Archives for February 15, 2013

Highest and Best Use

Like Rich, I don’t really have a strong opinion on Sal Panto’s proposal to move Easton City Hall to the new intermodal building, but generally speaking I think you want your highest value city land to be devoted to taxable uses as much as possible.

The land parcels around Centre Square* are some of the highest value parcels in the city.  Easton’s going to collect more in property taxes with those properties on the tax rolls than if they’re owned by the city or non-profits. The Alpha building is huge and in a great location, so it looks like there’s an opportunity for the city to make some money, first from the sale of the building, and then on an ongoing basis from property taxes.

Little by little, replacing low-value uses on the highest value land with something approximating the highest and best use is a good strategy for firming up Easton’s budget and growing the downtown economy. That could mean trading up for higher-value tenants like in this case, or replacing the worst properties with better buildings (think Family Dollar building, Rock Church, the parking garage, the municipal lot across from the bus station, etc.)

*Always bothered by this spelling. This is America, dammit, not the UK! We spell it Center!


Include Free Transit in the Allentown CBA

Another point about the Community Benefit Agreement in Allentown: it should include free trolley buses.

A bus rapid transit system to get people around the city could be mostly as good as a a subway system if planners make the correct right-of-way and land use choices, but it would cost a small fraction of the price.

I’ve read a number of people saying they’re worried that all this new development will raise residential rents and push poor people out of the downtown area. And some of that is obviously going to happen if all this development does succeed in making downtown a lot nicer.

The best way to really help people then is to take away some of the money and time costs of getting around the city through free bus transit, paid for with an increase in the land millage rate in th NIZ. No fares, completely free to the users.

This would help alleviate traffic on hockey nights, reduce the cost of living for Allentown residents, and enable more intense development so that building a bunch of tall buildings won’t choke off growth with car traffic.

Pay for Alan Jennings’s NIZ Ideas By Taxing Land Speculators

The whole point of the Allentown NIZ is to reduce rents and encourage development in downtown Allentown. The state subsidies for “developers” are actually a subsidy for the end users of the office space – business tenants. Likewise, Alan Jennings’s proposed surcharge on “developers” will actually be a tax on the tenant businesses who end up renting the space.

I can get down with a Community Benefit Agreement, but think it’s a bad idea to pay for it with something that’s going to raise rents, when the whole point of the NIZ is to reduce rents. The financing method should reinforce what you want people to do, not work against it.

I think ANIZDA should pay for the CBA with a tax that will reduce rents – a small millage increase in Allentown’s land value tax on the land inside the NIZ. Paying for the CBA with the land value tax would tax people for not developing land in the NIZ, instead of taxing people who are developing land.

That is, speculators who own empty parcels that are now quite valuable. These landowners have gotten a windfall in the land value of their properties for no other reason than that the state passed the NIZ law. Folks who are simply pocketing that windfall and not building anything new are using valuable land poorly, and it makes sense that they should face a tax penalty for waiting to avail themselves of these very powerful state subsidies.

One way to do this might be to layer a Neighborhood Improvement District onto the NIZ land parcels, and then pay for whatever services you want with a small increase only on the land portion of Allentown’s split-rate property tax.