On Feb 10, 2005, at 8:55 AM, Victoria Heller wrote:
So the claims that "it's the Governor's fault" and "it's the Legislature's
fault" turn out to be false. The erosion of the commercial market in
Minneapolis seems to be the real problem. Office vacancies are 4 times
higher than required for a "stable market". Where have all of the
businesses gone?
This misses the point.
While government policies are important, business/market forces are arguably moreso. So you have to factor those in first. The factor: the commercial sector has been sluggish since 2000. Again, the metro vacancy rate in the United Properties survey is 18.6 percent - so EVERYHERE is "higher than required for a 'stable market.' Since Mpls is a titch above that, perhaps there's some local blame, but it pales in comparison to the larger market forces.
Then you get to government policies. The biggest government policy change has been the state's drop in commercial property tax rates. Multiply a flat overall economy by declining tax rates and you get less money for the city. That's why the Gov and Legislature get most of the blame for Mpls's budget mess, and deserve it, IMHO.
Unlike the Strib's property, my commercial property which is next to an LRT
station, had its tax valuation go UP.
If Vicky's property is apartments, I'd say there's potentially quite a bit of difference between Cedar-Riverside housing and a Downtown commercial building. The Strib — which, as Steve noted, already had excellent access for its employees — will benefit less than a building aimed at renters who are likely to be more transit-dependent.
Another reason apartment values ticked up is — ta da! — the Guv and the legislature. They have "stepped down" apartment property-tax rates from the mid-2 percent range to 1.25 percent over the past three years. Halved property taxes means a bigger cash flow for property owners and thus a more valuable property. (True, higher vacancies and lower rents might reduce fee-simple market-value evaluations, but I don't know how Vicky's property, if it is rental, has trended vacancy- and rent-wise.)
The paradoxical effect of the apartment tax cut is that the property owners have more valuable buildings but government sees less revenue from them.
Of course, there are a million other potential reasons why the two properties would have different valuations. Without more evidence than one factor (LRT), it's difficult to draw a strong conclusion.
David Brauer Kingfield Editor, SW Journal and Skyway News REMINDERS: 1. Be civil! Please read the NEW RULES at http://www.e-democracy.org/rules. If you think a member is in violation, contact the list manager at [EMAIL PROTECTED] before continuing it on the list.
2. Don't feed the troll! Ignore obvious flame-bait.
For state and national discussions see: http://e-democracy.org/discuss.html For external forums, see: http://e-democracy.org/mninteract ________________________________
Minneapolis Issues Forum - A Civil City-focused Civic Discussion - Mn E-Democracy Post messages to: mailto:[email protected] Subscribe, Un-subscribe, etc. at: http://e-democracy.org/mpls
