Hartford Business Journal

www.HartfordBusiness.com • July 15, 2019 • Hartford Business Journal 13 SPECIAL REPORT: CITIES PROJECT tion of old office buildings into new uses. But less clear is how Hartford should go about replacing more parking lots with residential or commercial development, or if demand for it even exists. Hartford's high property tax rate — 74.29 mills, by far the highest in the state — is a major impediment to ground-up development, and most newly built projects in the city require public subsidies and/or tax breaks. Efforts to force development — like taxing parking lots at a higher rate to make it less appealing to sit on vacant properties — would likely backfire on the city, leading developers to simply avoid Hartford, said Jonathan Putnam, executive director of commercial real estate broker Cushman & Wakefield Inc.'s Hartford office. Meantime, others say the city doesn't have enough parking, argu- ing Hartford is and always will be a commuter city, despite hundreds of millions of dollars in mass-transit investment in recent years, including a new bus line and expanded rail line. "We are the ultimate car culture," said Hartford City Assessor John Philip. "Everybody drives in from the burbs." At least two major new parking garage projects are currently in the works — a $39 million, 1,007-space garage at the corner of Washington and Buckingham streets for state workers, which is near- ing completion and doubling the capac- ity of a garage its replacing, and another $19 million garage on Clinton Street. Ironically, both of those garages are seen as catalysts for a long-awaited development around The Bushnell Performing Arts Center that would eventually transform acres of adjacent parking lots into high-rise apart- ments/condos, office and retail space. Competing with the burbs Hartford didn't develop its glut of center-city parking lots overnight. The city's decadeslong move toward catering to cars tracks with a nationwide trend since car ownership became ubiquitous in post-war America, with millions of people leaving cities for the suburbs. Hartford's population dropped by more than 36,000 between 1970 and 2000, almost a quarter of its total inhabitants, according to state popula- tion data. During the same period, suburban towns in Greater Hartford saw significant population increases. "It was a genuine fear that the cities were losing out to the suburbs, and the idea at the time was that we needed to be more like the suburbs in terms of having access to parking," Garrick said. Between 1960 and 2000, Hartford's ratio of off-street parking to building area ballooned by 208 percent, accord- ing to one of Garrick's studies. Hartford is far from unique in this respect, said Jeffrey Tumlin, principal Are parking lots undervalued? A proposal a few years ago to begin taxing land in Hartford at a higher rate, while assess- ing a separate, lower tax on property (a land value tax) was dropped after it failed to gain momentum. But there is some sympathy for the idea that surface lots in the city are undervalued and under-taxed. Michael Freimuth, executive direc- tor of the quasi-public Capital Region Development Authority (CRDA), said policymakers should revisit the idea of tinkering with parking-lot tax rates. "[Parking lots are] not being taxed based on an income-based model, they're being taxed on a vacant land model," Freimuth said. "And the reality of life is the parking lots are probably not paying a full tax." CRDA is currently involved with parking-lot redevelopments in Hart- ford's Downtown North neighbor- hood and near The Bushnell Center for the Performing Arts. Freimuth said parking lots' income streams should be factored into their assess- ments, in order to put their property taxes more in line with their true economic value. That would make parking lots with high average oc- cupancy rates more valuable. But, does Freimuth think a land value tax would spur development? "School is still out," on that, he said, adding that Harrisburg, Penn., has been a leader in experimenting with the tax, which has had some initial positive impact there. Harrisburg adopted in 1982 a tax rate on land that was four times the rate on buildings, which helped decrease the number of vacant struc- tures there over time, according to a recent report by Strong Towns. There are, however, other examples of Pennsylvania communities that adopted but then scrapped the tax. "Theoretically, you don't want to discourage improvements to real estate and therefore want a lower tax on new construction than on the land itself," Freimuth added. "When it comes to parking lots, this becomes a much more poignant argument. Why encour- age surface parking at the expense of residential and commercial uses that provide greater economic impact?" — Sean Teehan Continued on next page >> Then and Now As tens of thousands fled Hartford for surrounding suburbs between the 1950s and 2000s, an ever-increasing amount of space in the city was dedicated to surface parking. These charts show the growth of city parking lots over four decades. Source: UConn study "Effects of Urban Fabric Changes on Real Estate Property Tax Revenue."

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