Vicky Heller writes: > > Per square foot for the tax year 2000: > > Minneapolis $ 8.73 > Seattle 2.12 > Denver 2.14 > SanFrancisco 2.38 > Dallas 2.56 > Atlanta 3.18 > Milwaukee 3.81 > Boston 8.56 > > Question: How will Minneapolis attract businesses to fill up all of those > buildings that we built downtown? > > Point: If businesses don't pay a big hunk of the property taxes - > homeowners and renters will.
While Vicky's point is undoubtedly true, there are a couple of other things to note: 1. The survey was done by the Building Owners and Managers Association - a group lobbying for lower property taxes. They did not compare cities, they compared specific buildings in cities (in this case, the Wells Fargo Center in Minneapolis and the Wells Fargo Center in Denver). BOMA claims the buildings are equivalent, but we don't really know. How likely is it there's a signature Cesar Pelli 55-story tower in Denver, too? Remember, property taxes are (like it or not) a wealth tax - we have no way of knowing that assets of like value are being compared. This sort of fun-with-stats is easy to manipulate. 2. The Strib story also notes Wells Fargo (Minneapolis) taxes had dropped from $9.73 a square foot in 1998 to $9.12 in 1999 to the $8.73 2000 figure. Commercial property taxes will drop again - significantly - in 2001. The shift Vicky notes is already happening: businesses are paying a smaller chunk of the property taxes, and homeowners more. Perhaps she can work to reverse that! <grin> 3. Wells Fargo was built by private market forces in a high property-tax climate. The building has done just fine, whatever the cost-per-square-foot in property taxes is. Don't forget; taxes aren't money down the drain - they buy things too. Things that apparently helped made such a building a good investment over time. > Note: It would be nice if someone at the StarTribune kept us posted on the > vacancy situation and financial health of the "developers" since Minneapolis > taxpayers co-signed the mortgages. We already know that Target Center and > City Center are rolling over, but what about the rest of them? A few years > ago, we lent the Radisson Hotel $20 million. What ever happened to that? As others have noted, Minneapolis retains high bond ratings from firms which professionally assess debt-to-wealth ratios. The recent slight downgrade by one of the three bond houses was due to internal City Hall budgeting, not external debt-to-wealth ratios. I wrote previously, Target Center's failure to pay its bonds is directly related to these big commercial property tax cuts. Wolves owner Glen Taylor's payment-in-lieu-of-property-taxes (a property tax equivalent), fell dramatically, producing the shortage. Had commercial tax rates not been cut, the building would pay for itself just fine. For argument's sake, I'm not saying rate cuts are bad policy - but let's be clear that a big reason for Target Center's malaise are the very tax cuts I think Vicky supports. To be clear: I agree with Vicky that subsidizing dumb stuff is bad public policy. However, the mere high property-tax figures she provides doesn't make the case - she'd have to quantify what slice of the $8.73 Wells Fargo pays is due to bad Minneapolis subsidy decisions...and balance it against how much the asset value has appreciated with smart public subsidy decisions. David Brauer King Field - Ward 10 _________________________________________________________ Do You Yahoo!? Get your free @yahoo.com address at http://mail.yahoo.com _______________________________________ Minneapolis Issues Forum - A Civil City Civic Discussion - Mn E-Democracy Post messages to: [EMAIL PROTECTED] Subscribe, Unsubscribe, Digest option, and more: http://e-democracy.org/mpls
