Mommy, why is there a hole in our city?
I can practically hear a child asking that question after looking at this picture.
Right now, that hole is owned by a fairly unmotivated group of investors. And why should they be motivated? It turns out that it’s profitable to own a hole in the center of the city. Who knew?
Using some rough numbers, those 200 parking spaces at $6/day bring in over $300k/year. The auditors website says that the lots pay about $125k/yr in taxes. Not a bad year’s work, eh?
Based on a 2006 article from Business First, the owners openly admit that they’re unmotivated…
Real estate investor Jason Gunsorek has picked up a parking lot at North High and West Long streets in Columbus for $3.17 million.
An affiliate of Gunsorek’s Anchor Cos. bought the downtown property Oct. 16 from Terrapark II LP of Toronto.
“We just see the gap between the (Statehouse) and the (Nationwide) Arena closing and felt, with this property at this location, we couldn’t go wrong as a short-term and long-term investment,” Gunsorek said.
The developer expects to build a mixed-use project with ground-floor retail and offices and condominiums above.
Street-level tenants could include a fitness club, a restaurant or a small market, he said.
“We’re really in no hurry,” he said.
So how can the city go about motivating Mr. Gunsorek to stop sucking the life out of our center city? I’ve got two easy proposals.
1) Build the starter streetcar line. That location would be smack dab in the middle of the line and would be unbelievably marketable to businesses or residents. He could put anything from mixed-use residential project to a high-rise office building on the property and have a license to print money. It would be silly to remain in the parking lot business.
2) Change the current tax structure. By switching to a land value tax, we can tax the surface parking lot the same as we can tax the skyscraper next door. This means lower taxes for those who build with higher density, and those who own and operate surface parking lots will be faced with a difficult choice. Raise your parking rates, build a parking garage, build something else that will be profitable, or sell your property to someone who will.
The developer said it himself: “We’re really in no hurry.” With taxes on vacant lots as low as ANYthing taxed, the speculator can hold on to it for years, if they want to.
Land speculation is so corrosive to normal market growth of an urban area, it’s no surprise, it’s hard to find a ‘center’ in Columbus.
I spoke to the “Growing Inward” group about 7 years ago on land value tax (LVT), and we found that the then-new Short North would do well with LVT, and the gaping lots everywhere would at least have a fairer cost of holding them out of use.
Land is an asset given value by the community and only by the community.
Surely our local government knows about this. The question is why they haven’t pursued this long ago?
I’d guess that many of the people who own highrises also own lots and they have probably, at least up till now, been lobbying hard to leave it as is. The highrise owners are not likely to recognize a savings if the LVT is put in place. Basically they’ll have more competition and, if they own lots they’ll see an increase in taxes on those. I think the LVT is fair in this context but I would think it will take a ground-swell of citizen action to get it done.
It might be too early to worry about the possibility of having too many skyscrapers downtown, but I think it’s important for zoning to make sure that natural light continues to be available downtown, especially if a new tax system were to encourage higher density. I like density, but think height should be regulated to some extent. I work in the Loop in Chicago and the buildings block out all the light. It’s rather depressing in the winter.
I’d take a little of that type of depression in exchange for the depression I feel when I walk by these gargantuan surface parking lots in the middle of Downtown Columbus.
More mid-rise buildings instead of a few high rise buildings could eat up a lot of that surface parking.
An acre downtown, well developed, can save 5 or 10 acres on the fringe from premature development. An acre downtown, well developed, can create venues for hundreds of jobs. That acre, well developed, competes with other neighboring properties for tenants, keeping rents down for entrepreneurs. Entrepreneurs create jobs and create a lively marketplace in all the goods and services we want, and prices stay low because they compete for our patronage.
How do we get from “hole in the city” to prompt redevelopment of underused sites? Land value taxation. Unburden the buildings. Nudge those downtown sites into use.