Worcester Must Make Business A Priority
Hundreds of buildings in Worcester are vacant. A recent study by the Worcester Research Bureau revealed that businesses make up only 15 percent of the city’s tax base, which it needs to pay for critical services. Over the last 25 years the city has seen a drastic reduction in businesses, due in part to the dual tax rate enacted in 1984. As a result, an increasing number of buildings in Worcester are vacant, abandoned or deteriorating.
Other cities have experienced similar problems. After watching its downtown population decline steadily over 40 years, the City of Philadelphia decided to take action. In 1997, it locked in the assessed value of residential conversions at the predevelopment level for 10 years. In 2000, new residential units were built at this locked-in value. As a result, more than 8,000 new units have been added to the tax base. Now, with the abatement period over for some of the early adopters, Philadelphia is reaping the rewards of a larger tax base.
The city estimates that two-thirds of its recent development would not have occurred otherwise. It also estimates that the plan generated about $4 billion in economic activity and will lead to a $285 million gain over the next 25 years.
Closer to home, we have seen the benefits of a similar program with the Hanover Theatre in downtown Worcester. In this case, the property taxes have been held at the predevelopment assessed value for seven years. In addition, all permitting fees, which were approximately $200,000, were waived. The end result is a rehabilitated building that is heavily utilized within the community.
What Can Be Done
The Worcester Citizens for Business (WCB), a grassroots organization made up of residents and business owners focused on restoring economic viability to Worcester, recommends “the Philadelphia plan” as the first step. The program identifies districts that will fit Tax Incremental Financing (TIF) criteria and provides an important new tool in a concerted effort to attract and expedite new business development in Worcester, as well as encourage renovations and improvements to existing properties.
The WCB also aims to play a key role in business retention and expansion.
The horror stories of opening a new business in Worcester are many. Many businesses put off expansion and renovations for fear they will open a can of worms. It is important that existing businesses know that Worcester’s economic development office is ready and willing to play a vital role in this effort. From site search assistance to information on what financial plans are available, the economic development team is an important resource that remains unknown to many small- and medium-sized businesses in Worcester. That, combined with incentives like predevelopment values frozen for 10 years for all commercial construction or renovations and waived permitting fees, should encourage new commercial growth in Worcester.
The long-term goal is to stabilize taxes and restore city services by increasing the tax base and setting clear benchmarks for development.
This expansion can only happen if this community sees the value of its businesses, strives to be a city that is easy to do business with and can offer an attractive and affordable place to do that business.
Let’s work together to lower taxes for residential and commercial property owners and restore city services by expanding our tax base.
Bill Randell is a member of the Worcester Citizens for Business. He can be reached at Bill@advantagebenefits.com.
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