Shopping Centers Today International

DEC 2015

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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which points out that residential prop- erty accounts for 73 percent of total assessed value in California today, up from 55 percent in 1978, while the commercial portion of total assessed value has fallen from 45 percent in 1978 to just 28 percent today. Former U.S. Labor Secretary Rob- ert Reich also references the increasing share of California's property taxes paid by residential owners, citing the shift as evidence that large corpora- tions and wealthy commercial prop- erty owners are taking advantage of a tax loophole. In a three-minute video posted on YouTube this summer, Reich, now a professor of public policy at UCLA Berkeley, urges Californians to support the Make It Fair grassroots movement, which seeks to have all commercial properties assessed at cur- rent market value for tax purposes. Opponents of a split roll chalk up the increasing prominence of residen- tial taxable value to changing land use, pointing out that California has lost most of its major employers in several industries to other markets in recent decades — aerospace and semiconduc- tor manufacturing being examples — while the state's communities have embraced a proliferation of high-end residential development. And although Reich and other split- roll proponents contend that many commercial property owners are exploit- ing the tax system to increase their own profits, commercial property defenders point out that the net leases at most re- tail shopping centers and in other real estate sectors channel property taxes to tenants, not landlords. The fundamental risk to landlords may lie in the split roll itself, because it opens the door for communities to tax those businesses differently from home owners, observes Herb Tyson, vice president for state and local gov- ernment relations at ICSC's Wash- ington, D.C., office. "The commercial properties don't vote, so anytime [local governments] have an economic chal- lenge or need, or want to create more revenue, you just land in the commer- cial category," Tyson said. "There's no downside electorally." SCT 124 S C T / D e c e m b e r 2 0 1 5 "The commercial properties don't vote, so anytime [local governments] ... want to create more revenue, you just land in the commercial category." Retail Real Estate News WeeK W From the editors of Shopping Centers Today, SCTWeek is an e-newsletter delivered directly to your inbox each Friday morning with the week's most important news stories and deal announcements. Sign up at www.icsc.org/sct/sct-week

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