1998. Remarks by conceptions of the park system by the Vice President Al Gore. Brookings public. Institution. Also, neighborhood safety Johnson, William C. 1989. The Politics groups can use this information to see of Urban Planning. New York: exactly where the least desirable parks Paragon House, pp. 272. are located (according to local residents) Levy, John M. 1988. Contemporary within the city. Neighborhood safety Urban Planning. Englewood Cliffs, groups could also use this information to New Jersey: Prentice Hall, 332 pp. campaign for more usage of the parks by Mazour, Leonard P. 1988. “Converted local residents and neighbors living Railroad Trails: The Impact on close to particular surrounding parks. Adjacent Property” A Master’s The GIS showed potential for use Thesis. , KS: Kansas State for long-term planning activities and the University, Department of everyday decision processes of those . affiliated with city planning processes. I Minnesota Department of Natural was able to use the GIS to show general Resources, Trails and Waterways property value patterns that may not Division. July, 1996. Benefits of have been produced without the use of Trails. Cooperative one. Demographic data should be Development Series. St. Paul, MN. continuously sought after by local National Park Service. 1995. Economic planners in Rochester to produce similar Impacts of Protecting Rivers, Trails studies in the future. However, accurate and Corridors. Fourth and current data are very important. Past Edition. property data should be saved by the city Nigbur, Mike, with Jeff Morton. for future studies that may deal with Interview. 25 Jan 1999. change of property information over Vlaming, Jonathan. Interview. 9 March time. 1999. Whyte, William H. 1970. The Last Acknowledgements Landscape. New York: Double Day and Company, Inc, 428 pp. I would like to thank the City of Young, Laurie. Interview. 9 February, Rochester Parks Department and 1999. Rochester/Olmsted Planning Department Zar, Jerrold H. 1996. BioStatistical for the support and guidance that made Analysis (3rd Ed.) New Jersey: this project possible. Special Prentice Hall, pp. 662

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