Years ago the City of Philadelphia could not get anyone to build residential housing downtown. To promote the development of market rate housing in their downtown, the City of Philadelphia offered.
Here is Citizens for Business Press Release from September of 2009. Let me say that again–2009:
Hundreds of buildings in Worcester are vacant. In a recent Worcester Research Bureau study it was identified that only 15% of the Worcester tax base which the city depends on to pay for critical services is made up of businesses. Over the last 25 years Worcester has had a drastic reduction in businesses in part due to the dual tax rate which was enacted in 1984. The dual tax rate means that a different tax rate is used for residential and commercial properties, an approach that differs in stark contrast to the one that exists in most of our surrounding towns. An increasing number of buildings in Worcester are vacant, abandoned or deteriorating.
Other cities have experienced similar problems. After watching the downtown population of their city decline steadily over 40 years, the City of Philadelphia decided to take action and reverse this trend. In 1997, they decided to lock-in the assessed value of residential conversions at their predevelopment level for 10 years. In 2000, new construction of residential units was added and began enjoying the benefits of locked in predevelopment assessed values for 10 years. As result, more than 8,000 converted and new units have been added to the tax base. Now that the abatement period is over for some of the early adopters, Philadelphia is reaping the rewards of a larger tax base. Since inception, the City of Philadelphia estimates that tax abatement program:
· Produced 2/3rds of the development that otherwise would not have occurred.
· Generated $4 billion in additional economic activity.
· Will yield a cumulative gain of $285 million over 25 years.
Closer to home, we have all seen the benefits of a similar program with the Hanover Theatre in downtown Worcester. In this case the property taxes have been held at the predevelopment assessed value for 7 years, not 10. In addition all permitting fees, which were approximately $200,000, were waived. We now have a beautiful building that is now heavily utilized that had been previously neglected.
Worcester Citizens for Business (WCB), a grassroots organization made up of residents and business owners focused on restoring economic viability to the City of Worcester, proposes that we focus on expanding the commercial tax base in Worcester using the model created to inspire development in Philadelphia in combination with the model we have already experienced success with at the Hanover Theatre. WCB supports a comprehensive plan to:
· Target the Commercial Area Revitalization Districts
1. Canal District
2. Downtown
3. Lower Lincoln
4. Main South
5. Pleasant/Chandler Street Corridor
6. Southbridge Street/South Worcester Industrial Park (SWIP)
· Freeze predevelopment assessed values for ten years on any commercial improvements or new construction.
· Waive all permitting and sewer and connection fees.
This program will provide an important new tool in a concerted effort to attract new businesses to Worcester as well as encourage renovations and development. Let’s work together to lower taxes for residential and commercial property owners and restore city services by expanding our tax base.
Now this week I read about the City of Worcester to consider giving breaks for sewer connection fees and tax breaks for biotechnology. Have we formed that Philly task force yet???
