I see another store in town is going out of business. This leaves yet another mall on the hill with almost as many empty spaces as operating ones. Concurrently, another 20 acres of trees have been mowed down to accommodate a new store.
The usual reason given for having multiple vacancies while new spaces are being created is that the rents are too high. While that may be true, what is it that makes owners impose artificially high rates in order to vacate those spaces?
Maybe they’re getting more bang for their buck from an empty space than one with a tenant.
How? Here’s my theory. The largest percentage of blame goes to the tax structure while the secondary culprits are the permit, building and other regulatory departments in the cities and counties. Federal, state and local tax laws can make it more attractive for an owner to take the write-off (against other income) for his empty commercial rental than to have the income (and tenant headaches) it could produce. The higher the stated market rate, the higher the write-off.
Cities and counties haul in more in taxes, building and permit fees on new construction than they would on the fees imposed on the remodeling of an existing space. So they have no incentive to encourage re-use.
I would love for someone with more knowledge than I have on the subject to write an article (without the baffling legalese, please) explaining to the rest of us how our communities benefit by ghetto-esque shopping malls and main streets while the forested open spaces which attract the tourists are decimated for new square footage.
I’m not a wacko tree-hugger. I made my living in the construction and real estate fields. I get that you can’t save every tree. I also get that making our towns into eyesores with multiple empty business spaces is not benefitting most of us.
At the risk of being redundant, I will mention once more that we taxpayers are picking up the tab for the massive governmental regulatory structure which is probably responsible for most of the empty storefronts in our or any town. When an owner can jack the rent up to twice the going rate in order to claim a ‘loss’ on his tax returns, he’s gaming the system. Understand … I don’t blame a person for taking advantage of every loophole they can find; they’d be lousy businessmen if they didn’t.
I DO blame those of us who refuse to hold our government agencies and lawmakers to account, who blithely vote for every tax increase and proposition that comes down the pike.
From Congress down to the dinkiest town council, these are the people who make the decisions on how our tax dollars are spent and wasted. We pay every dime of every salary in every government job; shouldn’t we expect those agencies to operate like a business rather than a wind machine blowing our dollars across the landscape?
Leslie Baker is a native Arizonan who retired from the construction and real estate industries. She volunteered for over 20 years with various hospice organizations. She and her husband, Phillip Mojica, live in Linden.