Fair Taxes and Jobs

Thursday, April 19, 2012

Some people would argue that there is a need to under assess new projects in order to get jobs or new construction into a city.  This might explain the actions of the city on new construction though there is no record of any deal involving assessment.  But what about older properties?  These have been built and paid for years ago and any deals the city or county had with them should have expired.  Well fortunately there are usually many properties for sale in any city at any time and in Rochester there are a number of them.

On page six of this Downtown Market Summary, there is a list of properties for sale and a number of them list the asking price.  Looking up the assessment and comparing I found a few interesting items.  The Merkel Donahue building is assessed at 818,000 but they are asking 2.8 million for it.  454 East Broad is for sale for 1.25 but only assessed at 460,000.  While 49 Stone St is assessed at 550,000 and they are asking just under a million.  This shows a pattern, which seems to indicate that the city is not getting its full market value correct on these properties.  If these three were assessed for their asking price the city would be getting an additional 140,000 a year.

This becomes a bigger problem for the huge towers.  Xerox announced it wanted to sell its tower in 2009  and this building complex has 850,000 square ft of office space in it which would rent for $15-24 a sq. ft a year so it would generate 12.75 million to 20.4 million a year in rental income.  Xerox even wants to rent this building back and this is the perfect investment opportunity if the building would sell for its assessed value of 13 million. As this building has so much space and would generate so much revenue for the owner it seems that an assessment at substantially more than one years rental revenue would be fair.  Now I do not know what the value of this tower should be but I do know that it is heavily under assessed and that the city is not receiving at least a million dollars in yearly revenues, which it could be receiving from this building alone.  Now consider the other large properties downtown and you see the root of our financial problems.

Now to under assess like this is a statement of priorities.  To give these generous deals is just one of the many services the city provides to the businesses and residents of this fair city.  It seems odd that for years the residents have had to give up recreation centers, firefighters, library services, after school programs, police officers, and many other things so these deals can remain in place for the large property owners and businesses.  It seems to me that when faced with another huge budget deficit that we should examine what the priorities of this city are and see if these sweetheart deals are in the best interests of all the residents of Rochester.


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