• Montpelier businesses split on new tax proposal
     | January 09,2013

    MONTPELIER — A possible tax on downtown commercial property has some in the business community signaling their strong support for the proposal, others their adamant opposition, and many more looking for additional details.

    Businesses and property owners range all over the spectrum of reactions to a proposed tax of 4.5 cents per $100 of assessed value on commercial properties in the downtown area.

    Top officials at New England Culinary Institute recently discussed the measure, agreeing at a meeting that they needed more information, said Kevin O’Donnell, the school’s vice president of food and beverage operations.

    “I want to know the ripple effect,” O’Donnell said. “Is it five times, is it four times, is it three times?”

    The tax on some 220 commercial properties — primary residences, nonprofits and municipal properties would be exempt — would generate $75,000 a year. The nonprofit organization Montpelier Alive would manage the money, spending it on local and regional print and radio advertising and on streetscape improvements, such as banners on State Street, additional benches and new garbage barrels.

    Like NECI officials, Positive Pie 2 owner Carlo Rovetto said his restaurant’s operating margins are thin already. He said he’d support a nominal tax increase.

    Property owners who are landlords could pass the increase on to tenants at the landlord’s discretion.

    One of the owners of The Drawing Board, Jody Brown, said that could happen when the store’s lease expires in March, but she’s still supportive of the tax.

    “If we all vote to pitch in to beautify it … I’m willing to do it,” she said.

    To gauge the effect of the new tax on individual businesses, Montpelier Alive’s presentation on the proposal detailed how a typical business could be affected. The materials are available on the organization’s website, www.montpelieralive.org.

    The Rivendell Books block, for example, would face a total charge of $232, which could be split among the eight businesses there, or the property owner could absorb the cost. Montpelier Alive board member Andrew Brewer, who has helped advance the plan, said anchor stores could also conceivably take the lead in paying the costs.

    Capitol Grounds Café and Roastery owner Bob Watson said his share could be less than $100, and he thought he could afford more. Watson also said he noticed a significant increase in his business when he invested in outdoor seating and umbrellas for the summer.

    Some major downtown landowners, however, oppose the tax increase.

    Fred Bashara II and his family own the Capitol Plaza Hotel & Conference Center, plus a self-service carwash on River Street, a Barre Street laundromat and the Capitol Showplace movie theater, which includes some adjoining storefronts.

    Bashara said his leases don’t allow him to modify the terms or pass the increase on to tenants, and he wouldn’t want to do so, especially for new businesses.

    Jeff Jacobs, who no longer oversees Montpelier Property Management but still offers advice to his son, Jesse, who manages the company operations, sharply disagreed with the proposal.

    “I can’t pass anything on to my tenants,” Jeff Jacobs said. “Montpelier’s struggling.”

    “What they’re asking for now — two years from now they’re going to want an increase, and four years from now they’re going to want an increase,” he said.

    Other major downtown property owners, however, expressed support for the idea.

    Doug Nedde, the developer of City Place, said that even though its assessed value is around $5.3 million, the new tax would be only about $2,000.

    Tim Heney of Heney Realtors said he’s not necessarily opposed to the tax, but he’s curious for more information.

    “The key is if it starts small, does it stay within that amount?” Heney asked.

    Proponents of the plan suggest that the additional advertising dollars generated could be strategically targeted, for example, to visitors from the Montreal area, and for enhancing Montpelier’s reputation as a destination of choice. But O’Donnell, of NECI, said few of the school’s restaurant diners are from there.

    Bashara said his 65-bed hotel gets more bookings through the Internet than through Montreal-area tourism promotion.

    The City Council is to discuss the proposal at tonight’s meeting, which begins at 6:30 p.m. Councilors could decide to place the measure on the ballot for city voters to decide.

    Bashara, however, said he thinks Montpelier Alive, like other organizations, should have to collect the necessary signatures from registered voters beforehand to get the question on the ballot. If the group were required to do so, it would need to collect close to 700 signatures, and the deadline for such petitions is Jan. 24.

    The council has repeatedly denied requests for similar exemptions from other parties in the past.

    david.taube @timesargus.com

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