Tax Land Not People  

Common Ground – NYC Scott Baker, President: SSBAKER305@YAHOO.COM http://www.commongroundnyc.org/

East Side Esplanade Gap Closure Proposal 11/07/2013

For a relatively small cost, East Midtown could have an enjoyable completed esplanade - a vital and safe passageway for bikers, park-goers, and other New Yorkers. This proposal does not depend on the UNDC, state or city funding. Our proposal would raise $200 million over 10 years, to fund the construction of a new Esplanade (aka Greenway) to run from the current north end of Glick Park on the East River at 38th street, to the south end of the Esplanade at approximately 61rst Street. It takes into account current cost estimates to complete this “last mile.” A proven approach to collecting money for infrastructure projects is one that also fosters growth - the Land Value Tax. This is a tax on land, not on improvements. The tax incentivizes landowners to build on underused land, or to sell to someone who can. Developers are rewarded for improving their sites by leaving those improvements untaxed. A new Esplanade would directly improve the neighborhood from 38th – 61st, east of Second Avenue, so this area was used when calculating the Land Value Tax to be collected. Different borders would yield different results. Examples abound:

- Collecting $2B in taxes from the Hudson Yards Project is funding the #7 train line extension, (http://www.crainsnewyork.com/article/20131014/REAL_ESTATE/131019954)

- A recent neighborhood tax proposal would have paid for maintaining the west side esplanade, http://www.dnainfo.com/new-york/20110812/chelsea-hells-kitchen/hudson-river-park-tax-plan-could-affect-more-properties:

The plan — which has to be approved by the City Council before it can go forward —…would have assessed a small fee of about five cents per square foot on property owners in order to raise up to $10 million a year.

There is ample evidence for substantial ROI in similar projects. This story on the booming success of the Highline, http://www.nytimes.com/2011/06/06/nyregion/with-next-phase-ready-area-around-high-line-is-flourishing.html showed:

…the High Line as a public park revitalized a swath of the city and generated $2 billion in private investment surrounding the park….Amanda Burden, the city’s planning director, emphasized the boost to property values, saying that in one building that abuts the lower section of the High Line, the price of apartments had doubled since the park opened, to about $2,000 a square foot.

At the Hudson Yards area, The NY Times (http://www.nytimes.com/2012/04/04/realestate/commercial/development-flourishes-in-manhattans-hudson-yards-district.html) reports:

…that more than 5,000 apartments have been built and more than $5 billion in private development has been invested in the area between 28th and 43rd Streets west of 8th Avenue since it was rezoned in 2005.

Clearly, property owners would benefit far more in the long run than they would pay out in the short run. Those who benefit from improvements should pay for them. Currently, the average tax paid on both building and land values is 4.69% for this area. The proposal seeks to increase the total tax by .32% to 5.01% (a 14.6% increase) but since the tax would be on land only, the land value tax would go up by .93% and the building tax by 0%. This would add $4.20/square foot to the total 4,765,802 square feet for all 38 taxable blocks in the designated area. We used New York City’s GIS mapping system (http://gis.nyc.gov/doitt/nycitymap/) and Common Ground-NYC’s proprietary database, with data from NYC’s Department of Finance, to calculate total square footage, total taxable building and land values, and the current tax bill and percentages paid.

NYCityMapEsplanade Gap ZonesClose the East Side Esplanade Gap 9/16

East Midtown Close the Gap Calculations

New Total

taxes

10 4.69% + 0.32% = 5.01%

200,000,000$

20,000,000$ 0.93%

4.20$

All blocks from 38-61, East of First Avenue

Comments Block #

Block Square

footage (not

including building

footage)

Total taxable Building

Value{BV}

Total Taxable Land

Value {LV} Current Tax Bill

Current %

paid in taxes

United Nations 1 1354 659,375 17,072,329$ 19,057,990$ 279,522$ 0.77%

2 1361 127,570 124,134,187$ 100,745,715$ 7,146,419$ 3.18%

3 1362 70,650 63,980,829$ 52,226,172$ 4,049,880$ 3.49%

4 1363 127,334 98,278,000$ 50,910,757$ 7,509,871$ 5.03%

5 1364 137,938 133,405,000$ 61,266,170$ 10,455,326$ 5.37%

6 1365 123,078 176,524,422$ 81,985,023$ 13,722,925$ 5.31%

7 1366 130,623 120,569,619$ 52,108,725$ 9,373,410$ 5.43%

8 1367 123,107 125,680,000$ 50,136,056$ 10,130,901$ 5.76%

9 1368 123,100 138,922,202$ 54,323,223$ 10,489,908$ 5.43%

10 1369 123,157 130,304,024$ 67,329,452$ 9,833,367$ 4.98%

11 1370 123,103 186,947,662$ 73,110,707$ 13,597,452$ 5.23%

12 1371 70,863 128,100,000$ 25,693,513$ 8,086,803$ 5.26%

13 1372 68,550 93,180,000$ 137,008,746$ 5,680,060$ 2.47%

Bridgemarket 14 1454 123,109 10,730,119$ 15,896,430$ 396,463$ 1.49%

15 1455 123,143 105,508,178$ 42,849,354$ 7,905,502$ 5.33%

16 1474 16,067 2,300,000$ 7,000,000$ 431,557$ 4.64%

Totals 2,270,767 1,655,636,571$ 891,648,033$ 119,089,366$ 4.68%

All blocks from 38-61, Between First & Second Avenues

1 944 122,890 157,598,093$ 63,600,434$ 11,406,946$ 5.16%

2 945 47,696 106,638,500$ 37,893,163$ 6,156,039$ 4.26%

3 1333 111,745 148,895,000$ 38,248,276$ 10,373,213$ 5.54%

4 1334 11,652 138,510,000$ 53,652,056$ 9,444,904$ 4.92%

5 1335 95,428 47,590,768$ 22,445,374$ 3,388,985$ 4.84%

6 1336 130,501 91,154,408$ 31,409,182$ 6,513,181$ 5.31%

7 1337 129,154 78,679,353$ 75,622,399$ 6,614,959$ 4.29%

8 1338 130,556 157,134,173$ 60,123,699$ 11,979,156$ 5.51%

9 1339 65,337 53,557,220$ 35,992,966$ 4,132,641$ 4.61%

10 1340 124,901 164,364,210$ 73,177,581$ 13,133,377$ 5.53%

11 1341 132,909 194,121,363$ 68,377,635$ 13,106,503$ 4.99%

12 1342 130,487 91,759,855$ 62,246,654$ 6,181,472$ 4.01%

13 1343 130,638 98,921,330$ 80,958,880$ 5,552,599$ 3.09%

14 1344 130,425 87,191,606$ 91,166,188$ 5,679,043$ 3.18%

15 1345 130,351 67,623,742$ 77,321,727$ 4,441,825$ 3.06%

16 1346 123,064 113,034,582$ 58,360,953$ 7,640,855$ 4.46%

17 1347 130,355 81,251,062$ 49,551,410$ 5,483,622$ 4.19%

18 1348 130,540 161,776,000$ 65,049,900$ 12,260,219$ 5.41%

19 1349 130,295 146,975,018$ 62,863,035$ 10,989,634$ 5.24%

20 1350 120,443 128,867,000$ 49,724,525$ 9,731,679$ 5.45%

21 1351 120,506 85,419,000$ 54,332,243$ 6,042,315$ 4.32%

22 1435 115,162 72,570,525$ 38,769,449$ 4,602,474$ 4.13%

Totals 2,495,035 2,473,632,808$ 1,250,887,729$ 174,855,641$ 4.69%

38 4,765,802 4,129,269,379$ 2,142,535,762$ 293,945,007$

Avg.

% 4.69%Grand totals

Current Avg. Taxes

Proposed Increased %

taxes

Block

count

increase on

land value

taxes alone

Years to pay off Esplanade

Cost of Esplanade

Amount to be paid in LVT annually for 10 years

Additional Cost per square foot of Land per year{