Should the government force people to operate businesses at a loss?

[agamemnus]

These kinds of things are working great in oil-rich Venezuela.

http://www.thedailyitemoflynn.com/ar...11/03/09/news/

EDIC wants to seize Lynn restaurant property by eminent domain

By Chris Stevens / The Daily Item
LYNN - James Cowdell, the executive director of the Economic Development and Industrial Corporation, said he will present a plan to the EDIC Board next Tuesday to take the long defunct Anthony's Hawthorne Restaurant and parking lot by eminent domain.

"It's a step that we have to take," Cowdell said Tuesday during an editorial board interview with The Daily Item. "I take that very seriously (the taking of a building by eminent domain) but we don't have a choice."

The Athanas family opened what would be the first of four Anthony's Hawthorne restaurants in 1937 at 380 Washington St., with a parking lot down the road at 37-45 Central Ave. Cowdell said the family closed the doors in 2003, "and nothing has happened since."

Wig Zamore, an attorney and advisor to the Athanas family, said the family feels it has been quite cooperative with the EDIC and has put a lot of work into developing plans for the property.

"And it would be their intention to move ahead when it's economically viable," he said.

Cowdell said he's been waiting eight years for the family to move ahead. When the restaurant closed, he noted, the family didn't hire a real estate broker or an engineer to clean up the parking lot, which is thought to be contaminated.
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"They essentially just walked away," Cowdell said.

The family has, however, paid the taxes on the 32,000 square-foot former restaurant in the middle of downtown, Cowdell said.

City officials rezoned the downtown area between 2004-07, allowing developers the opportunity for mixed use, which could include housing, in what is predominantly the Central Business District. The result, Cowdell said, is that 250 people moved into the downtown area, along with $35 million in new development.

Cowdell said he is confident the EDIC Board will support his plan and Mayor Judith Flanagan Kennedy has also pledged her support.

"It has sat vacant for years with no progress, no development on site," Flanagan said. "It really is the cornerstone of the revitalization of the Olympia Square area."

Kennedy said, with another developer starting the redevelopment of nearby 14 Central Ave., it is the perfect time to get aggressive in taking the Athanas property.

If the board approves the move, the proposal will head to the City Council for a public hearing.

Cowdell said he understands not everyone supports the idea of government taking private land for other private use, but he reiterates that he feels he has no choice.

Cowdell said he has sent buyers with legitimate offers to the Athanas family, but they've been turned down flat with no counter offer.

"What's our option?" he said. "It's been eight years and nothing has happened. I'm confident that eight more years will go by and still nothing will happen."

He pointed to another Athanas-owned property, the General Glover Restaurant in Swampscott, to make his point. The General Glover has been closed for 20 years and Cowdell said like the Anthony's Hawthorne property, it has sat unused, the family has made no move to sell or develop the land.

Cowdell said he expects that Athanas family will put up a fight, but he feels secure that the EDIC will prevail.

The EDIC will have to put up the money to purchase the property, which will be the appraised cost plus 10 percent, it will also have to pay legal fees and foot the bill to have the parking lot cleaned up.

"I don't take this lightly," Cowdell said. "It's a big step."

The EDIC Board will take up the issue Tuesday at 6 p.m. in the EDIC conference room number 302 in City Hall.

[Dreadnaught]

I don't think this is a case of a business being asked to run at a loss, but it is yet another case of eminent domain abuse.

If the local government is so confident that it's tax breaks for the adjacent private property will help the area, it should let that project stand on its own. But I don't see the local authorities giving the owners an incentive to actually run their business, they seem to just want to get rid of them.

[agamemnus]

Well, essentially, they are trying to do this. If the owners had kept their business running it would have looked maintained, but it would have given them a loss (in the view of the owners), so they keep it shuttered. It's ironic that a city and state that can barely manage its finances wants private entities to operate at a loss.

[Ominous Gamer]

I don't consider maintaining that which you are legally required maintain as operating at a loss. When you own a plot of land and operate a business there are certain codes and laws you agree to follow. Paying taxes on an eyesore isn't good enough.

What you are suggesting, oddly enough, is already abused by companies that try to push for eminent domain. They will buy out large sections of a neighborhood and abandon it, allowing the property value to fall, then use that excuse to low ball the holdouts, or even blame them for the decline.

[agamemnus]

They are not causing problems for the rest of the area, though. Just being an eyesore isn't legally (probably..._ or ethically enough to take the land by eminent domain.

[GGT]

The article suggested this family leaves more than one property abandoned and in disrepair, and the first lot is suspected to be "contaminated". Not sure what that means --- underground tanks of some sort? It also sounds like the city has tried to work with the owners for a long time, to keep the property from dragging down the surrounding property owners' land investment, or becoming a "blighted" area. Eminent Domain treats "blight" differently than other property.

My question is: what's the motivation for the owners of that property? What's the point of paying taxes on it, but not maintaining it or using it for business, and just letting it go to the dogs?

[agamemnus]

1) It's a restaurant parking lot -- there's no more contamination than the rest of the city. Even if it was true, then they would legally only have to pay a fine. Interesting how the city thinks they can take someone's property if there's anything at all wrong with that. It's a slippery slope and all that...

2) "blight" means that there's a danger to residents or passers-by by allowing the building to remain in its condition. This is far from the case.

3) The city is trying to buy the property for a song, which is wrong. Appraisal prices are artificial and especially skewed in a bad economy, especially with this city's condition. (guess who helped make the city the disaster it is? Pro-tip: it's not the owners!)

My question is: what's the motivation for the owners of that property? What's the point of paying taxes on it, but not maintaining it or using it for business, and just letting it go to the dogs?

I don't know, but like I said there's no money to be made there. It's a hassle to get to the downtown of my city because of its poor road planning and even poorer roads, making it basically pointless to develop there (unless you're looking to score a tax write-off). Whatever the reasons, they have the right in this country to keep their land as long as it is not endangering anyone else. Hypothetically. Under the Constitution... yeah.

[GGT]

Then why don't the owners maintain the lot? Y'know, keep it swept clean, remove garbage or litter, plow the snow, let it be used as a parking lot?

It sounded like the defunct and abandoned restaurant building isn't in question, just their parking lot down the street. Did I read that wrong?

[Veldan Rath]

If it's just the parking lot, then it sounds to me that the developer just wants is, the city likes the idea of extra tax revenue, and is using the excuse of that if the owner is not using it, then they can take it.

Kelno vs New London all over again...just not with people's homes.

[agamemnus]

Then why don't the owners maintain the lot? Y'know, keep it swept clean, remove garbage or litter, plow the snow, let it be used as a parking lot?

It sounded like the defunct and abandoned restaurant building isn't in question, just their parking lot down the street. Did I read that wrong?

It's both.

The building, standing on close to the center of downtown, looks dusty and abandoned. The parking lot is fenced in and I don't think it's used. A very large part of that area is parking lots, though.

The downtown area of the city is a mess.

The northern section has an enormous amount of parking lots. The middle has the abandoned restaurant and city hall. The south is full of old factories that are either abandoned or have been turned into low and (sometimes medium) income apartments. South of that is the community college that was built on a burnt-down shoe (?) factory and a road leading to the waterfront that is mostly a walking waterfront and a seawall. (no space for shops etc)

There is a major highway that dissolves into several smaller roads going from SW (from Boston) to NE (suburbs) There is no major thoroughfare going across the city -- this city was built around factories in the late 19th century, and the design stayed that way. It's an absolute pain to get to Boston or the major highways encircling eastern Massachusetts/Boston from the downtown area of the city due to the narrow roads. There is a train line with one stop in the center of the city but it is not really connected to Boston's system and isn't that fast anyway.

The downtown's property values are frightening low. Large vacant (un-maintained) buildings of perhaps 10,000 SQ FT of space are not being sold for even 600 thousand. The few businesses in downtown are mundane, such as a Dunkin Donuts, a few ethnic food stores, a tiny key duplication shop, and H&R Block. The rest is dominated mostly by vacant buildings, parking lots, vacant lots, low-income apartment buildings, or senior (old people..) apartment buildings.