According to
this story...
The value of the East Silver Spring Drive business district has shot up, which not only counters public perception about its value slipping but frees up more money to enhance the street, village officials say. The Silver Spring business district's value jumped 49 percent in the 2007 revaluation for property tax purposes..
"It really shows how strong the economics are along Silver Spring Drive," Grassman said. Even though there are some empty storefronts at the moment, the rents are high and that is what drives the high assessments, he said.
The higher assessments mean that the village can expect to use $911,000 next year for district enhancements such as streetscaping, Grassman said.
Well, generally speaking, high value and high assessments would be a good thing. But aren't commercial properties valued, at least in part, on the revenue upon which the land/buildings can create? Why then, if Silver Spring is so highly valued, are businesses closing?
It's ironic that the logic used for high assessments is that high rents drive them. We certainly know WFB (and many suburbs) have a high real estate tax burden. Which came first, the chicken or egg? Rents are high because taxes are high. Now assessments are higher, forcing taxes higher, forcing rents even higher. Quite a cycle.
I firmly admit I'm no real estate expert. But there's something wrong when a street with an "astounding" increase in value is being vacated like a sinking ship. Did the firm doing the re-assessments notice all the empty store fronts? Did they do the valuations before or after Famous Footwear, Talbot's, Armin-Koch, and Murray's closed their doors? These businesses didn't close their doors for fun. They did it because it became less and less profitable to do business on Silver Spring.
Further, while high assessments, and therefore, high real estate taxes, benefit the residents of Whitefish Bay, it just got that much harder to do business on Silver Spring. This $911,000 isn't “new” money. It simply means the businesses along Silver Spring will be paying a larger portion of the WFB tax levy. And sure, perhaps that revenue is earmarked for streetscaping, so that's good. Unfortunately, the extra million in taxes the businesses will pay, may run a couple more of them out of business!
Plus, of course, these taxes filter to high rents, meaning all the new businesses we need will be more hesitant to locate on Silver Spring. As I said in this entry, a restaurant owner looked at the Talbots/Famous Footwear location and turned it down due to excessive rent demands.
So .. while increasing property assessments generally point to a good times, I think it just got a little tougher to salvage the street.
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