Yes, All Downtown Property Owners Will Benefit From the Easton NID Plan

A couple points on Samantha Marcus’ article on the Neighborhood Improvement District in Easton:

Advocates can expect a fierce debate if not a legal fight led by prolific downtown developer Peter Koehler of Koehler Kheel Realty.

This brand of a la carte taxation doesn’t sit well with him. He’s already absorbed landlord licensing fees to avoid passing them on to his tenants, he said, but said he — and rent — are at a tipping point.

“We could raise rents, but we’ll lose tenants for sure. It gets to a point you can only charge your tenants so much, what the market will bear. It’s the wrong time to impose another tax on people in the city,” Koehler said.

“I have employees and myself, we go out, we clean our sidewalks, we repair them, we power-wash them, we repair our buildings inside and out,” he continued. “We should not be penalized for the people who do not take care of their properties. Why penalize the good property owners?”

Koehler is looking at this backwards. The bad property owners are dragging down the value of neighboring properties. Likewise, the dirty street conditions that would result from the expiration of the Ambassadors program would also drag down property values. Alternatively, clean street conditions and the Panto administration’s anti-blight strategy are going to increase property values. What’s more, they’re going to increase property values above and beyond what Koehler would be able to do by himself keeping his own properties looking good. That’s a windfall for property owners, so capturing back some of the value to recoup the costs is a perfectly fair way to pay for it.

Sal Panto has another good point:

“Those people who benefit from a service should pay for that service,” Panto said. “Should a neighbor on Washington Street pay for an ambassador to help keep downtown clean?”

Still, everyone reaps the proceeds of a downtown revival. Easton is estimated to collect $600,000 in business privilege taxes in 2011, up from $511,000 in 2009. That’s $90,000 less that residents have to pay, Panto noted.

If Easton Main Street Initiative manages to get even more businesses downtown, that also increases property values and increases business privilege tax receipts for the city, minimizing the need for future tax increases.

The downtown property owners who are saying they aren’t going to benefit from this are wrong. They’re going to be reaping the positive externalities from more robust growth.