Island Talkback: Parcel tax mediator’s final report
Almost one year ago, a number of business owners, real estate professionals, and association presidents were asked to attend a meeting to discuss the possibility of building a coalition that would address the financial issues facing the Alameda Unified School District and to attempt to develop a consensus around what type and amount of parcel tax would be acceptable to the business community. This coalition became known as the Alameda Business Alliance.
The business associations that participated in the discussions were the Alameda Chamber of Commerce, the Greater Alameda Business Association and the West Alameda Business Association. There were also individual small business owners and a number of real estate agents who provided the voice for residential, commercial, and triple net lease business interests. It should be noted that neither Alameda Towne Centre, the Oakland Raiders, nor any other large commercial interest participated in or influenced the ABA discussions.
THE TAX STRUCTURE
The ABA studied both the building square foot taxing metric and the need to limit the total tax collected from each business in order to protect the smaller to mid-sized businesses that operated in larger buildings. The necessity of providing some protection to these mid-sized businesses was of paramount importance, because the ABA did not believe there was a direct correlation between the size of a business building and the ability for the business to pay a larger tax.
Perhaps the most dramatic example of this assumption is the Collins property located at the corner of Clement Avenue and Oak Street. According to the Alameda County Assessor’s records, the property contains 124,066 building square feet. This property is currently vacant, and the assumption is that it is not producing any income. The uncapped assessment for this property would be $39,701.
There are smaller hotels, partially vacant smaller office buildings, and privately owned senior housing facilities that would benefit from having a cap on the maximum parcel tax any one business would pay. Unfortunately, due to the severe state law limitations on how parcel taxes can be structured, it is not legally possible to base a parcel tax on either the value of the building or the income produced from the operation of the business.
Alameda Towne Centre has been the focus of some discussion relating to the cap. While many of the 15 parcels that comprise the Centre would pay the full 32 cents per square foot assessment, the largest parcel would have its assessment capped. However, it is not just the owners of the shopping center and big chains that would benefit. Small local businesses like Loard’s Ice Cream, the Alameda Credit Union, Modern Mouse, and other small businesses will be assessed at a lower rate.
THE TAX RATE
After receiving tax scenarios from the District, the ABA found that a 32 cent rate with a maximum tax of between $7,000 and $7,500 would protect the majority of medium sized businesses from severe economic harm and not shift any appreciable amount to the remainder of the business and residential groups. For a business that has 3,000 square feet of building space, this parcel tax rate resulted in a tax obligation under $1,000 a year or about $80 per month.
While the ABA did not represent every business in the city, it represented a very broad cross-section of business interests. More important, these diverse business interests were willing to come together, work collaboratively, and contribute to the community dialogue that resulted in Measure A, demonstrating that when people work together anything is possible. As of the date of this report, the three business associations (Chamber, GABA, & WABA) that participated in the ABA discussions and represented primarily small and medium size businesses voted to endorse Measure A.