Tacoma Urbanist

Dec. 16, 2011 at 12:01am

Partial City of Tacoma Funding Solution #2: Sell off Swaths of City Owned Blighted Lots and Buildings

(from Tacomaness) "See all that green area downtown? That’s not an urban park system, it’s vacant land. That’s money spent in the 1950s and 50s on slum clearance. Back when the federal government was in the business of tearing down cities."

The City of Tacoma's land and building holding is immense.  Every few years, it is listed in massive excel spreadsheet.  Much of it is property that the City of Tacoma is holding onto is vacant and/or blighted. Some of it is being held as part of former city manager Eric Anderson's misguided effort to move city hall out to the outskirts of downtown in a suburban campus.

Some the vacant land is creating a massive dead zone around the edge of downtown.

The city should start vetting ALL of it's land holdings and if the property is not going to be used for a city purpose in the near future, sell it off. 

There should be three categories:

1) Land and buildings to keep.

2) Land and buildings to sell but with restrictive building criteria

3) Land and buildings to be sold off to market with no criterial

Reducing the immense and unnecesarily large land holding would result in more land being placed on the tax rolls bring in revenue for the city. 

Money would be made from the sale of the land and the land could be developed to add vibrancy to Tacoma.  Both would add funds to the City of Tacoma's coffers.  Especially around and above UWT where student housing is badly needed. Much of the housing shortage, blight, vacancy in the city is self imposed.

Selling off the unneeded land would result in win-win-win.

comments [30]  |  posted under Tacoma, tacoma

Comments

by Erik on 12/16/2011 @ 1:10am
Here is a use:

Asia Pacific Cultural Center has an ambitious plan for a major project it wants to build on a city-owned parcel in downtown. Representatives of the organization discussed their proposal for a $118 million structure during the Oct. 11 meeting of Tacoma City Council’s Economic Development Committee.

The three-story building would have 381,000 square feet. It would have 50 apartments for low-income senior citizens and 20 for students. An anchor tenant would be a grocery store specializing in Asian food, which Levin said would be along the lines of the Uwajimaya chain. Other features would be a food court, gift shop, classrooms, exhibition hall and an auditorium that would seat about 250 people. A parking garage would have 557 stalls.

The location would be 3.6 acres at the intersection of Jefferson Avenue and South 21st Street. The city purchased 6.2 acres there in the 1990s with the intention of building a police headquarters, a plan that was shelved when another location was chosen. The parcel was assessed at a value of $3.9 million in 2009.


www.tacomaweekly.com/news/view/apcc-prop...

by Urban E on 12/16/2011 @ 8:01am
How about finally letting Hilltop have back pretty much the only breakfast spot on the Hill and save the Browne's Star Grill. I'd put that under #2.

www.facebook.com/pages/Save-the-Brownes-...


by Jesse on 12/16/2011 @ 8:02am
Even though much of this property is zoned for mixed use, I think it's better off as houses than to be completely vacant.

In a perfect world I'd move the Chinese Reconciliation park to part of the parcel down the hill from the APCC project and give the rest to Tacoma Parks. At least people would know it's there and there'd be a constant eye on it. That area needs a park really bad if ever it wants to attract families.

by fredo on 12/16/2011 @ 8:25am
Good topic Eric.

The lots under discussion are just a part of a larger problem of property around town which is not generating any property tax to pay for police, fire, streets, etc. Here are the groupings I've come up with:

1. Vacant development land (as you mentioned)
2. Tax abated properties (such as the condominiums)
3. Non-profit organization properties (such as churches, etc.)
4. Buildings with low income subsidized housing (such as section 8)

All this means that the people who own actual taxable property have to pay a larger property tax to afford all these people the luxury of paying no property tax. We need tax relief.

by fredo on 12/16/2011 @ 8:32am
continued:

When these properties are turned back over to the private market the new property taxes should be used to lower the rates for the existing property owners in the county. We shouldn't be using these funds to continue the overspending at city hall. That's a separate problem created by the council.

RE: the Asian villiage. I'm OK with that, but my understanding is they don't have the money to do it. I don't want any of my tax money to build it. Let the private sector do whatever they want..

by fredo on 12/16/2011 @ 9:31am
"An anchor tenant would be a grocery store specializing in Asian food, which Levin said would be along the lines of the Uwajimaya chain. Other features would be a food court, gift shop"

Just a few months ago everyone in Tacoma including the city council was trying to block another business which featured Asian made goods. Now we're promoting the idea. I guess this begs the question, should Tacoman's be allowed to buy Asian made goods or not?

by Jesse on 12/16/2011 @ 9:57am
If any of the property tax abatements and land give-aways have a good ROI over time, than you'd have to be stupid to look at the balance book of one single year and point to that as a reason to not help a project happen.

by fredo on 12/16/2011 @ 10:17am
"If any of the property tax abatements and land give-aways have a good ROI over time, than you'd have to be stupid to look at the balance book of one single year and point to that as a reason to not help a project happen." jesse

What does that mean? If some consultant can show that a property will return lots of sales taxes and property taxes then the taxpayers should give away the property or help them fund the project? The problem with projections is that they are frequently incorrect. Over enthusiastic projections are why the city spent $84,000,000 on a convention center when, in fact, there was no demand for a convention center. I'm tired of funding other peoples dreams. If people, like the Korean Woman who want to build the Asian village, have a dream, then go get the money from the bank or sell shares of an investment. Leave the taxpayers out of it.

by Jesse on 12/16/2011 @ 11:39am
Yes. Do the math. A good ROI is worth it.

Please understand the difference between an investment and a give away.

by fredo on 12/16/2011 @ 11:46am
ROI is entirely dependant on what numbers you plug in. You could take the worlds stupidest proposal, say a solar powered road grader, and if you apply some loopy assumptions it will show a healthy ROI.

The taxpayers shouldn't be taking the risk on these proposals. We shouldn't be investing in these schemes or giving the property away.

Let the James G. Murphy company dispose of the parcels in a big one day auction. If you want to see a particular parcel developed in a particular way, then get pre approved for a property loan and attend the auction. But I'm not underwriting your dream regardless of ROI.

by Jesse on 12/16/2011 @ 12:04pm
Let's see some property tax math on... say... the Mercado. Land worth say $5m before project. Property now worth say $30m total today. Let's say there's a property tax abatement on the project for 15 years so collections are based on the $5m for that time. But, since the abatements helped the contractor/owner be able to make the property pencil out - the property gets built. Which is more in property tax collections? Is it the tax based on $5m over 30 years or the abatement of 15 years plus 15 years at 30m??


by fredo on 12/16/2011 @ 12:26pm
I'll follow up on your property tax example.

Instead of the Mercado going in, the property is sold to a traditional business and the improved property is worth $30m total today. There's no tax abatement on the project so the property tax collections are based on the entire value of the project from day one. Which is more in property tax collections? The mercado which doesn't generate hardly any collections for the first 15 years or the traditional business which generates lots of taxes for the first 15 years and thereafter into the future.


Wow, I like playing property tax math.

by Jesse on 12/16/2011 @ 12:48pm
... except, my example actually gets built.

Go ahead and give Grace Pleasants a call and ask her if the property proposed north of the old dt elks has a chance of being built without any gov't incentives.

Your example is completely irrelevant.

by fredo on 12/16/2011 @ 12:55pm
Jesse, I'm not completely against the subsidies. However, if we are going to have subsidized development then let's level the playing field and provide it to every business in town. Condo developments don't promise to provide higher future property tax collections than other sorts of developments.

My wife and I bought commercial property here in Tacoma a few years ago. Over a period of 15 years I expect we will pay about $60,000 in property taxes. Obviously I would prefer to just keep that money for myself.


Either provide subsidies for everyone or provide them to no one. The council shouldn't be picking developers and projects that it prefers.

Also, we don't know if these frequent entanglements with developers actually enhance development in our city or impede the development. We can't assume that projects built with government help wouldn't have been built without the help. We just don't know.

by dolly varden on 12/16/2011 @ 1:10pm
Good idea, Erik. I'd like to see some of that property sold off and developed. I also agree with Jesse that the neighborhood could really use a park, and that some of the land should be saved for that purpose.

by Maria on 12/16/2011 @ 1:27pm
I'm surprised at how few apartments this development is designed for. And that they're focused on seniors & students. Are they going to build another residential tower in the future? The Seattle Uwajimaya mixed-use development has 176 units, with a range of prices from affordable to more expensive.

Although I'd love to see a space dedicated to Asian art and culture, the exhibit and auditorium rooms seem like a difficult project to fund or justify in this economy, given reduced non-profit event attendance and excess of conference/meeting spaces.

Side note: Uwajimaya's urban mixed-use center was developed in conjunction with Lorig & Associates. I heard a really great presentation from Mr. Lorig about their Northgate development and how they juggled a sensitive environmental site (a damaged creek basin), the activist neighborhood, underground parking, transit funds (it's also a commuter parking/transit center area), municipal funding and private developers.

www.lorig.com/cs_thornton-place.htm

Thornton Place was once the site of an intense public/private battle. The community wanted to daylight Thornton Creek, a waterway that was trapped for 50 years in an underground drainage pipe. They also desired a vibrant, walkable project that would bring new housing and entertainment options to the neighborhood. The landowner and previous developers, on the other hand, wanted to maximize the development potential of the site and proposed little or no public amenity. For three-years, Lorig worked in close public-private-partnership with the City of Seattle, King County and a "Northgate Stakeholders Group" convened by City of Seattle Mayor Greg Nickels to develop a plan that helped break a log-jam that had stymied previous development efforts. While previous developers had resisted, Lorig embraced the "Storm Water Quality Channel" concept proposed by Seattle Public Utilities – then, as Master Developer, negotiated the purchase of the site from the Northgate Mall owner, sold pieces to its public/private development partners (Seattle Public Utilities, METRO, ERA Care) and retained the majority of the site to develop into a mixed-use, mixed-income community. The finished project includes 50,000 square feet of retail space, a 14 screen cinema, 387 market rate & workforce apartments all constructed over an 850-stall parking garage.

Here's a link to their Uwajimaya case study also.
www.lorig.com/cs_uwajimaya.htm

by Erik on 12/16/2011 @ 9:19pm
True Maria. Tacoma is still struggling to building any new good urban settings. Most of the best vibrant urban areas in Tacoma were built pre WWII.

by Erik on 12/16/2011 @ 9:29pm
Tacoma better think of some creative solutions soon or this is headed their way:

Tacoma's community policing on chopping block

Community policing has saved some of Tacoma’s worst neighborhoods, say the residents who no longer dive to the floor when they hear a backfire.

The gunfire is down. Ditto assaults, prostitution and drug dealing.

None of that, they say, could have been accomplished without their community liaison officers. Those residents consider themselves the CLOs’ partners in a program that works in tandem with the city’s traditional patrol model.

www.thenewstribune.com/2011/12/16/194842...

by fredo on 12/16/2011 @ 9:55pm
Merryman's column is BS and it doesn't have anything to do with the development parcels IMO. That's all a bunch of scare tactics designed to get the voters ready for some big tax increases which the council is planning to roll out.

by NineInchNachos on 12/17/2011 @ 1:33am
Barefoot Bandit for Tacoma City Manager!

by Maria on 12/17/2011 @ 2:43pm
Sorry, I was on my way out of the house and I didn't make my point very clear:

Government money and leadership were part of both those Seattle projects I cited above.

But to me, the thing I notice is that it took creative, private, coalition-building business owners to make these kinds of major projects happen. We need people of influence and wealth in our city to work for the common good and take initiative on urban renewal projects--when they're feasible, and when there's the potential for community transformation mixed in with with high profitability.

by fredo on 12/17/2011 @ 2:59pm
If there are people of "influence and wealth" in our city they can buy the parcels and put in whatever they want. If they want an Asian marketplace I would encourage them to build it. Leave the taxpayers out. I'm tired of these public / private partnerships that have the poor taxpayer privatizing the revenues and socializing the costs. Haven't we learned anything from the Wall Street mess?

by Jesse on 12/17/2011 @ 4:59pm
A couple of years ago I was watching the news while visiting Portland. These tax abatements have been in effect there for years and some in the swanky Pearl are ending. All projects that would not pencil out and therefore never be built without the abatements. The news cast was talking about the windfall of new cash for that calendar year.

So I bet the Portland taxpayer is so pissed over this!! Ya... leave the taxpayers out of it!! We hate investments and windfalls of cash!!

But, This is my last comment on this thread. I don't plan on going round and round with fredo.

by fredo on 12/17/2011 @ 5:11pm
Tacoma isn't Portland. I'm glad Portland doesn't have any problems. However, the public/private partnerships havent worked so well here. Incidentally, there are lots of WalMarts in the thriving city of Portland. Maybe that's the key ingrediant that Tacoma is missing.

by dolly varden on 12/17/2011 @ 6:10pm
20 or 25 years ago, Portland wasn't doing much better than Tacoma is today -- the "let's not do anything other cities do because we suck" line of thinking is tiresome.

I believe there's one Wal-Mart inside Portland city limits. In your face, Portland!

by fredo on 12/17/2011 @ 6:41pm
Dolly, what do you want Tacoma to do?

We're in debt up to our eyeballs and in addition our city council has run up a budget deficit to the tune of $31,000,000. Is flirting with insolvency something that successful cities do?

by Maria on 12/17/2011 @ 6:47pm
"I'm tired of these public / private partnerships that have the poor taxpayer privatizing the revenues and socializing the costs."

Yeah, true. That public / private initiatives can transform urban districts doesn't mean all of them are good...some are just messes.

(Funny that we're talking about this on the Internet, developed in public and private labs using both public and private monies, resulting in massive wealth generation both in the public and private realms. See how that can work well for the general good?)

But yes--public money is a trust and should be spent wisely. Sad example of how a great vision is not always practical is cited below re: the Wenatchee Civic Center:

www.wenatcheeworld.com/news/2011/dec/10/...

seattletimes.nwsource.com/html/editorial...

Community enthusiasm to build a regional center envisioned a venue to host hockey, soccer, trade shows, concerts, graduations and other events. The 4,300-seat arena opened in October 2008. Early rosy estimates, from the developer and an independent source, had the arena easily covering its debt payments. The reality was short-term borrowing to pay for construction, no long-term financing and a flood of red ink.

by fredo on 12/18/2011 @ 9:18am
Thanks for the Wenatchee Civic Center comment, Maria. It's easy for people to get sucked into a vortex of civic funding when they only read the stories where things went well.

But for the people who persist in thinking that the government has a responsibility to fund everyone's dream, here's a proposal for you

I'd like to build an enormous liquor superstore DT on one of the parcels that Erik described I'll call it Fredo's House of Spirits. I would like to have some low income housing upstairs reserved for the plight of document challenged immigrants. I'd like it to include an auditorium where the plight of document challenged immigrants could be discussed and it will be a pedestrian friendly building which will serve to get people out of their cars and walk over for their spirits. This idea should appeal to everyone and the best part is, it will include a tax abatement status for 15 or 20 years during which time there will be a liquor store there that would not otherwise have been there. How does everyone like my idea?

by fredo on 12/18/2012 @ 4:54am
According to the News Tribune, the city isn't going to provide this land for the Asia Pacific development, so for now we aren't going to be entangled with this group. 

by cisserosmiley on 12/18/2012 @ 8:33am
"...move city hall out to the outskirts of downtown..." BEST IDEA EVER Erik.  Metro Parks did it, TPU did it, solid waste did it...now it is time to build a new city center outside of dumb-dumb downtown.  Just think, the old Elk's was one of the places city hall would have been built without misguided downtown-centric misspending...