Why should you expect your property tax rates to increase?

Today’s (29 Mar 2008) Burlington Free Press John Briggs article, “Cornell renovation plans for Battery Street on hold” http://www.burlingtonfreepress.com/apps/pbcs.dll/article?AID=/20080329/BUSINESS/803290303/1003 said “The city had paid Sanel $850,000 for the building, and it paid $595,000 to two tenants, Mesa International and Waterfront Video” to get them to leave “the building to allow the bus station to be put up.” “The city also spent $1.5 million in design costs for the bus station.” In case arithmetic is not your strong suit, that totals $2,945,000 of your and my property tax money.

The article went on to say “In October 2003, Cornell Trading Co. of Williston took an option to buy the building, planning to build on the old foundation to create a new corporate headquarters topped with three condominiums. The city arranged for a $700,000 federal loan, to be repaid from Cornell’s property taxes, to upgrade the Battery and Main Street intersection, and it agreed to pay Cornell for parking rights on the property in the evening and weekends. The plans were approved by the Development Review Board.” This means the City administration and the DRB agreed to take the property taxes from that development that would have helped to keep our property taxes from increasing, and spend them instead on road work so Cornell Trading could better use its building.  I don’t know about you, but the intersection of Battery and Main Streets looks pretty good to me, and better than many others in the City.  Why should we lose $700,000 in property taxes to rebuild that intersection?  

The good news from this article is Cornell Trading went bankrupt and the real estate market tanked so the road work did not need to be done. I assume the $700,000 loan was never drawn down so we do not have to pay it back, but I wonder. Does anybody know? If you do know, please tell us all.

The bad news from this article is the City, or should I say you and I, paid $2,945,000 to get an empty building!  $2,945,000 here, and $2,945,000 there, and pretty soon not only do you have real money, but also higher PROPERTY TAXES!  Where is the good City oversight we have every right to expect?

The other bad news is, instead of selling the land and development rights for much more than $2,945,000 to someone like Pomerleau, Retrovest, Redstone, Melinda Moulton, or any of the other many developers in Chittenden County who have a track record showing they could get the development done, what do you think the City did?  According to the article, the City let Chris Cornell keep the option to buy the land and develop the site.  Chris is quoted as being in the Cayman Islands and saying “everyone” “is cautious in financial commitments right now.”  Well, perhaps not so cautious when it comes to where to spend the winter, but only about real estate development when that is not your primary business.  

What does everyone think?  Should the City do what it needs to do to cancel Chris Cornell’s option and sell it instead to someone who can and will get the job done without Tax Increment Financing (TIF) so we can get some short and long term revenue into the City to keep our property taxes where they are?

In case you have not noticed, this winter has been hard on our City streets and sidewalks.  Steve Goodkind, the Director of the Department of Public Works has been telling the City Council how bad our streets are and how, for many years, the Council has not funded enough street repair for Public Works to stay even with the damage done every year.  Steve is going to return to the Council and give them more details of how bad our streets are with the expectation the Council will allocate more money to street repair this year.  There has already been talk of increasing our property tax rate by $0.05 for street repair.  Wouldn’t it be nice to have the $2,945,000 right now to use on the streets, much less the property, sales and other tax revenue that would be generated once that site was developed?

Tell your Councilors what you think.  Their names and phone numbers are on  http://www.ci.burlington.vt.us/citycouncil/councilors/ so you can easily contact them and tell them what you think and feel.