Many of our economic indicators in our city indicate that we currently have a strong economy. Total sales are at an all time high, commercial property values have increased indicating that they can sustain higher rent rates, and unemployment for our city was down to 2.5% in 2018 (highest in the last ten year period was 6.9% in 2010). All the figures and data in the section are supported by the Louisville Comprehensive Annual Financial Report (CAFR) for the year ended December 31, 2018. The figure above graphically shows the tax revenue the city has collected from 2009 to 2018. Sales, property, and use tax have all increased in the period shown and those taxes are each directly proportional to the total value of the source they are collected against. Even with strong sales overall, some businesses and or locations present major opportunities for improvement, namely the long vacant Sam’s Club.
Retail Vacancy and our Tax Base
When retail properties are redeveloped it is imperative that the new development is fiscally positive to the city. The retail spaces are critical for ensuring that high quality city services can be provided as sales and use tax is our largest source of revenue as a city. As residents of Louisville we contribute to the cost of providing services by paying sales taxes, property taxes and fees. However these revenues do not cover the cost of providing the services that our citizens use (parks, transportation, policing and so on). To fill this gap we rely on our commercial tax base and sales taxes from non-residents. In executing our Comprehensive Plan we must ensure we do not erode our tax base by ensuring we do not replace revenue producing commercial designations with deficit producing residential units (not to say that there are not opportunities for residential homes- that is what we have residentially zoned property for).
I support strategic and aggressive outreach to fill the vacancies. There are many obstacles to overcome in attracting people to the vacant spaces including difficult covenants, space size and location, and age of infrastructure. We must work with the property owners to address these issues or commercial infill will not be successful. As a council we also need to reach out to companies and people and let them know what our city has to offer. Filling the vacant space with retail gives residents a greater variety of shopping opportunities and provides the city with sales tax revenue which is needed to address community needs. There are examples in the area and in our city where we have seen successful commercial and office redevelopment without a residential component that have generated acceptable returns for the developers who executed those projects.
We should not abandon our commercial zoning as a reaction to changing retail purchasing habits (the switch to on-line purchase). Commercial development is a long-term process. For example the Colorado Technology Center and the Centennial Valley office park have had slow but steady development for over 40 years. High-density housing as a “quick fix” for the effect of “making something happen” is not a responsible long-term fiscal sustainability strategy. Long term fiscal sustainability will not happen without well thought out planning. We need a shift in our commercial land-use paradigms to address commercial cultural changes not a total replacement which yields either a reduction in services or tax increases to the citizens of the city.