No doubt the Actual Value Initiative, the city’s new property assessment system that’s retabulating old and forever corrupted actual market value data, has more than a few residents in some neighborhoods freaking out about rapidly rising real estate taxes. But even more worrisome is the toll the initiative is going to take on small businesses, especially restaurants. According to the Daily News, the East Passyunk Avenue’s booming restaurant row is poised to take a huge hit. Under the new system, Lynn Rinaldi and Corey Baver will have to cough up almost twice as much in property taxes for Paradiso, the restaurant that they opened eight years ago.
And what that means is, they will either have to increase the prices on their plates, or dial back employees and the hours they work. Either way this will greatly effect the quality of the restaurant’s food, service and overall value to diners. Worse case scenario, it could sink it entirely. This comes as kind of buzzkill for the strip, which has seen a huge uptick in restaurants in recent years. The current count is 30, and of them four were just named James Beard semi-finalists.
But what about other emerging restaurant rows, like South Street on the west side of Broad Street, Fairmount Ave., and Frankford Ave. in Fishtown?
A quick peek at AxisPhilly.org’s property tax changes app offers unsettling and incredibly inconsistent data.
That kitschy corner diner at Frankford Ave. and Girard, which would make a wonderful addition to Stephen Starr’s growing Fishtown portfolio will likely continue to remain vacant. Under AVI, its tax rate is going to jump 312 percent, It’s on the hook for $997 for 2013, but next year it will owe $4,110. Fette Sau is looking at a 227 percent increase, with taxes rising from $1,094 to $3,578. Directly next door, Frankford Hall will see an increase of 462 percent, going from $1,251 to $7,035.
On Fairmount Ave., the properties near La Calaca Feliz will see taxes increase by a modest 47 percent. Just down the road a short ways though, the property that houses Hickory Lane is in for a -14 percent change in tax rates. But just a block west, Urban Saloon is going to get a 39 percent increase.
The 2100 block of South Street, which this week saw the opening of Honey’s Sit ‘n Eat’s Second location is in for a rude awakening too. That block is looking at a 131 percent increase.
There appears to be no rhyme or reason to the new actual value assessments, and much worse, if the initiative goes through, it could have a devastating effect on the restaurant community. Here’s hoping a new and better plan emerges soon.
AVI likely to take a big toll on small businesses [Daily News]
Property Tax Change [Axis Philly]