The Northfield Downtown Development Corporation (NDDC) has been hearing about rising commercial property taxes for several years. Building owners have detailed the increases they’ve received and the economic challenges that these increases have produced. The NDDC took action.
The NDDC spent time reviewing these increases and analyzing their causes and effects. We identified three key issues in the property tax challenge:
- A disincentive to invest in older commercial buildings
- A disconnect between property taxes and building income
- A growing inequity between the commercial and residential sectors
Former State Senator Tom Neuville proposed legislation to address the first issue. It’s called “This Old Building” and protects the property owner from being taxed on any increase in value resulting from investment in the building for a five-year period.
Through an introduction provided by State Representative David Bly, we met State Representative Paul Marquart, Chair of the Property Tax Relief and Local Sales Tax Division Committee. Representative Marquart has proposed legislation to address the second issue. We’re calling it “This Old District”, at least for now. It identifies special Districts of older commercial buildings and exempts those buildings from the statewide C/I property tax.
After working quite hard on this issue for several years, and seeing limited results, this latest step appears to be real and substantive progress. This proposed legislation can provide meaningful relief to older commercial districts throughout Greater Minnesota.
We are pleased to be making steady progress on the property tax challenge, with potential legislation to address the first two issues. The NDDC will continue to work with state legislators to try to find policy recommendations that will result in potential legislation to address the third issue in the property tax challenge.
Eight years of double-digit property tax increases has put our older commercial districts at extreme economic risk. By systematically addressing all of the related issues, we can find a comprehensive solution.