Comment 73521

By seancb (registered) - website | Posted January 31, 2012 at 10:32:17 in reply to Comment 73504

May I humbly suggest that the fundamental reason you have trouble - and the reason the Newcastle model won't work here - is that we currently reward landowners with significant tax savings for vacant spaces.

To implement this model, the rent would need to be greater than this tax break - plus more to cover different insurance needs of a tenanted building not to mention heating systems, roof repairs, utilities etc.

In order to do this "properly" we would first need to eliminate the vacant building tax credit, and even better, rework the tax credit system to reward building owners for making fundamental upgrades to their buildings.

When we moved Bike Hounds last year, the previous owner had a vacant building application with the city which we did not renew. As a result, in 2011 our taxes rose significantly from what the previous owner paid. On top of that we had to buy a $12,000 boiler system. This is not a sustainable situation for many new businesses, and we took a great risk in doing this, based on faith in the bike shop and faith in Downtown. Without this faith, it would not have happened.

But Imagine if the system was reversed - what if the previous owners had to pay full taxes? And what if we got a tax break for creating a use for the building? And what if we got a rebate for installing a new heating system? What if we were rewarded instead of penalized for using the building?

If we reworked the taxes in this way, then this sort of revitalization could be feasible for small start ups. Imagine the effect on downtown if all of a sudden these vacant buildings started bleeding money for the absentee landowners. They would jump at the chance to unload them, and those who bought them would be encouraged to actually use them. We could end this rampant speculation and demolition by neglect overnight.

To put it simply, our system is fundamentally broken, and until we change it, we'll see more of the same - namely, absentee landowners who know they'll be penalized if they try to do anything with their buildings.

The city created this problem. It's time to create the solution.

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