Who Really Pays For The Wall?

The number one news story of 2018 by the Newark Advocate, according to the Newark Advocate, was the demise of Longaberger. To make a long story short, property in Muskingum County as well as Licking County was developed in order to manufacture and sell hand made baskets, home décor, etc. The central office building in Licking County was built in the shape of a picnic basket, handles and all. The company went through various reincarnations until it ran out of karma. The buildings and real property steadily lost value as their original use could not be easily replicated. What company seeks a picnic basket shaped office building? State Farm? They are actively seeking to shrink their footprint in Newark. On the other end of Newark sits the now defunct Meritor plant. Same game, different players. Who wants an antiquated former factory building? Down the road is the Newark Port Authority’s public money investment adjacent the still functioning Kaiser Plant. Like the Kaiser Plant, Meritor Factory and Basket Building, the new big box distribution centers, warehouses and manufacturing developments down 79 and in New Albany are tailor made for the prospective tenant. One sits idle, clean room and all, in the Port Authority development as the tenant did not materialize. The public funding of these developments can range from any and all of land acquisition, subsidies, infrastructure, tax breaks as well as tax credits. Grow Licking County, Newark Development Partners, along with JobsOhio justify this “public investment” in terms of potential income tax revenue to be earned through the employment opportunity as well as sundry commerce generated. Success stories such as Kroger’s Market Center occupying the long vacant Meijer grocery are touted while the vacant former Chesrown dealership less than a mile away are elided. The Market Center demolished the old grocery store in order to custom make the new one. The former Kroger store on Deo Drive is likewise vacant, though it is not a stand alone commercial building (part of a strip mall). The stand alone north Newark Walmart was built on a vacant wetland and one would like to believe that it is now no longer being subsidized by tax breaks and credits, but actually generating full property tax revenue. What all of these commercial developments, along with others, have in common is that they are real property “improvements” made with a specific and exclusive utility (and very limited at that). They are not interchangeable or variable like residential property development. As with the Chesrown, Meijer, Longaberger and Meritor real estate improvements (buildings), it is the tenant that brings value to the real estate, not the material improvement to the vacant land. The 1-6-19 NY Times ran an article by Patricia Cohen entitled As Big Retailers Seek to Cut Their Tax Bills, Towns Bear the Brunt. “With astonishing range and rapidity, big-box retailers and corporate giants are using an aggressive legal tactic to shrink their property tax bills, a strategy that is costing local governments and school districts around the country hundreds of millions of dollars in lost revenue. These businesses — many of them brick-and-mortar stores like Walmart, Home Depot, Target, Kohl’s, Menards and Walgreens that have faced fierce online competition — maintain that no matter how valuable a thriving store is to its current owner, these warehouse-type structures are not worth much to anyone else.” The “foundation” of the legal arguments is that appraisals of real property for tax reasons are based on comparable sales of like properties in the neighborhood. So if adjacent agricultural land is selling for $25K an acre, that’s the assessed taxable value of an acre of farmland. It matters little if it was a corn field, forest, wetlands or truck salvage yard. The same happens with residential properties. Now the corporate attorneys want ditto for commercial properties. Newark and Licking County residents would do well to check the easy money provided to corporate developers by Tim Bubb, Duane Flowers, Rick Black and Newark Mayor Jeff Hall through the likes of Grow Licking County and Newark Development Partners. “Businesses, of course, appeal property assessments as routinely as coaches work the refs. But this approach — labeled dark store theory by critics — significantly broadens the basis for those appeals while threatening to undermine municipalities’ ability to raise operating funds. “The potential for a domino effect of property tax appeals across the commercial and industrial portions of the tax base, which, were it to occur, could have a much more profound effect on some governments’ ability to levy” property taxes,” S&P Global Ratings concluded in a report last year. For a smaller town or school district, “the financial impact could be devastating,” said Scott Nees, a co-author of the report, noting that it could also threaten localities’ ability to borrow money.” “In the Lowe’s case, the company spent more than $16 million to buy the land and construct its 140,000-square-foot building less than a dozen years ago. The city [Wauwatosa, Wisconsin] assessed the spot in a bustling retail hub right off Highway 41 at $13.6 million. The company’s appraisal was $7.1 million, based on sales of empty and once empty buildings in other neighborhoods.” ““Either my property taxes are going to go up or my schools are going to suffer,” said Lisa Williams, who lives in a classic Craftsman-style bungalow a few minutes’ drive from Lowe’s in Wauwatosa, a comfortable suburb of Milwaukee. “The stores want to get all the benefits of being here without any of the costs.”” ““These warehouses are obsolete pretty much from the moment they build them,” said Robert Hill, a lawyer in Minnesota who has represented Walmart, Menards, Walgreens, CVS, Sturm Foods, United Healthcare and other companies. “It doesn’t matter whether they’re for sale in a suburb of Virginia or Nome, Alaska.”” Analysis finds that the GOP federal tax cut which mainly benefitted corporate interests was only an additional step in the redefinition of personhood by the SCOTUS ruling of Citizens United. It likewise clearly defines the GOP’s push to privatize America. Increasingly Licking County’s GOP administrators absolve local government from public service obligations because “there is no money” while subsidizing corporate “citizens.” Corporate persons “want to get all the benefits of being here without any of the costs.” Who really pays for the Wall, or schools, or roads, or water and sewage, or anything else for that matter?

 

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