Marketplace, not government pressure, should guide future of tax-free properties - The Buffalo News
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Marketplace, not government pressure, should guide future of tax-free properties

We don’t know that the idea will help in his re-election bid, and if the idea plays out, it won’t be anytime soon, but give this to Chris Jacobs: He’s identified an issue that, if resolved, could make Buffalo a stronger city.

Jacobs is county clerk and, given the odd fit between his job and the proposal he has floated, he is a county clerk itching for another job. But regardless of his motivation, Jacobs is playing an intriguing game of mental chess with elements of the city’s business and nonprofit structure and coming up with a vision that makes some financial sense, but may not ever happen and can’t be forced, anyway.

The idea, in a nutshell, is to move non-taxpaying entities off of high-value, often historic properties downtown to rundown areas on Buffalo’s East Side, thereby freeing up buildings that could be converted for taxable use and simultaneously injecting new life into the city’s struggling East Side. The practical problems with the idea are rife, but there is also the uncomfortable feeling that Jacobs apparently believes that the property occupied by some nonprofit agencies is worth more to the city than the selfless work they do at those sites.

Some of the entities Jacobs has his eye on are the headquarters of municipal agencies such as the police and fire departments, but others are nonprofit businesses, some of which helped to stabilize the city during its down years and now deserve some recognition for that fact. If they don’t pay taxes now on high-value properties, they maintained those properties when the city was on its knees. They have already made a difference by preserving some of the city’s beautiful and historic architecture.

Still, with land values rising in Buffalo – and almost certain to continue rising as the Buffalo Niagara Medical Campus and the Buffalo Billion economic development program exert their salutary influences – the potential gains to those nonprofits from selling their current locations may become increasingly and irresistibly attractive.

Imagine the revenue that could be produced by selling some of those mansions along Delaware Avenue’s Millionaires’ Row – revenue that could be used to further the missions of those nonprofit agencies. Simultaneously, their migration to the city’s East Side could help to stabilize and bolster those underdeveloped neighborhoods. And, in the meantime, the downtown locations could be returned to the city and county tax rolls, there to help underwrite the costs of managing a populous county and New York’s second-largest city.

It is a little odd that a conservative Republican such as Jacobs would make this pitch, in effect seeking to pressure private entities to sell their properties for the benefit of the city. It would be more in keeping with Republican orthodoxy to protect property owners from government pressure to make business decisions that might not suit their needs. In the end that doesn’t matter, because only market forces will influence business decisions as consequential as those Jacobs proposes. At some point, the land may become so valuable that a prospective buyer will make an offer those nonprofits can’t refuse.

Obviously, we are not yet at that point. If we do get there, it should be because developers and property owners reach agreements beneficial to both, not because of government pressure. When and if the time is right, such transactions could make a difference in the city’s economic health.

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