Time for another ramble down the local business corridor to see what, if anything, has changed. Oh, look, another closed business/property for sale.
I expect it’s down to property taxes, driven by land values. Why else hold onto vacant land? It might be worth considering how we tax/value commercial property. The value of the land and the taxes required to keep it are increasing faster than the business can pay them. 2/17
It’s never good to see businesses close but there are no farms on Manhattan island or in the City of London, as there once were. Cities evolve and the best use of that land evolves with it — too expensive to keep in its current use and too hard to sell if you wait too long.
The 3rd generation heir to Hardwick’s was reported as carping about the $30k tax on the $3M parcel under the store. That’s a fulltime employee at $15/hr.
Commercial businesses can find themselves clinging to a valuable location long past the time when they can hold onto it. Worst case, they move but are stuck with land that is now hard to sell. And the rest of us are stuck with vacant parcels and graffiti exhibits.
If commercial land was rented, not owned, the only investment would be in the improvements. The land’s value would not enter into any decision about the survival of the business.
When land rents get too high, the owner could just move the business, without having to sell the land. The business owner should be focused on their business, not on the value of the land as a speculative sideline.
Low-rise/single story bldgs, car lots (small bldg, enough land to show the wares), retailer w/ warehouse — low margin/low turnover for the amount of land they take up. Time has passed them by.
Recall the city block across from City Hall that sat vacant for years(!). The cost to acquire land for development is too high. We hear that often but pay it no mind. That should have been built on years earlier.
A warehouse/retail store on Lake City Way, valued at $2m and now vacant for a year or more, isn’t generating any revenue beyond the property taxes. And the other nearby parcels have been vacant even longer. Can Seattle make it possible for developers to put these to productive use?
And what of the land that has become so expensive any development will be as bland as possible but expensive, as it needs to recoup that investment? @bretthamill was remarking on the cookie-cutter similarity of new projects.
Maybe Seattle’s state of emergency over homelessness, set against the backdrop of inequality, a potential teacher strike, suggests we do something a little unconventional. @govinslee wants @demgovs to lead: here’s an idea.
In parts of Seattle, King Co, etc. why not test a land value tax/land rent for long-vacant (1yr+) commercial property where the ownership of the property reverts to the public, replacing the sale with a land rent on the physical land and either $ or a nominal tax on any improvements?
If it works, if it gets that land developed and creates jobs, then maybe it can be expanded to other areas where the needs of the city for buildable land have evolved past the current use.
Rather than claim the land under eminent domain or force the owners to sell under duress, we could set aside some of the land rent to pay them an agreed-upon price over time, after which the land is part of the commons, never to be sold, and the rents are paid to the city.
Think of all the disused parcels that could be turned to more productive uses. Those vacant lots and boarded up homes by Roosevelt HS and the new Link station are valuable *because* of public investment. What is the plan for them?
It’s past time to rely on old ideas or 19th C land-use policies to get us out of a 21st C problem. Let’s at least try something on a small scale and see if gets things moving in the right direction.