Lynn Rinaldi, who owns Paradiso and Izumi with her husband Corey Braver, will have to pay another $3,200 a year in property taxes under the city’s new Actual Value Initiative just for Paradiso’s building, she told the Daily News. That increase is among the worst in the city but it’s not out of the ordinary for Passyunk businesses.
In fact, small businesses like Rinaldi’s and commercial corridors in booming neighborhoods are getting slapped with a particularly high burden in this transition to AVI. That fact often gets drowned out in the debate by the flood of complaints from homeowners around here who are getting hit with massive tax increases.
So, if Passyunk’s commercial properties have to pay more, doesn’t that mean their assessment for the East Passyunk Avenue Business Improvement District will also go up? Not so fast.
The BID, which handles marketing and recruitment for avenue storefronts and organizes events like the car show and the upcoming restaurant week, is funded by a 20 percent assessment on the property taxes of each building along the corridor. The assessment is usually factored into the rent that landlords pay businesses. But even though property taxes are going up, the BID’s take won’t.
Renee Gilinger at the BID says the organization’s assessments are frozen at the 2009 rate until 2019, meaning businesses at least won’t have to pay more in that case.
That probably is little consolation to the dozens of business owners and landlords who will have to give the city hundreds or thousands of dollars more a year.
So, do you own a business or commercial property? What happened with your assessment, and what do you plan to do about it? Let us know in the comments or email us at email@example.com. Good luck, everybody.
UPDATE: Sam Sherman from PARC got in touch with us to tell us about his organization’s plight. Even though the group is a nonprofit, it pays property taxes on its 14 buildings on and near Passyunk, which have 25 apartments and 13 storefronts.
“As PARC pays the property tax for our buildings, I may have to increase rents to partially offset the tax increases,” he said in an email. “These increases undermine our mission to keep rents low for start-ups and to keep commercial tenants on the Ave. And it will have the same implications for the for-profit property owners as well.
“PARC’s tax bill will increase by 100%-140% depending on the millage rate. If the Homestead exemption is enacted, PARC’s increase will likely be the higher estimate of the 140% increase.
“None of PARC’s properties will qualify for the exemption. Nor do most properties on the Ave. unless the owner actually lives in the building.
He also expressed concern over the use and occupancy tax, which businesses pay based on the square footage they use in relation to the total property tax bill. That tax was just raised last year.
“What is most concerning is the increased property tax and by extension the U&O tax will divert financial resources from PARC’s ongoing initiatives related to community improvements,” he said. “These increases would be much easier to absorb if there was a corresponding reduction in the business privilege tax, U&O tax, wage tax….any type of tax that drives up the cost of owning a business in the city should lowered.”