Tax break has dubious dividend

Let free market work in Short North

It’s hard to make a case that the owner of a $52,000 home on the South Side who pays his full property taxes should subsidize a swank $16.6 million office redevelopment in the Short North — where sales are hot, land is scarce and property values are skyrocketing.

Hard, but not impossible for Columbus City Council: While a citycommissioned study released earlier this year found that developers don’t need incentives in desirable areas of Columbus, this part of the study was referring to the residential market. Absent incentives, office and commercial development is less profitable and less likely to happen.

Still, the math seems curiously lopsided on the abatements negotiated by Mayor Andrew J. Ginther’s administration and approved in a 6-0 vote by the council. (Member Elizabeth Brown abstained because her husband works for the abated company.)

The Pizzuti Companies will get a 10-year, 75 percent tax abatement worth $3.1 million to redevelop a long, squat building at the corner of High Street and First Avenue, the former Grandview Mercantile/ Revue consignment shop, into a four-story retail/ office building.

It will have underground parking for 34 cars, an important amenity in an area where the administration and city council have created a parking nightmare by approving more high-density developments — often with abatements, suspending the required number of parking spaces, and enacting an unrealistic street-parking permit system that frustrates business customers, employees and residents.

So the solution to this mess, which chases away office development, is more giveaways.

For other taxpayers subsidizing the developer’s $3.1 million abatement, the city gains 25 new full-time jobs with a $1.3 million annual payroll. Columbus has a 2.5 percent city income tax, so these jobs would add $32,500 a year to city coffers; this totals $325,000 in city income taxes over the 10 years during which $3.1 million in county property taxes are being forgiven.

That’s some nifty math. No doubt, the city sees a longer-term payoff in keeping this prize neighborhood robust.

So we’re expending roughly $3 million to subsidize office jobs in the hopes that those 25 workers and any of their potential business customers will patronize area small businesses, swell lunch crowds and create a vibrant daytime atmosphere in a neighborhood that is hopping evenings and weekends.

It would make more sense for taxpayers to give the small businesses that need a lunch crowd a direct grant; even a few thousand dollars likely would save some from closing. And surely, this rare valuable swath of High Street land would still be redeveloped without abatements.

City Hall’s goals are commendable. It aims to create a vibrant 24-hour neighborhood. But the Short North hardly suffers for lack of development. Taxpayer-subsidized abatements would be better applied to a struggling area, such as the South Side or Linden.

If the Short North property values are too high, and the parking too scarce to attract offices and commercial businesses, the free market should be left to solve that problem by luring businesses to neighborhoods where development is cheaper — and much needed.

It’s time to close the city’s candy store in the Short North.