No home run, but a standing double for city

  • Posted: Monday, March 31, 2014 6:31 a.m.
Michael Young
Michael Young

Incentives to promote high-density mixed- use development downtown was a hot topic at the city’s annual baseball-themed retreat. As a developer and contractor, I am curious to know what it will take for me to do more of these types of projects. As a business owner, I am perplexed by perceptions of why businesses fail.

The proposed incentives and water line extensions for sprinklers and parking and streetscape improvements will enhance downtowns economic development toolbox. While not a home run, it’s a stand-up double. Considering the looming demise of the Historic Investment Tax Credits, these public/private partnerships will become paramount.


Only a stand-up double? A good plan is only as good as its weakest link. What else can go in the toolbox to further incentivize developers and tip the scales in downtowns favor, with little or no financial participation. Some examples:

1. Maintenance and curb appeal: Sidewalks, trees, parking lots, curbs and gutters, graffiti abetment, parks, alleys and other public spaces. I will maintain what I own. The city should set the example. The fact that downtown pays and generates the highest tax rates in the county is reason to rationalize maintaining it.

2. Alleys: Many downtown alleys don’t have tax map numbers. They are not maintained by anyone. One would reasonably assume they were in the public domain. Owned or not, the city must take ownership in finding a way to get them maintained.

3. Utilities: Much of the existing private residential development happened downtown because someone had the foresight to put empty electric conduits in the ground 50 years ago. So ask yourself, what else will need a trench — gas lines, electric conduit, communications conduit? Must we keep digging it up and paving for every project? It is a unnecessary, costly proposition. Coordinating all utilities will reduce development costs. Having the foresight to drop inexpensive empty conduit in the trench for future development will significantly reduce development cost. Take the lead in coordinating it.

4. What a public/private partnership isn’t: A commercial building is only worth what you can get for it in rent. In other words, whatever is left after rent minus, taxes, insurance and upkeep, will support a mortgage. The more income after expenses, the more the building is worth (or the more you can borrow and invest). When the city owns upscale apartments in the Plaza and they charge less than fair market rent, it competes and lowers the rental rates/incomes downtown for private development (same will hold for the county’s proposed foray into government-subsidized retail space at the mall). Stop driving down property values.

5. Time crimes: What is the interest on $750,000 per week? Or $1 million per month? Hand out all of the incentives you want or simply work at the speed of business. After a torturously long reorganization of building inspections process, apply a cattle prod to all approval processes. Save me money, don’t waste my time.

6. Quiet enjoyment: High-density mixed use developments require compatible uses. Inevitably, with density comes conflict. Everyone is entitled to the same and equal quiet enjoyment of their rented space. Your rights end where your neighbors rights begin, regardless of how much rent you pay, whether you are a business or residence or who came first. When there is a conflict, the police need to be part of the solution, not a problem.

7. Momentum lost: Downtown Salisbury Inc. is (or was) the organizational clearinghouse for everything downtown. The board makeup is not representative of its constituents. It is without a professional Main Street manager. There is no urgency to the problem. The city funds and collects taxes for it. Goose the organization or disband it.

Barring philanthropy and altruism, private investment follows the path of least resistance and greatest return. It is a complicated high-risk business for people with a high tolerance for risk, being promoted by people with a low tolerance for risk and full understanding of the complexities. The city can only influence a fraction of what is involved with its incentives. But those things that it can influence, it can do much better. Develop a comprehensive list and address all the issues…a home run.

Michael Young is vice president of Downtown Graphics Network in Salisbury.

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