Tuesday, June 7, 2016

If I Were Mayor Of Greensboro: Part 12

This is part of an ongoing series of posts that begins with If I Were Mayor Of Greensboro and is linked in succession back to here. If you haven't already, I recommend you read them all before continuing.

 I am a firm believer that if we are to save ourselves we must look beyond partisan politics and concentrate on what is right and wrong. Partisan politics only serves to divide us-- to keep us from finding and implementing solutions to our mutual problems. I also believe it is very wrong to tax the poor and working classes in order to subsidize the incomes of the rich so that those same rich may profit by taking from the poor.

And yet that is the very "economic development" model Greensboro has used for decades.

In Greensboro, the City Council votes to give taxpayer dollars to developers in the form of incentives, grants and loans so that those same developers can profit from renting buildings to restaurants, shop keepers, service providers and small manufacturers in perpetuity, knowing full well the vast majority of these small businesses will fail. According to the 2010 Action Greensboro funded, Moser, Mayer, Pheonix Associates, Greensboro Downtown Economic Development Strategy which stated:

“Retail rents cannot fully support the cost of rehabilitating blighted buildings… Absent financial intervention, storefronts will remain vacant or will attract tenants of marginal quality and with a high probability of failure.”

But even if we give money directly to the small business owners there's nothing to prevent landlords from jacking up rents or simply forcing them out to build a new project. The end result will be the same. A small business owner who doesn't own the property his or her business is located on and in, is in constant risk and always pays more than those small business owners who own their own properties.

And when a small business moves out of a rented building, everything that business has invested in that building is a complete loss, so even if the City of Greensboro gives money directly to small business owners the current system is a complete and total loss in the long term.

We must start thinking long term. Those who lead our city today have never taken a long term approach to solving our problems. They'd rather keep the bankruptcy auctioneers, foreclosure attorneys, and other vultures in business.

The long term solution is to put the owners of Greensboro's small businesses into buildings they, themselves own.

The average lifespan of a Greensboro business is less than 5 years. Even the successful or seemingly successful Greensboro businesses rarely lasts over 5 years. And yet Greensboro is filled with businesses that are 50, 60, even 100 years old or older with all those older businesses having one thing in common-- they don't pay rent.

How can a business possibly be competitive when 25% or more of its gross revenue goes to paying rent? Add to that, these same businesses are paying taxes that are being used to subsidize their own landlords.

That's what keeps Zack Methany and Downtown Greensboro Inc in business-- paying taxes to subsidize landlords who collect rent from those who pay the taxes. It's a miracle downtown survives at all. It's a miracle any of Greensboro survives.

So what do we do about it?

Well the law won't let us take these buildings away from the landlords unless they fail to pay their taxes but we could stop incentivizing landlords and incentivize only those businesses who own or are in the process of buying their own buildings.

We could also change zoning laws so that when properties change hands the zoning becomes owner occupied, no business rentals allowed. Yes, exceptions could be made for upstairs residential and multi-use as long as the primary shopkeeper keeps his or her shop in said building.

We can't take properties away from these commercial slumlords but we can take much of the profits out of what they do simply by refusing them money.

These are just ideas, the final rules and regulations need to be written but by stopping the needless give-aways and focusing on where the money should be spent we can turn Greensboro around and become the kind of city people want to move to instead of the kind of city people are leaving in droves.

Stay tuned for If I Were Mayor Of Greensboro: Part 13