It’s Still the Town Downer

Fred MangelsThree and a half years ago, Thursday, September 16, 2010 Conservative blogger Fred Mangels said;

“Eureka’s Biggest Eyesore….Nope, not the Balloon Tract……I guess I’m not the only one that thinks the old Downtowner Motel……..is the city’s biggest eyesore. Every time I drive by that lot I’m just appalled that it was allowed to deteriorate like that.”

Three and half years later……nothing much has changed with a seemingly pro blight City Council in firm control.

Yesterday Kevin Mckenny and a small crew were observed doing a superficial clean up around his blighted property, formerly The Downtower Motel.

The Bass campaign is moving forward with a new and more serious impetus, now that they have a real competitor in the race. It’s conceivable that the community outrage over her appointment of Kevin Mckenny to the Planning Commission has prompted her to put pressure on him to do something.

Don’t hold your breath neighborhood. As long time observers of slumlord behavior, we can confidently predict a superficial clean up is all you will see. Slumlords only do the minimum they’re forced to do.

The City Council needs to get some courage and use its enforcement power to declare the property a Public Nuisance. This is what they did with Floyd Squires, a slumlord with no political clout.

Until they start fining Mckenny every day he leaves the property in its blighted condition, nothing will change.

down towertown Downer sign

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39 thoughts on “It’s Still the Town Downer

  1. McKenny told an E st. neighborhood group on Thursday that he has filed a grant to redevelop the site as affordable housing for seniors. Perhaps Bass is making him do that. I think it would be a good thing. !

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  2. Did he say what kind of grant, private or public? It’s a classic developer move to have the public pay for your development. McKenny bought the place he should sell it or pony up the money to make something happen.

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  3. Virginia 3833,

    If true, that would be a smart move.. That’s just the kind of “infill” that Bass’s opponents say they want, so it would be extremely awkward for them to oppose it in this case, just because it’s McKenny’s property. And there’s no question that affordable senior housing is something the community needs, and would, of course, be a huge improvement over the current state of the property. If that’s the outcome, I’m not really concerned about who wants to take credit — they all can, for all I care.

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  4. re:pete,

    Would you really oppose public funding for a senior housing development on the property, just to spite McKenny? If so, that’s very telling.

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  5. My neighbor complained to the city about my father in laws gutters, because one of them was hanging off the roof and the house was in a bit of dis-repair. My in-law had no excuse, and his house could have been in a better state if he accepted a bit of help from his family. The city sent him a nasty letter, with references to city codes, and basically threatened to fine him if it wasn’t fixed. The city picks on the little guy, while leaving the fat cats alone. Total BS.

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  6. McKenny’s been talking about getting a grant for years now. Talk is cheap. Just get it done or sell it.

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  7. Then do it already,

    Anon 4:19, 4:23 here. I can certainly agree with that.

    My take on this is somewhat nuanced, in that I recognize that McKenny bought the property shortly before the national recession, so I don’t necessarily hold it against him that he hasn’t been able to get financing to redevelop the property. And I recognize that it’s not like it’s somehow to his benefit to leave it dormant, costing him in taxes while not making him a dime. So I assume he’d like do something constructive with the property, it’s certainly in his interest to do so.

    At the same time, I think the neighbors have a legitimate gripe that he’s let it become such an eyesore, with trash and construction debris piled up. At some point you do have to say “get it together, or try to find someone else who can.” Hopefully the controversy over his appointment to the Planning Commission will light a fire under his butt. If the condition of this property is an embarrassment to the person who appointed him, Supervisor Bass, so be it — perhaps some of her allies can pitch in and help turn things around. But I agree, if he can’t get something going, he ought to be actively seeking a buyer who can. And yes, the City should act if necessary to force him to, at the very least, clean up the property in the meantime.

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  8. “The city picks on the little guy, while leaving the fat cats alone.”

    A fair point, and worth repeating.

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  9. “I’m waiting on a grant to pay for fixing up.”

    “Oops! I didn’t get the grant. Oh shoot.”

    “I’m filing for another grant to pay for fixing up.”

    “Oops! I didn’t get the grant. Oh shoot.”

    Repeat as needed.

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  10. Anonymous 4:23:

    Re:pete did not object to Senior Housing. He just objected to having the public bail out Mr. Mckenny.

    Especially (my own addition to what re:pete said) when someone’s “little guy” grand dad get’s this kind of fix-it ticket, he’s going to pay for the fixing out of his own pocket.

    I don’t think “little guy” grand dad will be getting out of the fix-it ticket by saying he’s applying for a grant.

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  11. All part of his genius plot to continue losing money on the property hand over fist, because he loves owning an eyesore that brings him negative publicity and saps his wealth?

    I don’t get what you folks think his motivation is? I don’t see what he would have to gain by pretending to try to move forward with redeveloping the property, while secretly not intending doing so.

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  12. Just to clarify, my 8:25 comment was a response to MOLA:42’s 7:45 comment.

    As to MOLA:42’s 7:57 comment, I think that’s a fair point. But I would ask you this: Which would you prefer, that Mr. McKenny succeeds in getting a grant that (at least partially) “bails him out,” but this results in the “Town Downer” becoming the “Torn Downer” and a nice senior affordable housing complex is built on he site, or that Mr. McKenny fails to get such a grant, the property continues to be vacant, either under his ownership, or if he sells it, someone else’s?

    What if, together with a grant, he puts a good deal of his own money into the project, as he will almost certainly have to (including more on top of what he presumably already has, when he bought it) and creates a good outcome for seniors, and for the neighborhood? Would that still be bad, in your estimation? In other words, is the only satisfactory outcome that he must sell the property at a big loss, and someone else take it over, even if they have no better prospects to redevelop it? Maybe I’m wrong but it sure does seem like some folks are more focused on how this works out for Mr. McKenny, and are anxiously rooting for his failure, even if that means the blighted property remains blighted for the forseeable future. Hope I’m wrong about that.

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  13. I believe the property changed hands in 2003, maybe 2004. He moved at a snails pace filling in the old water filled pool with unusable bricks but didn’t cover the ugly pile. finally boarded up the windows as they were being regularly broken by vandals, Finally he took down the stair to the upper level when druggies took over..After vandals set fire to the lobby/office area, he tore that building months later. It has been a continuing battle to get him to do anything after many many, many neighborhood complaints, and city foot dragging. The graffiti has all but taken over the outside walls, the rusting metal railings and bricks piled all over the parking lot. Have I missed anything. I’ll bet the customers at the Eureka Inn are willing to pay big for the scenic views.

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  14. Anonymous 8:37-

    I’m not sure I understand your reasoning. At first glance, I see your points. But then I think about it. You seem to be advocating bailing out a proven slumlord and then chastising commenters who are upset about it. McKenny has brought this upon himself, by accepting the public appointment to the planning committee from Virginia Bass. There are a lot of people out there who would love to be in a position to buy land and then get tax dollars to fix it up and make it presentable to both the left and the right. On top of that, they get to make a profit. You seem to advocate this point of view.

    I guess I just don’t understand. Is there a place that I could meet people who are likeminded to your position (making bucks off of taxpayers with no accountability). Or is it only allowed for the political insiders in this county/country.

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  15. Have ya noticed that the wealthy all say that investment should be taxed less – because the investor is “taking a risk with his capital.”

    That’s the theory but the big fish always get bailed out so where’s the risk?

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  16. In other words for the simple among us, McKenny took a risk, and he is now underwater. That’s too bad. You win some and you lose some, its the capitalist system. Stop whining and fix your business.

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  17. Anonymous (the Green Bat Winged one):

    I don’t know Mr. Mckenny’s motivations. Can you really blame his poor stewardship of the property entirely on the Recession? He owned that property all through the five or so years before the Recession when property values went through the roof and he did nothing with it.

    I also don’t understand Virginia Bass’s appointing a property owner with such a glaring problem to the County Planning Commission. Did her motivation to help pack the commission with developers and like minded blind her to the fact that such a choice spoke volumes on just how crazy this system has become?

    As to the other point you make: Would a solution involving public grants be better than no solution at all? Of course it would. That is not what I was saying.

    What I was saying was it is ironic that when grand dad lets his property slip it’s all on him but when someone wealthy and having a “position” in the community gets into such problems all of a sudden it’s perfectly all right to advocate handing him a check and telling him to “Get to it. Take all the time you need.”

    Another irony is that you agreed (reposted even) with I Don’t Get It’s statement, “The city picks on the little guy, while leaving the fat cats alone.” Don’t you see who’s the “little guy” and who’s the “fat cat”?

    Anonymous Green Bat Winged person: I don’t want to see Mr. Mckenny loose his shirt. I truly don’t. I’d be delighted if he made scads of money off the property. I just think enough is enough and given Mr. Mckenny’s opportunities… he’s had more than a fair chance to fix this.

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  18. watchman,

    Thanks for those details. I can’t argue with the neighbors when they say they’re sick of the blight and want it gone. I assume the building itself will never be rehabbed, it’s too far gone, and wouldn’t really be worth saving even if that was possible. So I’m assuming it needs to be torn down, before it falls down, or burns down, with possibly tragic results for neighbors and/or any squatters unlucky enough to be in the building at the time.

    I don’t know Mr McKenny’s financial circumstances. If he has plenty of money to demolish this thing legally, and he’s just holding off because he’d rather use that money more profitably for some other endeavor, and/or he’d rather wait with the hopes of using money coming in from some kind of redevelopment project in order to do the demolition, I think that’s just wrong of him to subject the community to a dangerous, crumbling eyesore in the meantime. He should be a good neighbor and an ethical businessman, and get the damned permits and demolish the damned thing and at least plant some nice wildflowers while he tries to get a viable redevelopment project going, and/or looks for a buyer for the property.

    On the other hand, if he doesn’t have the funds to demolish the building and clean up the property, and there’s no viable redevelopment project in the works in the near term, then it’s not quite as clear to me what he should do, other than try to find a buyer. So if he really doesn’t have the money to deal with the property responsibly, then I suppose that’s what he should do — he should start actively trying to sell (assuming he isn’t already). But there may not be any enthusiastic buyers out there, even at a fire-sale price. Or maybe there would be, if the price was low enough…but there’s still no guarantee that the new owners would have any greater luck redeveloping the property in this still-weak real estate market.

    I just want to see a good outcome, and I don’t really care which way it goes, whether he has to sell it off, or he manages to hold onto the property and turn it into something useful. Whether he wins or loses is a lot less important to me than whether the community wins or loses in the end. As far as I can tell, so far it’s all been a lose-lose situation for both the community and for Mr. McKenny. I could live with win-lose (the community wins as some other owner succeeds where Mr. McKenny failed, and he loses because he has to sell at a loss…too bad, but that’s what happens when you gamble on real estate and lose). And of course I could live with a win-win scenario (McKenny succeeds in redeveloping the property in a way that’s beneficial to the community, and gets a return on his investment in the process). What Eureka shouldn’t have to live with (especially the neighbors) is the lose-lose situation continuing for years to come.

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  19. I think there must be more than one “green bat anonymous” the one that just commented is working over time to defend McKenny, Oh “green wing one” are you his attorney or PR person?

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  20. “You seem to be advocating bailing out a proven slumlord…making bucks off of taxpayers with no accountability.”

    I’m not advocating either of those things. Not. At. All! I wouldn’t support just giving anyone money with no accountability, especially someone with a poor track record. Just saying I’d rather see a useful senior affordable housing project on that site rather than what’s there now, and since McKenny is the owner of the property and no one else seems to be beating down his door to buy it from him, if he want to try to make the senior affordable housing project happen, using the same kinds of government incentives any other developer would be able to access for that kind of project, and under all the same rules, I’m not going to automatically oppose it just because it’s him — that would amount to cutting off my nose to spite my face.

    So if I gave the impression that I was advocating special treatment for him, a special “Town Downer Bailout,” cash that only he would qualify for — and furthermore that I would support gifting him with this special taxpayer bailout with “no accountability,” then I would like to clear that up right now. I don’t support either of those things. Not. At. All!

    By the way, you know that senior affordable housing building with retail on the first floor, across from the Co-op in Arcata? The one that infill proponents (correctly) point to as a model for what they want to see us do more of. That is government subsidized — does that mean that the developer was unfairly “bailed out?” By the way, do you know who the developer was for that? . Hint: the same developer also did senior housing developments in Fortuna and McKinleyville. Believe it or not, this poster boy for affordable, infill, walkable, eco-groovy “Smart Growth” senior housing — is none other than Dan Johnson of DanCo, a local politically-conservative developer, he of the recent school board plagiarism scandal. If he has the opportunity to do another project like the one in Arcata, should people oppose that because they think he doesn’t “deserve” the government help…even though what he’s getting the help to do would be useful for the community? The public, through it’s elected officials, have created these affordable housing incentives for a reason, so if someone wants make use of them, it doesn’t really make sense to me to accuse them of seeking a “bailout,” if, in fact, they are doing the kind of development that the incentives were created to encourage.

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  21. re:pete

    No, I have never met McKenny, and don’t have any dog in this fight. Just find the situation interesting, and concerning.

    Can’t help but notice you didn’t address any of discussion, other than to launch your attack on me. That is your prerogative, of course.

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  22. “MOLA:42,” Sounds like you and I really don’t disagree on the fundamentals. McKenny needs to get his act together and clean up the property immediately. The city should have leaned harder on him, probably years ago. It’s totally unfair that some old dude with a loose gutter should get leaned on by the city, when meanwhile they weren’t dealing with bigger fish like McKenny. I won’t argue with any of that.

    And, yes, “re:pete” the green bat is for any anonymous comment. For the record, all of the green bat comments on this thread so far are mine, except for 9:25 and 9:27.

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  23. Sorry, I meant to include a link to the Times-Standard article about the Plaza Point mixed-use / senior affordable housing development in Arcata. Here it is:

    http://www.times-standard.com/lifestyle/ci_19757406

    If McKenny was to propose something along those lines, I’d be interested to hear how commenters here would react. Would you (a) support it, as long as he had a solid business plan, and doesn’t get any special government funds or incentives that aren’t available to others, or (b) oppose it, no matter what, as long as McKenny was involved, because if some public funds and/or incentives were used you’d view that as unjustly “bailing out a slumlord?”

    If (b) then what if he was to sell it to someone else, and they had a solid track record and business plan, you’d support it then, right? But now what if McKenny made some money on the sale of the property to the other developer, would that change your mind back the other way again, on the grounds that the project would still amount to an “indirect bailout” to McKenny? In other words, would that really be so different than if he undertook the project himself?

    Again, what I’m getting at is how important is it to you that McKenny lose as opposed to how important is it to you that the community win? I think MOLA:42 has answered that the community winning is what matters most, and I agree, strongly. I also agree that time’s a-wastin’ and if McKenny can’t get his act together, he needs to get out of the way and give someone else a chance.

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  24. If McKenny were actually in financial trouble, he would be joining tens of millions of U.S. families since 2008: FILE BANKRUPTCY AND SUFFER FORECLOSURE.

    Few understand that the tax system rewards multiple property owners by allowing them to write off their losses against other properties that are profitable. The Towndowner is a tax liability sink.

    Taxes, ordinances, accountability, and jail, are for the little people.

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  25. It’s possible to both not be bankrupt, but also not have the financing to move ahead with a project. Don’t know if that’s the case here or not, just saying it’s not necessarily one or the other.

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  26. Anonymous (Purple Bat Wing) 11:21:

    Funny, you are an Anonymous but you are a Purple Bat Wing Anonymous. I guess the system got tired of Green Bat Winged Anonymous’s. Welcome to the show.

    You could very well have explained the motivation (I remember some species of Anonymous asking what that motivation would be) for Mr. Mckenny stalling on fixing up the place. Despite the normal person’s view that it would be crazy for him to stall fixing up the place it could actually be a profit making decision.

    Tax Liability Sink. What a glorious transformation… The Town Downer was a rat hole…. now it’s the American Dream.

    As for all the Green Bat Winged Anonymous’s out there… I can agree with some of the Green Bat Winged Anonymous’s all of the time and I can agree with all of the Green Bat Winged Anonymous’s some of the time but I can’t agree with all of the Green Bat Winged Anonymous’s all the of the time.

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  27. 11:21,

    Good point about the possibility that he’s just using it as a “tax liability sink.” I don’t know if that’s true or not, but if so it could be an answer to something I was wondering aloud about upthread:

    ” I don’t see what he would have to gain by pretending to try to move forward with redeveloping the property, while secretly not intending doing so.”

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  28. “Funny, you are an Anonymous but you are a Purple Bat Wing Anonymous. I guess the system got tired of Green Bat Winged Anonymous’s.”

    The way it works on some blogs is that if you provide an e-mail address (in some cases even a fake one) then you get a unique gravatar. I’m going to try that with this comment, let’s see what happens.

    Your Truly,

    The person responsible for all but a couple of the green-bat anonymous posts.

    P.S. If you agreed with me all of the time, I’d be worried about you 😉

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  29. Hey, it worked. Yay! Okay, I’m the carrot-orange thingie, and I’ll stick with that. For the record, again, I was responsible for all the green-bat anon posts in this thread so far, except for 9:25pm and 9:27pm. Sorry for any confusion caused by not establishing my own gravatar earlier. Wasn’t expecting to get drawn into this conversation to the extent I have in fact now allowed myself to be.

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  30. I agree that 11:21’s point about McKenny using the Town Downer as a “tax liability sink” does offer a plausible motivation for stalling and not being too worried about making any progress on the property. I don’t know if that’s actually the case or not in this instance, and I’m not inclined to help myself to the assumption that it is (11:21 may have more information, or may just be more willing to make that assumption, I don’t know).

    But I certainly think it would be fair to raise this question with McKenny. If his answer is evasive, I will be more willing to make the assumption that this may be what’s going on.

    Anyway, thanks all for the discussion, especially MOLA:42, and thanks everyone for tolerating my long-winded thinking-out-loud. If you read back over all my comments here and it seems to you that some of them are somewhat contradictory, that wouldn’t surprise me — I do have mixed feeling on this. I am aware of both sleazy slumlords and tax dodgers, and also of entrepreneurs who honestly try to make something happen, but find themselves unable to do so but aren’t quick to give up – and I’m trying to suss out which category McKenny really fits into, or perhaps where does he fall along a spectrum between those points. I am honestly trying to figure out what might be a good, and realistic, way forward.

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  31. You got to hand it to the New Orange Anonymous, He managed after the earthquake to invert the conversation from McKenny as derelict slumlord to sympathetic warm and fuzzy developer. that just needs your understanding and a chance at the public funding.
    What about the profits from his huge development off St James place off Harris. Not too far from McKenny Do it Best Hardware

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  32. re:pete 11:57:

    I like to think Orange Carrot Anonymous has used this blog to the best advantage by being open to new information and adjusting his thinking accordingly. There is nothing wrong with that.

    It may surprise some that I myself have been known to change (I prefer “modify”) an opinion when new information is presented. But only on odd numbered Fridays during a full moon.

    Shine On You Crazy Orange Carrot Anonymous!

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  33. Thanks MOLA:42.

    I came to this discussion with only a casual knowledge of the issue, from what I have read in the media. I might not have commented at all, except that the very first comment on this thread, by “virginia 3833” mentioned that there might be a plan in the works to build affordable senior housing on that site. Which, taken at face value, sounded to me like a win for the community. So that was my jumping off point for this conversation.

    I knew was that there was political controversy about this McKenny being appointed to the Planning Commission by Virginia Bass., but I wasn’t sure what to make for it. From what I could gather, McKenny sounded like he had a number of impressive qualifications for the position of Planning Commissioner. As a previous LoCO article had noted:

    “[Bass] pointed out that [McKenny] helped develop the Eureka Community Plan, worked on permit streamlining for the city and served 26 years as an elected member of the Humboldt Community Services District. He also served three terms on Humboldt County’s Local Agency Formation Committee (LAFCo).”

    http://lostcoastoutpost.com/2014/feb/10/owner-downtowner-rotting-corpse-eureka-motel-be-na/

    I also knew, from the same LoCO article, that McKenny owned the “rotting corpse” of the Downtowner, which according to that article, he acquired in 2005, about two years before the financial, real estate and economic meltdown. So I was ready to cut him some slack on not being able to redevelop it, though at the same time I acknowledged that he had done a poor job of maintaining the property. Just how poor, and how dangerous that has been for the neighborhood, I wasn’t really aware, and one of the comments here (watchman, 8:54pm) really drove that point home.

    Hearing more of the details on McKenny’s tenure as owner of the Town Downer helped me understand why people might be highly skeptical of anything McKenny might propose, and disinclined to be supportive, especially if any kind of public funding, or tax incentives, or whatever, might be involved. So given what I’ve read here, I think that skepticism and mistrust is certainly justified.

    I also found Anon 11:21’s point very interesting, as it provided a possible explanation for a situation I was having trouble understanding — the question of what McKenny could possibly stand to gain from neglecting the property. I understood how slumlords make money by renting dilapidated, unsafe properties to desperate, poor tenants, but wasn’t seeing how one could make money on a boarded up building with no tenants, other than maybe in the long run, if the property was redeveloped into something profitable. But if, in the meantime, he’s actively gaining tax advantages by holding the property in a state of neglect, as opposed to he’s just been unable to get financing to do something with the property, yes, that would affect how I view the situation, and how I view McKenny.

    I’m not about to form any final conclusions, but you folks have given me a lot to think about.

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  34. AS far as him waiting for redevelopment money to rehab the property, he shouldn’t hold his breath. Redevelopment money was taken by the state to pay it’s debts. I don’t believe the agency is functioning now. Correct me if I am wrong.

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  35. No, you’re correct, watchman. I just meant “redevelopment” in the broader sense of developing a property that has been developed in the past but has fallen into disrepair / obsolescence / disuse and needs to be “re-developed” into something useful again.

    I don’t know what kind of grant “virginia 3833” was talking about in her comment at the top of this thread. Presumably that’s a question McKenny should be asked, if he’s publicly speaking about having filed a grant application, as “virginia 3833” stated.

    Also, I have speculated in this thread that there might be other financial or regulatory incentives offered to developers of affordable senior housing, but I don’t know that for sure, aside from having read somewhere that the Plaza Point project in Arcata was publicly-incentivized in some way. But possibly that was done with a type of funding or incentive that is no longer available? Perhaps someone more knowledgeable could weigh in on that…

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  36. My assumption that the Towndowner is a tax liability sink is based on my knowledge of how the tax system is designed to work, Mckenny would be a fool not to take advantage of it.

    This is the reason there are always so many empty buildings in Old Town. It’s a Shell and Pea game rigged to allow building owners to write-off vacant properties for a portion of the lost income they had been generating, they can do this for a limited number of years before shifting a valuable “loss” elsewhere. It’s the same reason Walmart will build another store a few miles away from one they’re going to abandon to milk huge tax advantages from the empty store as long as possible.

    Take a closer look at the names of property owners in Old Town, some died generations ago thus freezing property taxes to a pittance. The entire county needs an audit…another reason local Bigs fund political hacks to maintain the status quo. (Latin for the mess we’re in).

    If we were a community that paid attention, we would by taxing these properties for their value/cost to the community as a balance to the unfair advantages they extract at public expense.

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  37. There are two problems.

    The first is Prop 13, it incentivizes people to hold on to their properties and let them sit vacant rather than selling them and returning their use to commerce. In this sense Prop. 13 has turned out to be sand in the gears of commerce.

    The second tax problem is tax loss carryforwards. These loss carryforwards means that a business can suffer a loss in one year, but write that loss off in the future against future profits. These have not been around forever, they were sold during the 30s as a stimulus for business. Now they just serve to minimize taxes. They actually make the business climate worse. Leaving a business building sit vacant is the equivalent of burying your capital in the backyard. It may be legal but it does nothing for the economy.

    Fix prop 13 so it no longer applies to commercial properties and eliminate the accounting gimmick of tax loss carry forwards and you will see fewer empty storefronts.

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  38. Tax loss carry forwards favor big corporate business and harm small business.

    They give a huge advantage to big biz as opposed to small biz. Heres the reason.

    Say your small retail biz has a capitalization of a half million dollars. Maybe you have a bad year and you lose a half million dollars. Oops you are out of business! Of course you still have the “right” to use your loss carry forward, but there won’t be any profits to write them off against because you are OUT OF BUSINESS.

    Contrast that with Mega Corp. They also had a bad year and lost a half million on their store across the street from yours. They are capitalized at a billion dollars, so a half million loss is less than 1 percent of their capital. Next year they will get a tax break. They will be subsidized by YOUR BROKE ASS and if you are nice they will hire you for $8 an hour.

    Do you get this?

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  39. Good points by Anon 9:00 and 9:32, and explained in a clear, easy-to-understand fashion. Thanks!

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