Mayor Helps was quoted yesterday as suggesting that offering property owners of empty retail spaces downtown a tax holiday could be a strategy to incent them to lower their rents and attract businesses back downtown. She went on to say that the city has very few levers it can use to improve the business climate and that offering a property tax break ought to be one option considered.
And then it should be immediately rejected. What a terrible idea. The mayor uses the Langford example of recently offering a tax holiday for new construction of certain types of buildings as analogous. It is not. The tax holiday is for the benefit of the end purchaser, her idea assumes that the landlord will pass on any savings to their tenant in reduced rent, a very big assumption.
Firstly, If you want to incent businesses to come downtown then offer the businesses the incentive directly. Rebate them the portion of their triple net lease for taxes, for example. Then let the market decide rent levels for retail space downtown. I can't imagine that the residential rental owner would ever be considered for a tax rebate as rental rates fluctuate from year to year. Why should the commercial property owner downtown receive such a benefit? If their space is priced at such a level that it sits empty then the solution is to make the space more attractive to tenants with reasonable rental rates and tenant improvement incentives, not to have the public at large subsidize their ownership of quite valuable real estate.
Secondly, the city has several other "levers" it can use to improve the climate for retail businesses downtown. Make licencing easier and follow Langford's lead in one and done licensing. Have more police on the street, or more private security. Work to make downtown all less threatening place, real or perceived, and people will come. Support turning Government street into a pedestrian mall. The argument that less people driving by stores equates to less customers is fallacious because there's no parking along that street anyways, so how drive by traffic helps is beyond me. Make better parking arrangements available to encourage people to come downtown instead of always being fearful of getting a ticket. Licence more taxis for night time availability to make downtown a destination for more people from the outlying areas. Look at sensible transportation alternatives that don't rhyme with bite nail. All of these things are "levers" that the city has at its disposal to help improve downtown.
Offering commercial real estate owners a break on their taxes because they can't find tenants is unfair to those that work harder, or offer better deals to gain occupancy. Property owners must work within their market and adjust accordingly, some years things go up, some years they go down. As commercial real estate owners this is something they already understand and rather than just hoping for a quick buck in escaping their taxes they need to work with the city to make downtown the destination it should be and we're going to need their property taxes in order to make it happen.