Downtown Building Owners meet to discuss Property Taxes
Downtown property owners met on Wednesday for an NDDC-sponsored workshop on real estate taxes at the Northfield Public Library. Nineteen people showed up to hear from Doug Shiell and Harold Sheff, from the firm of Smith, Gendler, Shiell, Sheff, Ford & Maher, and Paul Knutson, the Rice County Assessor, to talk about the problem and to consider some possible solutions.
As those that gathered know so well, the problem is caused by property values rising much faster than rents. Simply put, operating income is not keeping up with the real estate tax bills.
The causes of this problem range from local owners who are generously willing to make uneconomic investments in order to preserve and enhance historic buildings to outside investors who view local property prices as relative values and are willing to pay high prices in order to acquire. The resulting rise in building valuations and property taxes makes additonal investment in buildings difficult and operating businesses increasingly costly. Many local building owners, including some that operate a locally-owned business in their property, say that they cannot continue to operate under such conditions.
The assembled experts acknowledged that Northfield's location is a benefit in many situations but a challenge in this particular situation. They suggested working together, reaching out to potential allies across the state and focusing on what is at risk from rapidly rising real estate taxes. This includes locally-owned small businesses, locally-controlled jobs, and the potential loss of historic structures through owners' inability to pay for maintenance.
The NDDC will continue to gather stakeholders together to share information, work with local and state officials to research potential solutions, contact potential allies and keep downtown building owners informed about strategies to be pursued. Everyone in the room on Wednesday agreed, we cannot wait another 2 or 3 years to address this issue.
For more information on the workshop, see this 35 page Powerpoint presentation (PDF) on downtown building property taxes.