More on New London: What can Fix a Downtown?
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Incentive Taxation

More on New London: What can Fix a Downtown?

After the election of Daryl Finizio to the mayor's office in New London, CT, The Day, the local newspaper offered an opinion by David Collins on the lack of activity in New London's downtown - after heavy government spending on a refurbishment of the city square known as "The Parade" - most visible in the boarded up storefronts on the main Streets in the downtown (State and Bank). 

48 State Street, New London, CT
Mentioning that New London's land value tax proposal is part and parcel of a downtown revitalization plan Mr. Collins referenced 48 State Street in particular as an indicator that something more - a tax on shuttered shopfronts -  could lead to action on the part of the absentee landlord.  While sticks are part of the toolbox for improvident areas, carrots would make sense in hard times, where competition for capital is at a premium.

Yet, a land value tax itself would lower the tax bill for this property, by hundreds of dollars in the first year of implementation ($450), and these savings would only increase with  greater reductions in the building tax.  These savings would be permanent and revenue-neutral to the city. 

More important, every improvement the owner has made to the building results in higher taxes. That's the opposite intent of any incentive to fix up an old building (1889) that likely needs lots of work.  With fewer penalties in capital investment, the owner can not only fix up the building, but charge lower rents while preserving his needed margins.  That would play out for most buildings - shuttered or not - in New London's Central Business District.



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