The Flatiron Building: Revitalized by investment, not abatement.
The city of Rochester New York and the County of Monroe have been facing challenges in keeping both commerce and population over past two decades. Nothing is really stopped capital and human flight. it's great essence, the Kodak Corporation, has been reduced to demolishing its buildings to save on taxes and ensuring cash flow by selling off its patents.
Like most troubled regions, tools for renewal follow fairly standard script: put together a redevelopment authority, receive land from corporations (who get a tax break), and offer tax abatements and other sweeteners to entice employers. As the story unself-consciously points out, the millions of dollars in tax abatements will provide 4 jobs here, 19 jobs here, and 13 jobs there. We'd assert that's not much ROI considering the desperate need all over New York State for markets to work, instead of quasi-governmental authorities.
Sometimes it works, sometimes doesn't, yet few question the reason behind throwing tax breaks like candy: it's the tax system. Monroe County has one of the highest property tax burdens of any place in the United States. Other places like Westchester County New York are higher, but they have the earners and the location to make it work (at least for a little while longer).
Not only that, the sales tax is 8%, and the New York income tax after a rate reduction this year is in the neighborhood north of 6%
Bottom line, it's hard to make a buck in central New York State and harder to keep some of it in your pocket.
It doesn't have to be this way. Rochester was recently provided a land value tax study by the Center for the Study of Economics that gave an overview of what such a tax shift would look like. Depending on the model used, taxes for homeowners and small business would've dropped while keeping revenue streams neutral.
Local developer Paul Kramer has been asking for a serious study of the land value tax for years when he decided to plunk down his money to enter a dis-invested neighborhood and rehabilitated the Flatiron building, which proved to be a small private market anchor for the area. For Kramer's temerity in investing in the building, his taxes skyrocketed. Ergo, he saw the value in land value tax.
Paul Kramer: Not Tilting at Windmills
If only the decision-makers in Rochester and beyond could see beyond doing the same thing over and over and expecting a different result, while New York, the Empire State, slips just a bit more each year.