(From a Facebook Post: Aug 28, 2021; unedited)
How do you help businesses without cutting taxes?
There are a few ways so let's discuss.
Lethbridge small businesses shoulder a massive portion of the property tax burden in Lethbridge due to the fact that a lot of major research/public/crown property exists. (For example the college, university, city admin buildings, public assets like CASA and YMCA, Provincial buildings, and federal buildings/research stations) don't pay property taxes but do take up large part of city landmass.
Usually the province provides a "grant" to city coffers to account for these buildings taking up city space but with COVID, the grant that usually helps offset the lost tax revenue from these structures was cut by the province.
This puts a lot of pressure on municipalities who now have to deal with budget shortfalls. Fortunately our current city council reopened the budget and made sensible adjustments.
But it's for this reason: the lack of certainty from the province that these lost revenues will be made up in future and the looming recovery from COVID that makes the promise of cutting property taxes in Lethbridge not only impractical, but irresponsible to be promising at this time.
I don't make promises I can't keep, and I don't think cutting taxes in the middle of an economic crisis is right for the community.
As a small business owner, however, I do appreciate that not giving small businesses a break is hurting them too. So, what do we do?
There are a few ways the city can help our small businesses: not by cutting taxes, but by helping with resources and changing a few things.
1. Let's change how commercial property tax works:
At the moment, our tax system disincentivizes beautification and investment because if you raise the vlaue of your property you get taxed higher because our taxes are based on the net worth of the property. The nicer the property = the higher the taxes.
This leads to property owners allowing their structures to fall into disrepair and incentivizes poor upkeep of buildings.
It's literally backwards.
We should be lowering property taxes and incentivizing investment in our commercial community.
2. So where do we make up the lost tax revenue?
You know those giant parking lots all the massive big-box stores have? I want to increase property taxes on those.
There's a bit of a process here so stay with me.
The City has a land use bylaw that has something called a minimum parking requirement. The formula for this was developed in the mid 1960s and uses the square footage area of a building plus the type of business to determine how many parking stalls they are required to provide.
So a lot of that parkinglot sprawl that goes 2/3rds unused MOST of the time? That's baked into our bylaws.
Ignoring the environmental impact here for a second (it's atrocious) we have had a solid 60 years to realize this amount of parking sprawl is horrendously expensive in other ways. Larger city centers like Edmonton and Vancouver have done away with the bylaws requiring these massive investments in asphalt and moved to a system called Open Option Parking: which allows the business to determine how much parking to provide based on real, practical need, not some old formula.
So to justify taxing the asphalt deserts we need to remove the requirement for them. This gives the property owners the opportunity to increase density and utilize space on their property for more economically justifiable pursuits. This creates more density for business and increases our economic tax base.
Or they can keep the parkinglots: and we can tax them on it. This will earn the city more tax revenue to deal with the environmental disaster that sprawl causes.
3. On-street parking in commercial districts...should not be free, sorry.
Here's the thing. I know this opinion is unpopular, and a lot of my fellow business owners are probably really frustrated by this viewpoint, and you absolutely have a right to that viewpoint.
But free parking downtown isn't going to solve the issues. Rather it's a bit of a red herring. Instead, if we focus on increasing the walkability and desirability of the downtown we will get a lot further.
If we remove paid parking in the downtown (with the exception of crisis management like during covid, that was definitely a good call) we incentivize people to park for their work days, making parking limited for customers coming and going throughout the day.
Here's the thing though: PARKING IS FREE AFTER 5 PM.
If you are downtown retail business and you want your customers to have free parking PLEASE FEEL FREE TO BE OPEN BEYOND 5 PM.
Seriously it would be AMAZING as someone who wants to go to dinner downtown to have a few shops I can check out while I am down there!
Then the downtown brz can even advertise free parking after 5 and drive a lot more customers downtown for evening spending.
(Continued from a Facebook Post: August 29, 2021l unedited)
Alright! Last night I posted a few ideas on how to help local businesses without cutting taxes!
But I'm not done! Let me know what you think of these ideas:
4. Encourage the formation of BIAs + streamline the process.
What's a BIA? It's a Business Improvement Area: and we have one that already exists in the city. You know it as the Downtown BRZ (Business Revitalization Zone). The BRZ was initially formed by interested business owners in the 1980s. Since then it has operated as an advocacy group for businesses in the downtown as well as a comarketing/promotion agency for the downtown. And it's done a great job so far advocating for programs in the Downtown!
What's interesting to me is that no other business districts have formed BIAs in Lethbridge. The BRZ stops at the downtown core. It doesn't work on behalf of any other areas. So why is it the only one?
On a related note: myself along with some amazing neighbouring businesses in the Warehouse District - Lethbridge are in the process of putting together another BIA so we can have a voice at the table when City Hall starts work on the Area Redevelopment Plan for the area between Stafford Drive S and 13th St S. I am very excited for this project as it's been something I have been advocating and working on for almost 4 years.
Even this though, will be restricted within a geographic boundary. Other businesses may be left out and should be encouraged to get their neighbours together to form a BIA of their own. It's remarkably simple and provides opportunities for more input in economic development services and the redevelopment of established areas.
It's your seat at the table. A collective voice. It's surprising to me that there isn't more cohesive organization between businesses and I wonder if there is an opportunity for some assistance from city hall. A lot of times it's just about helping people know where to start: as simple as a page on the website with a link to resources. (I will include one on my website tomorrow if any business owners want to take a peek. The website is hichabito.ca)
Enabling businesses to create BIAs and help them streamline the process with readily available data would go a LONG way towards economic stability in Lethbridge.
5. Encourage mixed-use Commercial/Resdential Redevelopment in all districts & promote density.
Lethbridge's building pattern isn't sustainable. It's actually extremely expensive and contributes to our high property taxes in the city. I don't understand why we haven't built more infills with commercial/residential mixes but I suspect our development pattern has to do with our zoning codes.
I love Lethbridge, but if you look at it objectively, anything built since approximately 1960s was planned and based on the idea that you would have, and use, a car.
This type of auto centric design is most evident in the neighborhoods on the west side and even though we know it's extremely inefficient from a design and planning perspective, it's still being allowed to happen because the master plans for these areas were approved years ago.
Lethbridge needs to make an about-face and start focusing on building economically sustainable and environmentally friendly neighborhoods. If you'd like to know what that looks like google "15 minute community" and there will be a host of articles to help you out.
Density means more customers. Walkability/active transportation means people are saving their gas money to spend at local shops. Invest in projects that have mixed use.
6. ENCOURAGE LOCAL INCREMENTAL DEVELOPMENT.
What is incremental development?
It's allowing small projects to catch a break at the municipal level. This is a policy project that eases the pain of setting up a small business.
Often, when small businesses try to start up in the city, City Hall quickly becomes a frustration and a hurdle. It's hard to tell what you need to do first, and there aren't any good resources to help entrepreneurs navigate City Hall in an efficient way. Yeah, all the permits might be available online, but if someone's never set up a business before it's hard to know where to go and what to do and who to talk to.
It's needless added stress.
City Council could ask the City Manager to set up a team within the development office to help entrepreneurs navigate these systems smoothly. Instead of a burden/block/hurdle/frustration/anxiety-attack-triggering-location, City Hall becomes a partner in the early success of local businesses to get open, and grow.
There you have it. In combo with yesterday's post, there are 6 proven ways the City can support small local businesses and keep our economy viable.
What do you think? Where are your concerns? How can I help?