It isn’t lost on me that suggesting overhauls of Maryland’s Sales and Use Tax, or the Nation’s FICA taxes are quixotic quests. We are living in a top-down environment where we wait for answers, yet this slice of bandwidth is geared towards bottom-up solutions to deficits and joblessness. I don’t expect to awake on Friday to find my paycheck has gone up a percentage point due to a reformation of the FICA tax, yet I continue to trot out these notions, hoping that the Eastern Shore’s two degrees of separation may work to our advantage.
So perhaps I am presiding over my own island of intellectual arrogance; however, I would like to believe that the bridge to this island is a shovel ready project. The way to build this bridge is to take last week’s idea of critiquing “our family” and then generate a realistic bottom-up idea to improve the region’s standing. Otherwise, we’ll continue to wait.
Using blank marquees and “please rent me” signs as guides, Chestertown has nineteen store front vacancies and a fledgling grocery store on MD213. That’s at least fifty jobs unavailable to our young people, our down on their luck citizens, or families who may want to earn a little extra for the holidays. That’s a lot of transactions being conducted outside the taxing authority of the State of Maryland. That’s nineteen tenants who cannot alleviate the burden of tax and common area maintenance charges that are part of existing lease agreements. These factors have constructed a giant red vacancy sign.
Why is this happening? We have a nice town on a river. We house a College. We are the unofficial capital of the Upper Shore region. Why are we “for rent?”
On the demand side of the ledger, there really are not industries present that pay the wages needed to support a variety of brands. There aren’t State and Federal jobs, or an I-270 tech sector that can generate customers for a variety of brands. This is why I have been barking about the three opportunities to change that situation (leisure hub, embrace the green sector, sensible use of US301).
On the supply side, the major brands have taken a look at the peninsula and made the determination that “if Chestertown, Centreville, Denton, et al want to get their television from us, they can come to us in tax free Delaware.” Remember folks, it’s not just the goods for sale, it’s the light bulbs, trash bags, brooms, mats, software, etc that are consumed at a zero tax rate.
Some people diminish these facts out of some notion that State or Town pride ought to dictate buyer behavior. That may fly in their version of Chestertown, but it doesn’t resonate in Calvert Heights or Edge of Town Drive. In fact, it doesn’t resonate with any household trying to feed, house, and entertain their family on a budget.
That’s why we see all of these vacancies. To this point, I have been guilty of tilting at windmills, and suggesting fixes that will only take hold in the long run. So I ask if there are there tools at our disposal that can get us closer to economic viability. Of course there are.
Kent County enacted property tax relief for businesses that make an investment in the County by way of developing a property and providing at least twenty-five jobs. During the public comment window for this provision, I commended the County for trying to be active in luring commerce to the area. My concern was that derelict landlords could shuffle some tenants around, get a new tenant for their property, and claim a tax credit for their entire property. The unexpected tax break would have to be “paid for,” and who winds up with that bill? Thankfully, the Commissioners assured everyone that the provision is written in a way that the tax break is geared towards the new business entity. So let’s embrace it.
Why hasn’t anyone jumped on board? The answer is sewer allocations and basketball courts. If there is no unity of thought behind who gets the poo, or where kids can play basketball, then we have no shot at building an economic vehicle. It’s time to come to an agreement on economic viability. People like it. Now let’s tackle this problem.
Nineteen vacancies seem like a daunting task. Let’s simplify it. There is the old Walgreens location. There is the old Rite Aid location. There is the Village Bakery location. There are random store fronts available in Washington Square. Kent Plaza? – oy vacancy! The old Black Eyed Susan property is a blank slate with its own challenges, which may have to come last. With some creativity and incentive, the entire problem can be diminished by two-thirds.
You may recall my moot concern regarding the property tax break. Even if it weren’t moot, I’d like to tap into my inner Mitt Romney, and change my mind. If the goal is to ensure more commerce takes place within our borders, and to create more tax payers, then the status quo isn’t cutting it. Let’s get proactive, call the developers to the carpet, and provide incentives within reason.
Let’s get Cordish and Silicato in the door with the Town and the County. Let’s encourage them to offer incentives to their tenants to shuffle in a way that creates the opportunity for a larger store to occupy the remaining space. Let’s extend the tax break to them as a way to offset whatever moving incentive was provided to the tenants. Let us all come to grips with the fact that Target and Trader Joe’s aren’t walking through that door. On the other hand, Marshall’s, Sports Authority, Ross, or other secondary players in the industry may find our town to be a satisfactory niche. There doesn’t seem to be nineteen people willing to take a risk on our town. Let’s find the six who are.
The developer wins because they have a better chance at filling the vacancies. The existing tenants win because more shopping options will act as a magnet for their eatery, salon, or boutique. The shopper wins because they don’t waste gallons of gasoline on traveling to Delaware to get all they need. The young folks, the down on their luck, and the part time worker win because they have a place to work. This week’s column is without a football segment, save for this: “Just win baby!”
Warrior Bob Kramer says
Monsieur Troup’er: Let’s get Cordish and Silicato in the door with the Town and the County
Absolutely spot on… as it should be a joint effort… and they need to hear from these folks what can be done to attract the biz you speak of. But of course… there’s a lot of spit going back and forth between the county and the Chestertownies. Think they can separate themselves from that fight and join forces for a change?
Beat the Tigers; beat the Deacs; Just win, Baby!
Michael Troup says
“Think they can separate themselves from that fight and join forces for a change?”
Only 8 people can answer that.
S Pennington says
Rest assured that Cordish and Silicato have plans
for their properties.
Two large, professional property managers do not both
neglect such assets without a plan.
Ask “why do they let these properties sit partly vacant
for years on end?
what’s in it for them?
what could they be thinking?”
There could be many answers,
but the answer du jour of the day for just about any question in Chestertown
is: “… and then the college will buy it.”
Steve Payne says
I worked with Cordish many years ago and they were willing to do deals. On that deal there was up to 6 months rent or build out cash available for a 10 year lease. The deal never happened because the proposed tenant didn’t meet their requirements. I just looked at their web sites and Silicato says they have 8,400 sq. ft. available @ 12.00 per ft which is reasonable for a grocery store anchored center. I used to do a fair amount of commercial leasing and all the tenants have demographic requirements for population density and household income within a distance that they consider their market. Most of the big retailers are substantially above what Chestertown would be. There are many companies that have smaller stores however that are specifically designed for a market like this. In Kent Plaza Peebles probably has a dept. store exclusive and the owner would not allow one anyway I would guess.
Have a meeting though. It could only help and a partnership with the owner and county/city would be great. I would love to see a rehab of Kent Plaza personally.
Michael Troup says
@S Penn – Good questions from another perspective. Perhaps these properties have a present value, and the marginal profit from improvements (Town/County aided or otherwise) wouldn’t exist. OR perhaps there isn’t a present value, but the future value comes from something entirely different. It’s a bit sinister to say that an evisceration of the properties is afoot, but you may have nailed it. Time will tell.
@Steve – Thanks. I was hoping we’d get the realtor’s perspective. Question – if you’re Peebles, do you want exclusivity over a pond, or a chance to compete in a lake? What good is exclusivity if the cars drive past your store to Middletown?
Steve Payne says
If your a Peebles you want exclusivity over a pond. That’s their business model. (Be the only dept store in a small market) Kohls does this too but they’re a little more flexible and will take sites in larger markets too. I don’t think many people care about a drive to Middletown or Annapolis or whatever as long as their basic needs are available here.
Steve Payne says
One thing I’d like to see is to remove the parking meters from downtown or install some kind of permitting system . The employee parking problem can be worked out I’m sure. Meters don’t encourage impulse shoppers or people who just want to stroll around and look at their own pace.
MichaelTroup says
Steve says: “I don’t think many people care about a drive to Middletown or Annapolis or whatever as long as their basic needs are available here.”
I’d hate to go Abraham Maslow on you, but are they being met? Are “needs” as easily defined as we might think? I would be interested in knowing where all of those children at Worton Park on Saturday morning bought those cleats and shin guards. I suppose nobody NEEDS to play youth sports. If we put that in the category of belongingness needs, I suppose that would fly.
The real point I’m driving at is, people will shop where they feel all of their needs are met in this hierarchy. So if Marshalls, Ross, etc hit too close to home for Peebles (btw, I’m sure they don’t have exclusivity over the whole town), certainly there are other retailers that pursue other targets. You brought up Kohl’s. I’m sure they negotiate their share of rights, but they don’t say that Dick’s, Staples, or Barnes and Noble can’t come along for the ride. They know that all ships rise with the tide. So if the current situation is being preserved just to spare Peebles’ feelings (you didn’t say that, but just connecting some dots in our discussion), then I have another nautical metaphor. Something about deck chairs on a famous ship…
Re meters, you have me thinking. I had visitors this weekend, and the very subject came up. Stay tuned…
Steve Payne says
@ Michael, No I didn’t say that and I hope I didn’t imply that. Your right The tenants do like busy, full shopping centers with a good mix of tenants as long as it’s not direct competition.The concept of a multi tenant shopping center is just that. People come and can shop at several different places or at least see that the other tenants are there (with their big sale signs in the window.)
I’ve heard people complain that the downtown stores close too early. Most centers actually have clauses in their leases that forbid this. They’re called “no dark” paragraphs. Some even have a minimum stocking percentage level so they have to keep the shelves full.
I’m glad to hear that your out of town friends agree with me. Many people here think that the employees will grab them and tie them up all day. They’re right to think fear that. Most large centers have a clause in the lease restricting where the employee parking can be. It’s usually behind a line painted on the parking lot.
Michael Troup says
Ah the “no dark” clause. The bane of every mall employee’s existence at 9:20 p.m. during the month of February (Christmas is over and it’s too cold to just go out for no reason).