Downtown Retail Incentives

[tufsu1]

Apparently Orlando is implementing some cash incentives to attract retail downtown

http://www.orlandosentinel.com/business/os-downtown-retail-incentives-20101206,0,6429602.story

[thelakelander]

Orlando has been handing out incentives for quite a while.  A couple of years ago, they gave a boat load of cash to convince Publix to open near Lake Eola.

[fsujax]

is it working?

[thelakelander]

Compared to Jacksonville?  Yes.  Their downtown is much smaller yet there are a number of uses that have been coordinated to be clustered together, creating a vibrant environment that can support nightlife, entertainment and complementing retail.

[BigGuy219]

This is the way to do it.

A brown paper bag filled with $100 bills to the right people creates development greater than any other force on earth.

[thelakelander]

It will be interesting to see what happens with Church Street, with the opening of the Magic's new arena.  When I visit my parents for Christmas in two weeks, I'll get some pics.  

[ronchamblin]

    Incentives and Ranting.  After having my feet on the ground in the city core for almost three years, I have some thoughts regarding the idea of city incentives for businesses attempting to open and survive within the city core.  The following is a bit of evidence that there has been no valid comprehensive plan for revitalizing the city core.  One bit of evidence is that there are no property tax abatements for those of us who invest and take risks as we endure, during the apparently "early" stages of revitalization, the low foot traffic in the core.  For example, my property tax increased from about $11,000 in 2006 when I purchased my building, to the current over $17,000.  While observing businesses attempting to survive with the low foot traffic, which is a condition that my operation is slowly affecting in the positive direction, I would have expected that the city would have realized the value of a property tax abatement to any new business, either a 50% or a 100%.  I purchased my building for $930,000 in January 2006, and invested $600,000 in renovations, and during the process borrowed funds from banks.  To insure the survival of the operation, I've worked seven days per week since opening.  I have not yet had the funds to pay my 2009 or 2010 income taxes.  I am catching up on my property taxes however.

     If my Roosevelt operation had not been enjoying good business, allowing funds to be funneled to the Laura Street store, the Laura operation would have closed - the front would now be boarded up with graffitied plywood again.  Fortunately the Laura business creeps upward... steadily.  There will come a point at which the Laura store will achieve a strong position, especially as the overall population of workers and residents increases in the core area.

     The point is that most businesses who attempt to open in the low-foot-traffic city core may not have the backup funds I've had during the crucial years of start up.  The current unfriendly city core environment, due in part to the lack of any property tax abatement, will kill most businesses during the first two or three years of opening.

     A quick digression from my rant.  My experiences with the building permitting, building inspection offices, code enforcement, and fire department code enforcement etc.. were all positive.  These individuals were fair and quite helpful.  Be reasonable with them, and they will certainly be reasonable with you.  If you initially position yourself in an oppositional stance, then you may in fact be opposed because of it.

     Back to rant.  The fact of no tax abatements for businesses attempting to make a go in the city core, taking the risks at the front lines so to speak, indicates that there is either no desire for positive action among those making the decisions affecting city core revitalization, or, assuming there is a desire, then there is a good measure of stupidity.  It is as if we business people, who endure the current low foot traffic in our city core, are the infantry, in the trenches, placing ourselves at risk of death while we attempt to accomplish much needed victory, and the fellows in the soft chairs, somehow oblivious to the reality of the battle, fail to send us enough ammunition.  What da #*@& is going on here?  Is anyone thinking in city hall.

     There is further evidence of a conspiracy to push all businesses out of the city core.  Get this. Somebody in JEA, late in 2010, somehow got the idea that I was about to make it through the ordeal of surviving in the city core.  Apparently they said.. "Hey, wait a minute, Chamblin's might make it, they might survive.... let's see what the #*+@ we can do about this."... So they increased my JEA deposit from $2,000 to $9,100.... knowing that I've paid every penny I've owed to JEA during over thirty five years of being in business.  I diverted money scheduled to pay property taxes to the JEA deposit, wondering why they need to hold about $285,000,000 in customer deposits in the first place.  A logical person would find themselves wondering just what in hell are the powers at be attempting to do to those of us who are sacrificing all assets, time, and energy.. to make a go in the the city core.  Again ...  what da #*@& is going on?  End of rant.  Thank you.         

Oh .... almost forgot.  Give a man a fish, and you will feed him for a day.  Give him a religion, and he will starve to death while praying for a fish.

[dougskiles]

Ron, it was good to meet you last week during lunch.  I really enjoy the food and atmosphere.

[ronchamblin]

Thanks Doug.  Is good to know who someone else is on MJ.  I only knew of Mr. Dare.  Hope you can come more often.  Our soups and stuff gets better and better. 

[urbanlibertarian]

Ron, I can see that you and other businesses need to be able to keep more of your gross receipts but is there any thing the city could do to help that wouldn't involve taxes?

[ronchamblin]

Absolutely Urban.  Actually, I'm optimistic that some of the things that should be done, will soon be done, as I sense it is improbable that the critical issues to core development can be ignored much longer.  I am going to attempt to devote more time and energy to focusing in a positive, non-ranting, way on identifying some of the most pressing issues.

I might mention that the project of the new convention center, although needed, is a no brainer.  It is easy, and took very little vision or creativity.  I'm not impressed.  My concern is that we will "do" these easy projects; i.e. Prime Osborn, the Skyway, thinking that we are making a big impact on city revitalization by these actions alone, while ignoring the subtle but powerfully important issues which, lying hidden from easy view, escape solution, and therefore perpetuate the stagnated condition we've all seen for much too long. 

I'm wondering if it is practical to begin a mechanism within this forum that will, in a structured way, discuss the issues seriously, with the objective of reaching a point of agreement of what important actions must be taken, and then to have someone or some group, convey this agreement to whoever can facilitate the action.  This could be done to the point of refusing to accept complacency, or a condition of being ignored, by those in the decision making process; that is, about whatever critical action items we have agreed upon. 

But .....I focused on the property tax in my rant because it seems to be an easy no brainer; that is, to have some of the burdens endured by the city core businesses, shared by those in the suburbs.  The suburbs will benefit also by the existence of a vibrant city core.  The decision must be made.  Do we, or do we not (the majority of voters), want a vibrant city core?  I think that one of the most important objectives is to convince the majority of voters that it would be a great benefit to all people within northeast Florida to have a vibrant city core.  I have seen no real campaign to accomplish this convincing process.  This is amazing.

[dougskiles]

IMO, the first step to improving downtown will be to stop subsidizing surburban development.  The Mobility Plan will accompish this at no additional cost to the city.  The second step comes as a result of the Mobility Plan - and that is to improve access to downtown with a functional transit system (i.e. Skyway, streetcars, commuter rail).  The more people who come downtown by transit means more walking, which in turn leads to more activity on the street in stores and restaurants.  I feel that the number one killer of downtown has been the parking garages and surface parking lots.

[simms3]

Originally, I thought the city should look into setting up Tax Allocation Districts, especially one for downtown.  It would freeze property taxes in an area and make it easier to float bonds to support new developments in struggling areas.  Without going into details, Atlanta has set up 10 of these districts and boosted their tax base by hundreds of percent in most of the areas currently set up with a TAD.

However, our property taxes are already too low.  Therefore, I agree with you Ron, we need to be selective and set up abatements for small businesses opening up shop (and perhaps a TAD in parts of Riverside, Springfield, NW Jax, and Arlington).  Jax needs higher taxes overall in the city with freezes and abatements in select areas and for select individuals/businesses.  It should be easy (it has been easy to do similar things in literally every single other city).  Of course, I would not hold my breath for any simple solutions in Jacksonville.  For all these trips to other cities and the resumes of the Chamber people, one would think someone out of that whole bunch could push to set this kind of thing up after seeing it everywhere else.

The leaders in Jacksonville do not ever think past their short noses and when they smell money it's time to go running.  Hiking up and imposing fees to get more money is one thing; having a decent tax level that remains constant and is easy to figure out is quite another.  I would rather pay a constant ~30 mil property tax without a million loopholes and stipulations than pay a 15 mil tax with fees and upcharges coming at me from all different directions to 10 different authorities.  FTR, Atlanta's millage rate is around 44 or 45 and the city seems to be growing by leaps and bounds still (and attracting corporations).  Small businesses aren't scared away by city leaders and large companies have more to work with regarding the general population.  Many of the small business owners (i.e. chefs and long time biz owners like yourself) are local celebrities in their own rite.

[marksjax]

Ron, any reason given why JEA set the deposit so high?

[ronchamblin]

     There is a policy Marksjax for establishing deposits.  If a customer is late in payment, or if they have their power cut off, points are deducted from their credit rating so to speak.  If the rating drops below a certain figure, then JEA has established the right to increase a deposit to twice the average monthly bill.  My average must be about $4,400 or so.  For 34 years my deposit was set at $2,000.  According to JEA policy, they had the right to increase my deposit to $9,100 or so because I was late several times during my renovation project downtown from 2007 through 2009, when I was paying out many thousands of dollars per week to pay contractors etc.   There was one semi-chaotic time when I simply did not open my mail, on the run with work etc.,  forgetting to pay the bill, and they cut the power completely at the Roosevelt location.  No warning.  I thought it was perhaps a traffic accident causing an outage.  In this instance I had the funds to pay, but not having an employee to do these things for me, I simply forgot.  Took at least five hours to get the power turned on.   

     So..... yes there was reason for the increased deposit.  Is the deposit policy appropriate?  Is the whole concept of having a $285,000,000 fund of customer deposits on hand necessary?  Are all 500,000 or so JEA customers going to go out of business or depart the area at the same time, and therefore put JEA down?  A reasonable deposit fund is needed to cover the occasional business failure, or to cover the quick exit of a fugitive resident etc.

     A deposit fund is needed to cover what would otherwise be losses inflicted on JEA as a result of business failures and resident area departures.  However is a deposit fund exceeding by perhaps $200,000,000 over what is needed to protect JEA from a few customer defaults really needed and appropriate?  Is this fair to customers?  Is it legal?  Is it a subtle form of trickery...of taking money unfairly from customers?

      Those in power sometimes allow themselves to slide into subtle forms of abuse, if only by carelessness in policy.  Those in a position of performing in a somewhat opaque environment, such as "some" attorneys who work behind the scenes, perhaps charging 40 hours for 4 hours work, are able to gain without cause, thereby abusing their professional position... fleecing their customers.  Is JEA transparent.  What is done with these huge reservoirs of deposits?  Where is the money now?  Can I see it? 

     Surely, perhaps only $60,000,000 in customer deposit reserves would protect JEA from any losses from business failures and resident payment defaults.  How transparent is JEA.  If I have the time tomorrow,  I think I will walk down to JEA and take a detailed look at their books.