 
Under a new law, a vacant parcel in downtown Stamford long derided as “the hole in the ground” could in time take on an entirely new identity ”“ a money pit.
With an eye on potentially expanding the new law to other cities, Connecticut is allowing New London officials to create a plan to tax land at an exponentially higher rate than buildings, with the aim of prodding developers into erecting buildings that serve broader goals of economic development, or selling the land to those that will.
The law explicitly bars New London from actually implementing such land-value taxes, however, giving the Connecticut General Assembly wiggle room to assess any pilot program to see how it would play out in reality.
“The land-value tax has ”¦ got over a 100-year history in this country and throughout the world,” said Arthur Costa, a New London resident who testified on the bill this past spring in Hartford. “Shifting your incentive to development, where currently there”™s blight and empty brownfields and vacant buildings (in) cities of all sizes, can actually make a real difference in terms of rejuvenating that local economy, creating local jobs and producing local revenues, and all of this is done without asking for more money either from the state or from local citizens.”
If expanded broadly, the law could force the long-overdue development of properties like Stamford”™s infamous hole in the ground on Tresser Boulevard, a huge excavation in the shadow of gleaming office buildings that has become a running gag.
The owner of the site is Milstein Properties Corp. of New York City. A man answering the phone there referred a reporter to Andrew Berkman, who did not return a call by press time.
Kip Bergstrom, director of the Stamford Urban Redevelopment Commission, said such a law would be controversial to carry through in Stamford due to the influence some owners of unoccupied land have in city circles. He added that the city of New London has asked Stamford and other cities to monitor its progress and make suggestions on how to best enact a land-value tax there.
After Altoona, Pa., enacted a land-valuation tax in 2001, officials there expect to phase out taxes on structures entirely by 2011, according to Joshua Vincent, a land-valuation policy expert with the Philadelphia-based Henry George Foundation of America.
“A lot of people do not build ”¦because they know that if they put up a building, they are going to pay over 60 mills in real property tax on that building,” Vincent said. “If you say to that builder, ”˜You”™ll put up this building and we can promise you we”™ll never tax you on that building,”™ then the increase in the land-value tax is more than offset by the benefit gained by building on that vacant lot. In other words, it ends up being cheaper ”¦ It becomes cheaper to build in the city.”
Costa cited the example of Harrisburg, Pa., which after implementing a land-value tax transformed itself over two decades from among the most distressed cities in the nation into a model city.
“It has the longest running mayor in the history of Pennsylvania, to kind of attest to that,” Costa said.
The Connecticut law was one of several enacted in the past month in an attempt to rekindle economic development, including bills to limit liability of developers of contaminated parcels dubbed brownfields; extend permits to account for construction delays caused by the collapse of the credit markets; and reserve $25 million for tax credits for “green” building systems that conserve energy and limit pollution.
While brownfield sites have long vexed economic development officials in Bridgeport and other cities, Stamford”™s hole in the ground has been especially confounding due to the success other commercial office owners have had in downtown Stamford.
“Even the assessor”™s database calls it ”˜the hole in the ground,”™” said Stamford resident Wyn Achenbaum, who joined Costa in testifying on the bill this past spring. “Right across the street is the Marriott ”¦ It provides jobs, it provides hotel rooms, meals, parking, a whole variety of things that the market wants, and yet we tax it more than we tax this hole in the ground. And the incentives that we”™ve got have just not moved the owner of this hole in the ground to put it to good use.”
