COLUMN: Carrots, sticks and empty buildings

The mayor and I recently participated with Chamber of Commerce staff in a webinar on filling empty downtown buildings.

The mayor and I recently participated with Chamber of Commerce staff in a webinar on filling empty downtown buildings.

One take-away was the need for small communities to be wary of solutions designed for big cities. Tax breaks and economic improvement zones are often touted as a panacea for attracting new business, but there’s little evidence to suggest they work in towns with essentially a single commercial district.

There are many reasons why someone would want to open a business in Summerland, and the prospect of tax breaks comes far down the list from things like quality of life and commitment to the community. At best, tax incentives would be seen as ‘icing on the cake’ —  and icing is meaningless if the cake itself doesn’t taste good.

There’s also the principle of fairness. There are 75 occupied storefronts along Main Street and the downtown portion of Victoria Street, compared to eight unoccupied. These 75 businesses, none of which received incentives, would end up subsidizing through their taxes potentially eight new competitors.

I believe it’s better to use the tax system to bolster the business community as a whole. Summerland’s business tax rates had previously been 2.8 times the rate of residential, while the provincial average is 2.6. Effective this year, Council shifted Summerland’s business-to-residential ratio to 2.5.

Council has also introduced an annual budget for keeping downtown tidy and attractive, and work will start on a downtown plan to realize the vision of a more people-friendly and vibrant core. Municipal bylaws should also be reviewed to ensure they don’t impede businesses’ own beautification efforts.

Most businesses and property owners are mindful of the need to improve the attractiveness of their buildings. However, there are issues with absent landlords who have little connection to the community and view their properties as nothing more than line items on spreadsheets.

During the webinar, we heard how one-third of the buildings in downtown New London, Connecticut (pop. 27,000) sat empty largely because of absent ‘land-hoarders’. The local council introduced a higher tax rate for vacant buildings, making them too expensive to keep unoccupied.

Not many pundits talk about using a ‘stick’ approach to fill empty buildings but it seems to work better than most ‘carrots’. Penalize property owners for vacant storefronts and you will start to see a rental price readjustment. People with a panache for specialized products and niche markets can then start thinking seriously about opening a business.

Budding entrepreneurs may need a bit encouragement. The webinar heard how Webster City, Iowa (pop. 8,000) organized a public tour of 12 empty downtown buildings. Real estate agents provided details like square footage while retired business people talked about the building’s past and imagined what it could be in the future.

Perhaps our local realtors could organize an open house of Summerland’s eight empty downtown commercial spaces. Besides sounding like fun, it could have a lasting impact. Soon after the Webster City tour, 10 of its empty buildings found tenants.

Doug Holmes is a Summerland councillor. The views expressed by the author are his alone and do not necessarily reflect council policy.